Incompetent, rich people are more likely to get ahead than smart people with no money

[bilby]

You're assuming you can measure everything relevant. You can't.

Then you have no basis for your assumption that it's not pure luck.

Either there's data available to make an assessment either way; Or there's not. You want to have your cake and eat it - you claim to know that it's not about luck, but you deny the existence of the data needed to conclude that, in an attempt to prevent anyone from concluding the opposite.

Are you sure you know how the whole "reason" thing is meant to work?

The 'strategic hypothesis' says that people become wealthy because they take some set of strategic decisions, using their skills, talents, and/or effort, to engineer wealth from a small starting capital. This hypothesis predicts that anyone who has the necessary intelligence and opportunity can learn to become wealthy, by emulating those who already have. If true, we would expect to see self-help books on the subject rapidly converge on the successful strategies, and a clear correlation between the relevant skills (whether those are intelligence, risk-tolerance, hard work, or something else) and success.

You're assuming:

1) That large numbers of people have the requisite ability.

Not at all. Small numbers of people have the ability to excel at sports, but we can nevertheless define what specific traits are beneficial.

If you want to excel at basketball, be tall. At weightlifting, be strong. At being a cricket batsman, be short. We can readily identify the beneficial traits, and identify which are mostly accidents of birth, and which are acquired by effort (and what kind of effort is necessary). Top athletes are rare. But we know what it takes to become one, despite that rarity.

2) That the authors of such books actually know the solution and can communicate it effectively in the context of a book. Since the authors of such books aren't wealthy this condition is almost certainly not true.

If there's a strategy that works, it can be taught. I don't need to be a weightlifter to know what exercises, diet, and training are necessary to become one. And some of the authors of such books ARE wealthy - and if any of them detailed an actually effective strategy, rather than being guides to how to buy lottery tickets, natural selection would have kicked in. Success is highly sought after, and of there was a secret to achieving it, it couldn't stay secret for long. Humans are shit at keeping secrets.

For every Gates and Wozniak, there are thousands of guys who started a small business out of their garage, with a brilliant idea that they believed might be a huge success, and who took risks and put in vast numbers of hours of toil - and who ended up with nothing to show for it except debt and bankruptcy.

Look again at my list. #1 and #2 started business--but note that they were game-changer businesses, not merely additional players in the market.

Look again at the logic - examination of the winners isn't informative. You need to look at both winners and equally qualified losers. Otherwise there's no way to separate luck from strategy.

This observation is consistent with the 'luck hypothesis', and is inconsistent with the 'strategic hypothesis'.

And no amount of study of the winners can logically help to build a body of evidence that might overturn that conclusion. Only a diligent study of the losers can do that - you would need to demonstrate that the most closely similar of the losers share a clear difference in approach that the winners do not share (or vice-versa).

Disagree. The number of spectacular successes is obviously very limited, but that doesn't mean it's luck. Rather, it's a matter of identifying the way to change the game and then doing the best job of actually doing so.

And winning the lottery is a matter of identifying the winning numbers, and then making sure to buy a ticket before the draw.

A very limited number of spectacular sucesses is the hallmark of an environment in which strategy is not decisive.

Luck is by far the most likely explanation for rare spectacular success. Where it isn't, it stands out like a dog's balls. And it's repeatable and teachable.

 

[Bomb#20]

Most billionaires had a good start in life but not great riches. Most of them got there by creating or greatly growing a business. They're still mostly self-made.

Yeah, one person did everything to make the billions.

So who the heck said one person did everything? Do you think a billionaire’s profit margin is 100% and his customers gave him a billion dollars for being charming? His profit margin may be two percent, and his customers gave him fifty billion dollars, because he and his crew gave them stuff they liked more than fifty billion dollars. Maybe they liked it as much as ninety billion dollars. Did the billionaire do everything to make ninety billion dollars worth of stuff? Of course not — nobody said he did. His crew did most of that. And his crew got paid forty-nine billion dollars for doing their part.

So (a) how the heck do you figure the billionaire didn’t make a billion-dollar contribution to getting all that stuff made and delivered? And (b) how the heck do you figure that everybody who disagrees with you about (a) and thinks the billionaire’s contribution to the operation is worth over a billion dollars must automatically be claiming that the billionaire did it all himself? He doesn’t have to make ninety billion dollars’ worth of stuff all by himself to qualify as a self-made billionaire.

 

[Bomb#20]

If you’re more sociable, you’ll probably have more success regardless of how smart you are. An example would be the two Steves of Apple. Woz had much more technical smarts than Jobs. But without Jobs’s social skills, Woz’s creation would have collected dust in a garage.

Agree.

Also risk tolerance is extremely important and always overlooked. Usually more intelligent people have less risk tolerance than people who are not smart. Yet the ability to tolerate risk is a key factor to making oneself wealthy.

Rusk tolerance is necessary, but far from sufficient. You can't win the lottery without buying a ticket; But buying a ticket in the expectation of winning is still dumb.

The key factor - indeed the ONLY factor - in making oneself wealthy is luck.

Yes, obviously. Indeed, tautologically.

Hard work and perseverence can make a poor person into a comfortable person. But wealth - serious wealth, Bill Gates wealth, get interviewed about how you got there wealth - is a lottery.

Comfortable is a lottery. Being born in a country that will allow you to work and persevere your way to a comfortable middle class lifestyle is a lottery. Being born with the genes or into an environment that will cause you to acquire hard work habits and perseverance is a lottery. If you’re impoverished because you’re a lazy slacker, well, it’s bad luck that turned you into a lazy slacker.

Which is why earnings over a million bucks a year should be taxed into oblivion. You didn't earn that, you don't deserve it, and there are plenty of people more deserving and more needy who have a stronger moral right to eat every day than you have a right to a third gold-plated Lear jet.

If that were a valid inference from your premise that serious wealth is a lottery, then it would follow that a comfortable middle class income should also be taxed into oblivion.

So show your work. Demonstrate that a one-hundred-million-dollar payout from Powerball should be taxed into oblivion. We don’t do that. Doing that would be manifestly stupid. So demonstrate that morality requires us to be stupid.

 

[Bomb#20]

2) At least in the past he was very competent at screwing people.

Isnt that what most Marx's would say about every capitalist?

Well, sure; but what most Marxists would say has negligible correlation with what’s true.

 

[lpetrich]

Lots of people have high functioning parents and high functioning kids. The vast majority of them don't get rich.

But few “rich” people had poor functioning parents. It’s almost as if that Mendel guy was right about heredity.

So "rich" is a politically incorrect word, it seems.

That aside, there is plenty of evidence of environment confounding. Some people are indeed self-made with their wealth, but their children are not usually as distinguished as they are. They may be competent enough to avoid squandering their wealth, but that is not the same thing as building that wealth.

I note that Trausti doesn't cite any evidence of adopted children or identical twin children separated at birth.

And the politics of envy continues. Anything to justify taking from others.

So if one objects to being stolen from, that means that one envies the thief?

 

[Rhea]

Yes, Bill also got very lucky too. But luck and ability to handle risk are two separate things. The risk I am talking about is when Bill decided to skip college and go out on his own. Most anyone else would play it safe, stay in college, and work for someone else to basically live an average life.

Wait, did you really just say that “most people would stay in college”? Assuming that most people would get into college?
Isn’t that patently wrong?

 

[Trausti]

I note that Trausti doesn't cite any evidence of adopted children or identical twin children separated at birth.

That adopted children take after their biological parents - not their adoptive parents - and that twins, even when separated, are mostly the same, is pretty much well established. Irrespective of widespread biophobia.

1980 - Study Raises the Estimate of Inherited Intelligence

By comparing intelligence test results of identical and fraternal twins who were brought up separately, investigators estimated how much of the differences in the scores was due to genes and how much was due to environment.

The investigators report that fully 70 percent of the differences in the twins' I.Q. scores were attributable to inherited traits. Previous studies had suggested that about 50 percent of the differences in scores were inherited.

 

[Trausti]

Blank Slatist / Creationist: Family wealth is due to direct transmission of property.

Realty: Nah.

 

[bilby]

I note that Trausti doesn't cite any evidence of adopted children or identical twin children separated at birth.

That adopted children take after their biological parents - not their adoptive parents - and that twins, even when separated, are mostly the same, is pretty much well established. Irrespective of widespread biophobia.

1980 - Study Raises the Estimate of Inherited Intelligence

By comparing intelligence test results of identical and fraternal twins who were brought up separately, investigators estimated how much of the differences in the scores was due to genes and how much was due to environment.

The investigators report that fully 70 percent of the differences in the twins' I.Q. scores were attributable to inherited traits. Previous studies had suggested that about 50 percent of the differences in scores were inherited.

Yeah, 70 is approximately 100.

 

[bilby]

Blank Slatist / Creationist: Family wealth is due to direct transmission of property.

Realty: Nah.

Because the pre-industrial economy of 1830s Georgia is clearly an excellent proxy for the developed world in the twenty first century.

 

[Loren Pechtel]

Then you have no basis for your assumption that it's not pure luck.

Either there's data available to make an assessment either way; Or there's not. You want to have your cake and eat it - you claim to know that it's not about luck, but you deny the existence of the data needed to conclude that, in an attempt to prevent anyone from concluding the opposite.

We can plot the results. A bell curve with one that's multiple standard deviations beyond any other data point. Bell curves strongly suggest random (saying that the success/failure of typical mutual fund stock pickers has a large luck component), radical outliers do not.

You're assuming:

1) That large numbers of people have the requisite ability.

Not at all. Small numbers of people have the ability to excel at sports, but we can nevertheless define what specific traits are beneficial.

If you want to excel at basketball, be tall. At weightlifting, be strong. At being a cricket batsman, be short. We can readily identify the beneficial traits, and identify which are mostly accidents of birth, and which are acquired by effort (and what kind of effort is necessary). Top athletes are rare. But we know what it takes to become one, despite that rarity.

We know some of the traits. Not every last one. We can't measure a prospective sportsman and say whether he will succeed or not.

2) That the authors of such books actually know the solution and can communicate it effectively in the context of a book. Since the authors of such books aren't wealthy this condition is almost certainly not true.

If there's a strategy that works, it can be taught. I don't need to be a weightlifter to know what exercises, diet, and training are necessary to become one. And some of the authors of such books ARE wealthy - and if any of them detailed an actually effective strategy, rather than being guides to how to buy lottery tickets, natural selection would have kicked in. Success is highly sought after, and of there was a secret to achieving it, it couldn't stay secret for long. Humans are shit at keeping secrets.

The strategy must be known to enough people that the authors can figure it out. We know at least part of what is behind Buffet's success (value investing, looking at long term results, not short term), we don't know it all.

Look again at the logic - examination of the winners isn't informative. You need to look at both winners and equally qualified losers. Otherwise there's no way to separate luck from strategy.

We have no way to identify the losers to compare. You're trying to solve this as if you have perfect data, while in reality our data is shit.

Disagree. The number of spectacular successes is obviously very limited, but that doesn't mean it's luck. Rather, it's a matter of identifying the way to change the game and then doing the best job of actually doing so.

And winning the lottery is a matter of identifying the winning numbers, and then making sure to buy a ticket before the draw.

Has any major lottery winner claimed a strategy for identifying the winning numbers? No, they just pick numbers. The people I'm referring to identified a way to change the game and set out to do so.

A very limited number of spectacular sucesses is the hallmark of an environment in which strategy is not decisive.

Luck is by far the most likely explanation for rare spectacular success. Where it isn't, it stands out like a dog's balls. And it's repeatable and teachable.

In other words, it's luck who wins each race at the Olympics. A huge number of people try (I'm looking at the number who are seeking gold, even if they don't make the teams at all), very few win. We can't identify what makes person A a tenth of a second faster than B, but A gets the gold and the promotional contracts, B gets silver and not much else.

Success at game-changer things is like this--there usually is only one winner but what sets the winner apart from the others can be tiny differences.

 

[bilby]

Again, you present a series of points, some of which claim insufficient data exists to make any conclusion, and some of which claim sufficient data to show that you are correct. That's just intellectual dishonesty.

And the claim that no major lottery winner has claimed a strategy is utter nonsense. Loads have done exactly that - but their claimed strategies are stuff we know is ineffective (astrology or prayer, for example). We know these are not effective strategies, because they lack repeatability - which is also how we know that wealth acquisition strategies don't work.

But if course I recognise that you won't accept the facts that contradict your faith.

 

[Loren Pechtel]

Blank Slatist / Creationist: Family wealth is due to direct transmission of property.

Realty: Nah.

Surprise factor: zero.

I have yet to hear of a leveling event like this that wasn't soon erased by human nature.

(Conditions: It must be non-selective {thus the Israeli Kibbutzim do not qualify--but note that after only two generations they were back to an 80/20 distribution anyway} and involve resources, not the population {thus things like the Khmer Rouge genocides do not count.})

 

[Trausti]

Blank Slatist / Creationist: Family wealth is due to direct transmission of property.

Realty: Nah.

Because the pre-industrial economy of 1830s Georgia is clearly an excellent proxy for the developed world in the twenty first century.

 

[Canard DuJour]

Blank Slatist / Creationist: Family wealth is due to direct transmission of property.

Realty: Nah.

Because the pre-industrial economy of 1830s Georgia is clearly an excellent proxy for the developed world in the twenty first century.

and...?

What or whom is this supposed to address? If some 'blank slaters' actually show up, you'll have wasted your best material.

Of course there are innate differences in ability and these are often heritable. The huge increases in inequality we've seen over barely two generations cannot possibly be down to that.

 

[Trausti]

and...?

What or whom is this supposed to address? If some 'blank slaters' actually show up, you'll have wasted your best material.

Of course there are innate differences in ability and these are often heritable. The huge increases in inequality we've seen over barely two generations cannot possibly be down to that.

Ah, yeah it can.

 

[Canard DuJour]

and...?

What or whom is this supposed to address? If some 'blank slaters' actually show up, you'll have wasted your best material.

Of course there are innate differences in ability and these are often heritable. The huge increases in inequality we've seen over barely two generations cannot possibly be down to that.

Ah, yeah it can.

Oh, really? Do tell...

 

[Trausti]

Ah, yeah it can.

Oh, really? Do tell...

Increasing the difference between high income and low income is due to mental task verses manual tasks. The well paid manual jobs are fading away.

 

[Fentoine Lum]

Ah, yeah it can.

Oh, really? Do tell...

Increasing the difference between high income and low income is due to mental task verses manual tasks. The well paid manual jobs are fading away.

That's where america's expansive for profit incarceration system, its private for profit detention center concentration camps and militarized police come in to play. The power structure knows full well what's coming. That's also why americans are under constant corporate state surveillance.

 

[Canard DuJour]

Ah, yeah it can.

Oh, really? Do tell...

Increasing the difference between high income and low income is due to mental task verses manual tasks. The well paid manual jobs are fading away.

and..? That'd be the misfortune of the losers, not the talent or diligence of the winners. It'd also mean a corresponding good luck component in the previous distribution. Nor does it explain the changed distribution, i.e. nearly all gains having gone to a tiny fraction of society. The distribution and variance of innate talent cannot possibly have changed so dramatically in barely two genertions. When some external factor e.g. globalisation changes the distribution of wealth for the same distribution of innate talent, we have a word for it: luck.