Crippling poverty, a skill issue?

Óscar Martín Koskimies

It is clear that mother nature favored the Gaussian distribution when making us, practically all our possible variations follow this distribution, from physical aspects such as height or weight, as well as intelligence as measurable by IQ, though not perfect still generally representative. As we are told in the West that we live in a meritocratic society, we might be mistaken to think that this too would follow a Gaussian distribution, instead, it follows the Pareto principle, an 80:20 ratio of 80% of the world wealth being owned by 20% of the population. In recent years these numbers have become even more extreme, 8 individuals hold the same wealth as the bottom half of the population, 3.6 billion people.

We weren’t created equal, but nowhere can we naturally find these disparities within the human population, some people might be born smarter than the rest, above the mean IQ of 100, but no one has an IQ of 1,000 or 10,000, some might work harder than the rest, but no one works a billion times more than anyone else.

Still, we adopt meritocracy as our basis for whom we give fame, honor, and admiration. We judge the individual talent of a person a priori, we look at who is most successful and make them our idols and look up to them as role models to follow. Governments give grants to the most “successful” companies and save “successful” banks from closing down. And of course, if talent and hard work lead to riches, those who lack riches must lack work and talent.

In their recent work “Talent vs Luck: the Role of Randomness in Success and Failure”, Alessandro Pluchino, Alessio Emanuele Biondo, and Andrea Rapisarda decided to look into what factors might be the most indicative of success and to do so created an agent-based model, which they called the “Talent versus Luck” (TvL) model, in which they represent individuals career evolution throughout 40 years, giving each a normally distributed “Talent” number from 0 to 1 meant to represent the amalgamation of intelligence, social skill, hard work, smartness, determination, risk-taking, etc. They then inserted these individuals with the same initial wealth into a virtual environment in which they would encounter lucky events (in green) that would double their wealth if they had the necessary Talent (Talent number being higher than a randomly generated number from 0 to 10), as well as unlucky events (in red) which would halve their wealth.

With the first run of 1000 individuals they already got results indicative of what was to come. The wealth distribution with the first run already perfectly followed the Pareto principle, the 20 most successful individuals held 44% of the total capital. The individual who accumulated the most wealth even had a lower Talent value than the poorest individual, 0.61 to 0.74.

When graphing the capital earned over the individual talent only a slight tendency toward talent can be seen

While if we look at the amount of lucky and unlucky events experienced by each a clearer correlation can be seen:

And looking individually at the wealthiest and poorest individuals:

After running the simulation 100 times, resulting in 100,000 individuals simulated, the individual with the most capital gained of them all had a talent score of exactly 0.60, their resulting success was caused by a string of lucky events in their work life which led to multiplicative growth. If we looked at how this individual would be seen in our world, because of their great success they would be admired by all for their talent even though we know that it was mainly a result of taking advantage of the lucky events they encountered.

While with this data one might start feeling hungry for the rich, we shouldn’t be so eager to reach for the pitchfork, the narcissism of the rich is caused by the same meritocratic view that causes people to call the disenfranchised “lazy bums”. We are victims of the same system, the rich became who they are because everyone around them called them geniuses for their success. We all should broaden our perspective on what leads to wealth or lack of wealth. Those with great wealth should feel grateful for the opportunities presented to them, and be more empathetic to others who might have been as talented and hard-working as them but weren’t lucky enough to be presented with the same opportunities they were. And if we are to make a more equally distributed world we should also understand that had we encountered one lucky event after another, we might also be mistakenly looking down on others. We are all much closer to each other than our wealth would suggest.

  1. Pluchino, A., Biondo, A. E., & Rapisarda, A. (2018b). TALENT VERSUS LUCK: THE ROLE OF RANDOMNESS IN SUCCESS AND FAILURE. Advances in Complex Systems21(03n04), 1850014.

Leave a Reply

Your email address will not be published. Required fields are marked *