One of the questions that drives a perennial wedge between liberal and conservative thinkers is the role of hard work versus luck in an individual’s success. Conservatives tend to celebrate financial success as a fairly reliable consequence of talent and exertion. Liberals, on the other hand, remind us that even talented, hard-working folks sometimes suffer from hardships through no fault of their own.
Moreover, conservatives often worry that encouraging people to view life as a game of chance could inadvertently endorse a lifestyle where individuals sit back passively and just hope for the best. Liberals, in contrast, are concerned that people who believe they deserve all the credit for their success will tend to be less charitable to the poor.
Since both of these view have implications for public policy, it behooves us to better understand how important luck actually is. Up to now, this has been a tricky question to answer. But recent research suggests that chance events may have a larger impact on market outcomes than we previously acknowledged.
According to sociologists Duncan Watts and Matthew Sagalnik, market success does depend on a product’s quality, but ultimately that link is extremely capricious and uncertain. The best contestant in a product category sometimes fails, which the worst at times will win. And for the vast majority of contestants in the mid-range, success is largely a matter of chance. These dynamics are explored in detail in the wonderful book “Everything Is Obvious* (*Once You Know the Answer).”
To conduct their research, the sociologist invited subjects to an experimental web site known as “Music Lab,” which features 48 recordings by obscure indie bands. In the control version of the experiment, individuals could download any songs for free provided that they rank the song’s quality after listening.
There was extraordinary variability in the popularity rating across the eight groups, as well as the fates of songs with a given objective rating. The song “Lockdown,” by the band 52 Metro, is a case in point. Ranked 26th out of 48 in the objective ratings, it finished at No. 1 in one of the eight groups, but at No. 40 in another.
The most intriguing finding was that if a handful of early listeners disliked a song, that generally led to its doom. However, if a couple of early listeners liked that same song, it often went on to succeed.
We all know that it helps to be hard-working and intelligent, and that if you are raised with those characteristics, you were lucky, just as you would be lucky to grow up in the U.S. as opposed to Somalia. Yet this recent sociological research helps clarify why so many individuals who have those qualities never quite find success in the marketplace. Random factors in the information flows can further success, and these are often the most important factors of all.
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