Tuesday, January 25, 2011

[vzdmrsol] Wealth and luck in this modern age

Is financial success in life primarily due to hard work or to luck?  Is poverty due to laziness or to factors beyond your control?

Measure this.  This is perhaps the most important question in all of welfare economics, because if the answer is "luck", it is a very strong argument for wealth redistribution.

When America was a primarily agricultural economy or a manufacturing economy, one could achieve middle class by working with one's hands ("manufacture").  Nowadays, technology, combines and robots, have replaced manual labor so it seems a lot more difficult to achieve wealth in a straightforward way by hard work.  Luck seems to play a greater role, and the very few lucky earn great wealth.  But this is speculation: measure it.

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