An information screen displays information regarding the FTSE 100 at the London Stock Exchange. "" ©Yui Mok/PA Wire/Press Association Images

Are you successful—or just lucky?

A new book sets out the dangers of the "winner takes all" society
April 20, 2016

An information screen at the London Stock Exchange displays information regarding the FTSE 100. "The average salary for a FTSE 100 CEO is over 180 times the salary of the average UK worker" ©Yui Mok/PA Wire/Press Association Images

Read more from this issue: Who Guarded the Guardian? I did

Are the most successful people in society the best, or just the luckiest? How important is a decent start in life? How much talent is under-utilised because some individuals did not get the lucky break at the crucial time? In his Nicomachean Ethics, Aristotle discusses his concept of “eudaimonia,” probably best translated as “human flourishing,” as what constitutes the highest good for human beings. It is useful in framing a discussion of what constitutes professional success—each of us performing to as high a standard, at as high a level as our skills and efforts can muster. How much is our journey towards that ideal stymied by luck beyond our control?

Robert H Frank’s new book, Success and Luck: Good Fortune and the Myth of Meritocracy (Princeton University Press) attempts to answer this central question—are those who attain the Olympian heights of professional success cleverer, harder working, and with better skills than the rest of us? Frank’s answer is no and he makes three supporting arguments. First, the influence of chance events and environmental factors has a huge effect on people’s lives, irrespective of their virtues and flaws. Secondly, success often results from positive feedback loops that amplify tiny initial variations into enormous differences. For example, the effects of getting into a top university seem to compound over time, and this manifests itself in significantly higher lifetime earnings for those who attend, say Oxford or Cambridge, rather than other universities, despite small differences in A-Level scores for those students. Frank’s third, and most interesting argument, however, is that the globalised 21st century “winner takes all” economy has made chance events in life more significant, greatly magnifying the gaps between winners and losers.

Frank makes his points persuasively, but he constantly uses extreme examples (such as the unlikely fame of the Mona Lisa, or the rise of Microsoft) to make points that should only be made in general terms. The point cannot be whether the very best (even if that could be identified) person in the company always ends up as CEO, but whether, at the very least, the most capable and hard-working are able to progress to a level at which they are flourishing to their true potential. Frank concedes that almost all those who reach the top in any field are highly capable, but not necessarily more capable than lots of other people who missed out. Isn’t this obvious? There is never enough room at the “top” for everyone of similarly high competence; timing, personality, and ultimate ambition all play critical parts.

However, technology and the modern globalised economy have changed everything. They create larger markets that can be reached more quickly, so a very small initial advantage ends up resulting in a much greater profit than in the past. Superstars dominate markets like never before. In 2015, the 10 best-paid Premiership footballers earnt an average of £218,000 per week. The average weekly wage for the Championship (the league immediately below the Premiership) was just under £5,000. The average salary for a FTSE 100 CEO is £4.96m, over 180 times the salary of the average UK worker, while in 1998 CEOs earnt only 47 times the average worker’s salary. In business, consider the sheer dominance of Google, Twitter, Facebook and the like. They do not have competitors. Technology has enabled them to completely dominate a global market for their goods. When you can use Facebook anywhere in the world, why ever use another product that is even slightly inferior? These firms generate revenues on a colossal scale.

Therefore, should society openly acknowledge this “winner takes all” effect? Should we try and make the lucky few contribute much more to the common weal in active acknowledgement of their sheer fortune? By doing so, the argument runs, tax revenues can (at least theoretically) help level the playing field and provide more children with better foundations for future success.

The problem with this idea is that a necessary, if not sufficient, condition for success is the belief that luck will not play a decisive role in your career. You perform better in an exam or job interview when you prepare thoroughly beforehand. You get promoted faster when you ignore external factors and rely on what you can control in your daily work and attitude. As a black person whose father and grandfather came to this country from Nigeria, I was taught that if you don’t achieve something, it is because you didn’t work hard enough. Get up and try again. This is not “fair” but it is psychologically useful for each of us. By society openly promoting the idea that the most successful people are in post to a large degree because of chance, we would risk encouraging social envy and division, diminishing achievement, and undermining one of the main driving forces behind our young, ambitious, entrepreneurial people. Endeavour, not luck, will play the decisive role in all our futures.