Sunday, September 10, 2023

They Call it "Luck" - Vox Popoli

 But it really doesn’t have much to do with chance or anything random. A team of Italian scientists tests the connection between the distribution of various attributes and the distribution of wealth.

What factors, then, determine how individuals become wealthy? Could it be that chance plays a bigger role than anybody expected? And how can these factors, whatever they are, be exploited to make the world a better and fairer place?

Today we get an answer thanks to the work of Alessandro Pluchino at the University of Catania in Italy and a couple of colleagues. These guys have created a computer model of human talent and the way people use it to exploit opportunities in life. The model allows the team to study the role of chance in this process.

The results are something of an eye-opener. Their simulations accurately reproduce the wealth distribution in the real world. But the wealthiest individuals are not the most talented (although they must have a certain level of talent). They are the luckiest. And this has significant implications for the way societies can optimize the returns they get for investments in everything from business to science.

Pluchino and co’s model is straightforward. It consists of N people, each with a certain level of talent (skill, intelligence, ability, and so on). This talent is distributed normally around some average level, with some standard deviation. So some people are more talented than average and some are less so, but nobody is orders of magnitude more talented than anybody else.

This is the same kind of distribution seen for various human skills, or even characteristics like height or weight. Some people are taller or smaller than average, but nobody is the size of an ant or a skyscraper. Indeed, we are all quite similar.

The computer model charts each individual through a working life of 40 years. During this time, the individuals experience lucky events that they can exploit to increase their wealth if they are talented enough. However, they also experience unlucky events that reduce their wealth. These events occur at random.

At the end of the 40 years, Pluchino and co rank the individuals by wealth and study the characteristics of the most successful. They also calculate the wealth distribution. They then repeat the simulation many times to check the robustness of the outcome.

When the team rank individuals by wealth, the distribution is exactly like that seen in real-world societies. “The ‘80-20’ rule is respected, since 80 percent of the population owns only 20 percent of the total capital, while the remaining 20 percent owns 80 percent of the same capital,” report Pluchino and co.

That may not be surprising or unfair if the wealthiest 20 percent turn out to be the most talented. But that isn’t what happens. The wealthiest individuals are typically not the most talented or anywhere near it. “The maximum success never coincides with the maximum talent, and vice-versa,” say the researchers.

So if not talent, what other factor causes this skewed wealth distribution? “Our simulation clearly shows that such a factor is just pure luck,” say Pluchino and co.

First of all, this science, such as it is, should suffice to end, once and for all, the absurd insistence by American Jews that their statistically inordinate amount of wealth and power amassed in a matter of decades has anything to do with their imaginary average 115 IQ.

However, “just pure luck” is not a variable. While this method is sufficient to demonstrate the lack of correlation between talent, IQ, hard work, and other specific variables with wealth, to simply assign the causation to random chance is incorrect. The much more reasonable answer is that the team failed to test the variable that is most strongly correlated with wealth, which is positive connection to the central societal distributors of wealth.

There is no way such a model could account for ticket-taking, and yet we repeatedly observe that mediocre ticket-takers succeed while much more talented independents “experience unlucky events”. Is there one single person in the world who believes that Ben Shapiro is better behind the microphone than Milo Yiannopoulos or Owen Benjamin, and that he is also a more talented writer than Bruce Bethke, Chuck Dixon, and me?

Color me dubious.

Is there anyone who genuinely believes CNN can’t do better than hire a CEO and Chairman who was fired as the Director-General of the BBC for covering up the Jimmy Saville scandal?

I am of the color dubious.

It will be interesting to see what happens when these researchers discover that what they call “serendipity” fails to produce the results they are expecting, and when “serendipity” suddenly begins to cause them to experience unlucky events.

A useful term, that “serendipity”.