November 2000 Fraser Forum: The "Luck" Thing
"Where people end up in life is pure luck."
I have heard this viewpoint, in various versions, more and more often recently. It is becoming particularly common within the social welfare community as a sort of "trump card" in the debate about income and wealth redistribution.
The logic of this perspective goes, more or less, like this. If where we all end up in life is pure luck, then no one who earns a lot of money really deserves it. They are just lucky. And if they really don’t deserve it, then, presumably, it is easy to justify taking some of it away from them (via taxation) and giving it to others who have been "unlucky." The clear implication of all this is that a system of predominantly free markets is unfair because it permits "luck" to generate significant material inequality. It follows, therefore, that substantial state intervention is needed, both to rectify the unfair distributions produced by free markets, and to reduce the amount of market activity itself.
The problem with this approach is that it takes a germ of truth and turns it into a full-blown infection. No one can deny that luck is part of the human condition. Life is very complicated and filled with thousands of events, influences, and pressures from outside of ourselves. At times, we can feel very lucky or very unlucky. This is particularly true in conjunction with major life events such as marriage, divorce, the loss of a job, a promotion, the birth of a child, or the death of a close friend or family member. However, when we step back and examine where we have ended up and why, in most cases luck is a relatively small factor.
Indeed, it seems that society generally believes luck’s role to be minor. We expect people to act in a civil and responsible fashion. We have laws that proscribe certain types of antisocial behaviour, and we punish people who have been judged to have broken the law. If where we end up is pure luck, then it must follow that we are really not responsible for what we do. We can’t act wilfully, and we can’t do the right thing. We are just lucky or unlucky. We are not in control of our own lives. We are, it seems, just pawns in some cosmic game. But that is not the case. We expect people to behave themselves and punish them if they don’t.
This "luck" thing not only defies the conventional view within all societies about personal responsibility and self control, it also defies the evidence on social dynamics. If luck truly determined where we ended up, then there would be far less income and wealth mobility than we actually see in freer economic systems. If luck ruled, rich people would invariably stay rich and poor, poor. Nothing they did themselves could cause them to change their socio-economic status. Research using longitudinal databases, particularly in the US, reveals, however, that there is substantial mobility within society and that some personal characteristics (such as ambition, honesty, hard work, and loyalty) are strong causal factors related to material success and the absence of those characteristics are linked to poor outcomes. The works of Susan Mayer (What Money Can’t Buy) and Cox and Alm (The Myth of Rich and Poor) are just two recent examples. In other words, personal characteristics that are in our control and can be cultivated are major factors determining where we end up.
Having said that, I think it would be foolish to dismiss luck as a consideration. For some people, luck has had a major influence on their lives. We have examples of both extraordinarily good and extraordinarily bad luck. A huge lottery win, a catastrophic illness, or a massive inheritance all have the potential to permanently change a person’s material position. But, these and similar events are quite rare and affect a very small proportion of the population.
As well, I think most would acknowledge that bad luck contributes to the condition in which poor people find themselves. However, even poor folks have substantial control over their lives. Low-income people can and do make changes for the better every day. They do things that will improve their own and their children’s lives. And, Canadian data show, most of them are successful in moving up the income ranks. To diminish the achievements of those people by attributing their success to "luck" is simply unfair and dishonest. The good things that people do for themselves — not luck — largely determines where they end up. This perspective, I think, is a common one and is consistent with the view of Thomas Jefferson who is purported to have said: "I’m a great believer in luck and I find that the harder I work the more I have of it."
Chris Sarlo teaches economics at Nipissing University in North Bay, ON. He is the author of Poverty in Canada, published by The Fraser Institute.
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