Estimated reading time: 20 minute(s)
Robert H. Frank, Success and Luck. Good Fortune and the Myth of Meritocracy. Princeton University Press, 2016
This morning I came across the comments section of an Italian online newspaper, under an article discussing Italy’s system of taxation and criteria of fiscal progression. One comment has struck me, one in which the author argued that he feels that a high rate of income tax is profoundly unjust.
As evidence, he mentioned his own experience: last year he spent 20 weeks travelling abroad for his company and worked hard, and at the end of the year he received a substantial (though unexpected) bonus. He ended up in a higher tax bracket and almost half of his bonus went to the tax office, despite his hard work and, allegedly, his good professional results. I suspect his disappointment is not unique.
At least in my circle of friends and acquaintances, complaints concerning taxation and the net income they could earn if this or that tax were not that high or if it were removed at all are not uncommon. However, nobody or very few of them actually follow a consistent and comprehensive libertarian argument in favour of a small, very small government. They just maintain that government should be more efficient, taxes are too high, and even if they are not, they should be a burden for someone else. They genuinely think, and with good reasons, they deserve that money because they strive hard every day, they have gone through years of academic studies or professional training, and then, at the end of the day, some of that money goes into the pockets of people whose merits are not as praiseworthy as theirs.
The appeal of the idea of meritocracy has been very high for decades, and it still is in many areas of our societies: I work hard, I succeed, I am rewarded for my success, I keep working hard and so on. We may argue whether compensation (financial or not) or retribution must come because of the intrinsic value of the actions that precede them and show the merit of a person (I behave well, therefore I deserve to be rewarded), or if optimal behaviour in society is fostered by potential future awards, which work as an incentive (look, there is an attractive prize, be it money, social status, some form of happiness etc., therefore I am inclined to act in a deserving way). Robert H. Frank, an economist at Cornell University, points out in his Success and Luck. Good Fortune and the Myth of Meritocracy, that our idea of merit is an evolutionary tool leading humans to achieve excellence, despite evidence showing that our achievements are actually brought about by a number of circumstances uninfluenced by us.
For instance, our economic, social, cultural and family background matters. Being raised in a wealthy family in some opulent Western city or in worse financial conditions in a rural village makes a huge difference, when it comes to what one can achieve in life, say, professionally speaking. Access to good schools, highly qualified teachers, top universities give some a substantial push in their careers and in their intellectual development. You might be incredibly smart, but your parents may unexpectedly die, then you should start taking care of your brothers and sisters, reducing your free time because you have to go to that student job that makes both ends meet – et voilà, you accumulate an educational disadvantage. Many other factors bear influence on one’s personal, educational and intellectual growth: a youth spent travelling abroad, or in a house with a well-equipped library, that extra class teaching you a foreign language, etc., constitute a much more favourable environment than a tiny house in some poor suburbs, with the TV always on and no one able to provide you with proper guidance or support. In my view, nobody is a priori guilty of being rich and well-educated. On the other side, there is no much merit either.
Despite this, you make it, and one day you get a job interview: one big company has an open position, you are the perfect candidate and that is your dream job. You have planned to reach the station, read again some notes on the train, and brilliantly answer all the questions – you cannot fail. However, that morning, a car accident happens, you are trapped in a traffic jam and miss your train, go to the interview by car without time for your personal notes. You arrive late and out of breath, one of the interviewers is a bit annoyed, and the job goes to the guy who is a bit slightly less qualified than you, but lives close and has been able to impress his or her future managers. Well-maintained roads may have avoided that traffic jam.
There are many things that may affect your career: health, geography, family, weather, etc. Interestingly, however – and, in my opinion, this is the most relevant part of Frank’s book – our mind does not intuitively acknowledge the existence of several sets of circumstances affecting our success. We tend to focus on our actions – good or deserving actions – while dismissing other people’s merits, or external, objective factors. In a competition where many candidates are almost at the same level, the one just below many others might prevail for a number of different and only slightly relevant reasons, just because he is luckier (it is a bit like football: think about the 2004 Champions League final, Porto-Monaco). Nevertheless, the idea that we deserve what we get is a strong evolutionary tool that pushes humanity towards improvement. I suppose I can say that idleness and laziness would be the dominant characters of our societies if we all thought that our actions bear no weight on our personal achievements. So, there is a contrast: the powerful incentive given by our strong, perhaps innate and almost unilateral idea of merit on one side, and the fact that many other things have, in fact, an influence on our success. Moreover, it must be noted, in winner-take-all markets, tiny luck can translate into a huge advantage.
Robert H. Frank, as I said above, is an economist, and he concludes his book by maintaining that the change of attitude towards one’s own luck and the willingness to acknowledge the contribution of others would foster a collaborative culture without harming one’s self-interest (in my naive words: what is the point of building a giant skyscraper made of gold and diamonds in the middle of a city composed of ruins and hovels?). He argues in favour of a tax reform taking into account the fact that people start their life at a different level and that their success depends on other fellow citizens: a progressive consumption tax would reduce the demand for items that people do not actually need – in other words, symbols of socioeconomic status such as huge mansions, expensive cars etc. The case for such type of tax is, in Frank’s word, that «it provides powerful incentives to shift the composition of what we produce in ways that provide greater value than the current mix. The current mix falls short not because consumers don’t know what’s best, but rather because individual incentives are at odds with what’s best collectively» (p. 169). It would affect the concept of luxury and our myth of personal success, and reallocate government and society’s resources more efficiently, solving thus the conflict between morality and self-interest (or the interest of our children).
More generally, I think, the distribution of luck and merit is extremely variegated and, perhaps, these two factors cannot be easily separated. I am not a fan of taxes. I must say, however, that Frank’s argument is strong and that it should lead to reconsider the relevance of cooperation and competition, and to acknowledge that, more often than we think, we do not build our success just by ourselves.