The truth is that, yes, there is luck involved but a lot of hard work, too. It is a rich spectrum.

Lucky is buying a winning lotto ticket. Luckier still is finding one on the street.

The same is true for life.

Someone works hard in school, gets very good at mathematics and finance, and takes the money from his father's successful life in the restaurant business to start a HFT firm just at the right time to take advantage of inefficiencies in the market while also having access to previously unavailable technological tools to put his ideas to work. He makes a billion dollars.

There's a lot of luck there. But there's also a lot of hard work. Someone sitting at home watching Simpsons reruns is not going to get there.

We shouldn't be so hostile to success but we should also recognize the places where luck can be mitigated and work to do that.

In the example above, the person had a fairly wealthy father. That helped but how can we make that less necessary for the next talented hard working individual that comes along? He got a good education partly because his family could pay for it. Again, how can we make the luck of birth less of a factor? He was able to develop his talent because his mother was able to keep an eye on him and make sure he had a stimulating childhood. Same issue.

We can work to level the playing field and make the rules fairer without tearing down the champions operating under legacy rules. We can acknowledge luck and work to put people in a position to be more lucky. People can learn from the success of others without waving away their hard earned accomplishments by chalking it up to mere luck. Luck is a description of circumstance not the circumstance itself.

Lots of people think first that success and wealth are zero sum games. And second, that we have to decide between extensive social safety nets and a dynamic economy.

Just the opposite, of course.

About the second: the trick to get over the apparent trade-off between welfare state and dynamic economy is to realize that we don't have to tax labour nor capital to provide. Taxing land values works just fine.

More discussion on Georgism here: https://news.ycombinator.com/item?id=10442929

Also https://news.ycombinator.com/item?id=11158398

In general, most real world policies are far from the kind of efficiency frontier where trade-offs between growth and safety net have to be made. Eg the US could replace the subsidies for employer provided health care (with eg a budget neutral tax credit for everyone or more radically a budget neutral slim UB) and improve both efficiency and safety nets.

But, of course, policy is seldom driven by efficiency frontiers amongst its ostensible goals. Politics is harder and more complicated.

Though know I do wonder if a general programme to simplify taxes and close loopholes would have a better chance of passing step-by-step if every such bill came with a budget neutral per-head tax credit. The sound-bite "Senator Smith proposes to give YOU an extra $100 a year by closing obscure loophole exploited by a few corporations!" would certainly do well with the general public?

You can go on from there, and say "Most wealth is appropriated from others, not made." Or "The American dream is a myth, just like the London investment banker’s fantasy. Those who make money are often not very talented at all. They were just lucky at the right points in their lives." That is, the claim is not just that luck plays a role, but that luck plays the dominant role. That's a different claim.

And where it goes from there is often toxic and hostile (whether or not this particular article crossed the line). It usually goes to "So give us our share of it, because you don't deserve it, because you're not actually successful, just lucky."

Flatly attributing to luck is foolish.

Tearing down the wealthy because they happened to be lucky in some way is hostile.

Statements like 'Most wealth is appropriated from others, not made.' are hostile and toxic.

Not just toxic but toxic along several axes.

First, it obfuscates the real problems. The problem isn't inequality of income or assets -- it is when that inequality leads to monopolistic situations for the have's or desperation for the have nots. This is a much easier problem to solve than forced equality thus making a surmountable problem seem much more intractable than it is.

Second, it unfairly vilifies an entire group of people. For the most part, in functioning societies where wealth is generated through voluntary exchanges of value, the wealthy are, generally speaking, doing a ton of good in the world. If we discourage people from taking that path by vilifying it, we are doing much more harm than good.

And finally, it allows people to feel good about doing little. If the wealthy are only wealthy because of luck, well, not generating wealth is as good as creating value for other people and generating wealth, right? Wrong.

Luck is a factor in wealth generation, no doubt about it, but luck is a secondary characteristic. Focusing on it, especially while discounting all of the other factors of financial success, is a mistake that hurts everyone.

How? If someone wins the lottery, obviously it isn't vilifying them to say that it was predominantly luck. If someone by chance invests in a mining company that the very next day discovers a rich deposit in a mine though played out, is it vilifying the investor to praise their luck? The author believes that most great wealth is attributable to luck. You can argue that this is not true. But if it is true, it's certainly not vilifying anyone to make the suggestion.

And finally, it allows people to feel good about doing little.

No, it allows people to feel good about not being rich. It also makes them less likely to blindly worship the wealthy. Human beings are, on the whole, naturally productive. They want to contribute, and feel needed. It's human nature. It's not like everyone will suddenly sit on their hands if we were to find out that becoming rich is mostly luck. Not getting cancer is mostly luck too, but that doesn't mean people don't take prudent measures to reduce their risk.

(Rich people tend to own more land.)

Please bear in mind that I already totally agree that _nominal_ GDP can be controlled by central banks independent of taxes and other real supply-side influences. Also, when the tax take is well-spend the absolute amount of taxes doesn't hinder economic growth---it's rather their effect on the margins on incentives or deadweight loss.

Common sense suggests that if there were truly unambiguous evidence that high marginal tax rates truly harm the economy significantly, the left and the right would be united in championing lower taxes. This is not climate change; there is no broad scientific consensus being resisted by a handful of special interests. There is genuine confusion in the field on this issue, and the absence of a clear answer itself suggests that the effects are minor if they exist at all.

My 'bayesian' prior is that marginal tax rates should matter much more than total tax take (especially if the total take is well spent); and that micro-economic considerations suggest prima facie that blunting the incentives to produce less (income) more should lead to less production (of income). (That's the whole point eg behind a carbon tax.)

But I'd be interested in what kind of material would be able to overcome that prior. (Intellectually, I find the Georgism appealing (https://en.wikipedia.org/wiki/Geolibertarianism). In practice, growing up in Central Europe, I've seen that social democracy works OK, even if not great. Singapore seems to be doing lots of things right. But of course, it might be hard to say exactly which parts of the mix are salient.)

After first very brief skimming: the paper on 'ntanet' treats a cut of marginal tax rates by 5% as major. Moving to LVT as single tax would cut all the marginal tax on labour and capital---quite a bit outside their studied parameters.

Another thing that I'll keep in mind when studying the material is that advertised marginal tax rates are often not the real marginal tax rates: people shift their behaviour to eg in the US take extra compensation in the form of lower taxed health-insurance than more cash in hand. (And rich people who can afford lawyers have even more scope. See Buffets lament that he's paying less tax on his income than his cleaner.)

Sorry for the rambling.

Happy to continue discussion via email, as we might be reaching HN's soft limit on thread-depth soon.

Let me play devil's advocate for a moment. Why do we believe this? I suggest that it's because we see examples of people who worked hard and got rich. But what if the truth is that most people work relatively hard---ie, keep busy at something. What if the pool of truly lazy people is actually rather small, which would make the pool of lazy, lucky people even smaller? Then it's entirely possible that success is all down to luck, but it would seem to us that most of the lucky people were also hard-working. But we would be wrong in associating the hard work with the success.

I firmly believe that hard work and applied intelligence is a key factor in making a decent living---doing a bit better than your neighbor, say. But getting rich, to the point where you're making 10x, 100x, 1000x the average, requires some extraordinary intervention somewhere along the line. I'm not so sure there is a strong correlation between the two phenomena.

My pool cleaner, like most of us, has a finite lifespan. While it's certainly theoretically possible that he could have been a hedge fund trader for Goldman-Sachs, I think we can both agree that to accomplish that would've required a fair amount of luck somewhere along the way. He might, by grit and discipline and sacrifice, have managed to become a lawyer, and make more than he is making as a pool cleaner. But to become independently wealthy by age 30, he also would've had to be very, very lucky.

Looked at in this light, only a small percentage of the population has any chance at tremendous success.

Not only that, but only a small percentage of the population has ready access to the positions that offer the financial leverage necessary for that kind of success.

A few years ago I got on an excellent, high-paying contract. Had the contract lasted a few more years, I probably could have retired early. But neither the start of the contract, nor its end, were entirely (or even mostly) in my control. And while my work history was certainly a factor in getting the contract (though definitely not the only factor), it did nothing to make the contract last any longer.

Another important point is that one year ago I had US50k (but in brazilian reais) in debt because of a failed startup and a lot of difficult getting back to the work force. It was really hard to bootstrap myself out of that situation.

Luck is what happens when preparation meets opportunity - Seneca

Getting rich most likely has to do more with grit than with either luck or talent.

It's hard for us goyim to keep up with those genetic advantages in brain power. (Though sega01 was probably suggesting something like a secret cabal keeping down everyone else..)