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Talent, luck and success: simulating meritocracy and inequality with stochasticity


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2018 Mar 19, 10:42am   1,750 views  2 comments

by Patrick   ➕follow (55)   💰tip   ignore  

https://medium.com/@hongsupshin/talent-luck-and-success-simulating-meritocracy-and-inequality-with-stochasticity-501e0c1b4969

Stochasticity disrupts meritocracy
If lucky events can bring large amounts of profit and unlucky events can bring huge losses to individuals, due to the stochastic nature of their lives, this will inevitably disrupt meritocracy. Even without other socioeconomic situations that can aggravate this phenomenon, it appears that people with average talent often do better than the more talented simply because there are many people of average talent and a few will be lucky.

The steepness of the talent-success slope is related to fairness and inequality
In a meritocratic society, there is positive correlation between talent and success. But how steep should this relationship be? If the talent-success slope is very steep (i.e., a small talent difference causes a large capital gap), you might end up having a wide distribution of wealth (severe economic inequality). On the other hand, if the slope is quite flat (i.e., a big talent difference makes little difference in capital), the society has weak meritocracy, which may disincentivize people from achievements. The right degree of steepness depends on how one defines fairness and how much inequality a society can handle.

Paychecks protect people from poverty even in the worst case
One of the most interesting results I found was the effect of a paycheck (stable income). Obvious in retrospect! Even in the worst case where someone faced many unlucky events, if they had a paycheck or stable income, they can always bounce back and recover from bad luck. Plus, we saw that economic inequality can be diminished when the paycheck is a large fraction of one’s capital. Personally, I already knew stable income is useful, especially for the poor, but simulating it using a simple mathematical model was an interesting and meaningful experience.

Data visualization can provide insights on socioeconomic problem
Although we simplified complex topics like meritocracy and economic inequality, we were still able to visualize how various socioeconomic parameters influence the talent-success dynamics. Data visualization helps understand how the terms in a quantitative model interact with each other. It can also inspire us to explore new ideas and variations on an old one. When visualizing data, it’s important to start off simple, to run sanity checks like summary statistics or scaling, and to ask “Why?” whenever you find interesting patterns.


I myself was just thinking that a lot of political argument could be modeled mathematically. Of course people will argue about the parameters to the model, just like they argue about rent-vs-buy calculators, with people who want to justify buying putting in unrealistic appreciation numbers.

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1   Ceffer   2018 Mar 19, 10:48am  

"You're a victim of stochastics! Don't blame me that you are stochastics road kill!"

KILL THE STATISTICIANS! KILL THEM ALL!
2   anonymous   2019 Mar 6, 3:10pm  

Patrick says
If lucky events can bring large amounts of profit and unlucky events can bring huge losses to individual


Note: Keep reading past the Trump paragraph - don't get hung up on that one.

The radical moral implications of luck in human life - Acknowledging the role of luck is the secular equivalent of religious awakening

In July 2018 (when we first published this piece), there was a minor uproar when Kardashian scion Kylie Jenner, who is all of 21, appeared on the cover of Forbes’s 60 richest self-made women issue. As many people pointed out, Jenner’s success would have been impossible if she hadn’t been born white, healthy, rich, and famous. She built a successful cosmetics company — now valued at $900 million, according to Forbes — not just with hard work but on a towering foundation of good luck.

Around the same time, there was another minor uproar when Refinery29 published “A Week in New York City on $25/Hour,” an online diary by someone whose rent and bills are paid for by her parents. It turns out $25 an hour goes a lot further if you have no expenses!

These episodes illustrate what seems to be one of the enduring themes of our age: socially dominant groups, recipients of myriad unearned advantages, willfully refusing to acknowledge them, despite persistent efforts from socially disadvantaged groups. This is not a new theme, of course — it waxes and wanes with circumstance — but after a multi-decade rise in inequality, it has come roaring back to the fore.

Of course, socially dominant groups have every incentive to ignore luck. And they have found a patron saint in President Trump, who once claimed, “My father gave me a very small loan in 1975, and I built it into a company that’s worth many, many billions of dollars.”

Neither side of that claim is true. But in this, as in so much else, Trump’s brazenness serves as cover, a signal that it’s still okay to cling to this myth.

These recent controversies reminded me of the fuss around a book that came out a few years ago: Success and Luck: Good Fortune and the Myth of Meritocracy, by economist Robert Frank. (Vox’s Sean Illing interviewed Frank last year.) It argued that luck plays a large role in every human success and failure, which ought to be a rather banal and uncontroversial point, but the reaction of many commentators was gobsmacked outrage. On Fox Business, Stuart Varney sputtered at Frank: “Do you know how insulting that was, when I read that?”

It’s not difficult to see why many people take offense when reminded of their luck, especially those who have received the most. Allowing for luck can dent our self-conception. It can diminish our sense of control. It opens up all kinds of uncomfortable questions about obligations to other, less fortunate people.

Nonetheless, this is a battle that cannot be bypassed. There can be no ceasefire. Individually, coming to terms with luck is the secular equivalent of religious awakening, the first step in building any coherent universalist moral perspective. Socially, acknowledging the role of luck lays a moral foundation for humane economic, housing, and carceral policy.

Building a more compassionate society means reminding ourselves of luck, and of the gratitude and obligations it entails, against inevitable resistance.

So here’s a reminder.

How much credit do we deserve for who, and where, we end up?

How much moral credit are we due for where we end up in life, and for who we end up? Conversely, how much responsibility or blame do we deserve? I don’t just mean Kylie Jenner or Donald Trump — all of us. Anyone.

How you answer these questions reveals a great deal about your moral worldview. To a first approximation, the more credit/responsibility you believe we are due, the more you will be inclined to accept default (often cruel and inequitable) social and economic outcomes. People basically get what they deserve.

The less credit/responsibility you believe we are due, the more you believe our trajectories are shaped by forces outside our control (and sheer chance), the more compassionate you will be toward failure and the more you will expect back from the fortunate. When luck is recognized, softening its harsh effects becomes the basic moral project.

Understanding the role of luck begins with getting past the old “nature versus nurture” debate, which has always captivated the public, not so much because of the science but because of the deeper existential questions involved.

“Nature” has come to serve roughly as code for the stuff we’re stuck with, our bodies, our genes — an arrow fate has already fired, with a preset path. And “nurture” has become shorthand for our capacity for change, our ability to be shaped by circumstances, other people, and ourselves, to wiggle and move about within that path, or even escape it. It’s shorthand for our range of control over our fates.

But this has always struck me as a misguided way to look at it.

Both nature and nurture happen to you

Of course it is true that you have no choice when it comes to your genes, your hair color, your basic body shape and appearance, your vulnerability to certain diseases. You’re stuck with what nature gives you — and it does not distribute its blessings equitably or according to merit.

But you also have no choice when it comes to the vast bulk of the nurture that matters.

Child development psychologists tell us that deep and lasting shaping of neural pathways happens in the first hours, days, months, and years of life. Basic dispositions are formed that can last a lifetime. Whether you are held, spoken to, fed, made to feel safe and cared for — you have no choice in any of it, but it more or less forms your emotional skeleton. It determines how sensitive you are to threat, how open you are to new experience, your capacity to exercise empathy.

Children aren’t responsible for how they spend their formative years and the permanent imprint it makes upon them. But they’re stuck with it.

Legally speaking, here in the US, we don’t consider people autonomous moral agents, responsible for their own decisions, until they are 18. Obviously, different cultures have different ages and markers for adulthood (moral agenthood), but all cultures mark a transition. At some point, a child, an instinctual creature not fully responsible for their decisions, becomes an adult, capable of using higher cognitive functions to shape and moderate their behavior according to shared standards, and to be held accountable if they don’t.

For the purposes of this argument, it doesn’t matter much where you draw the line between child and adult. What matters is that it takes place after the bulk of temperament, personality, and socioeconomic circumstance are in place.

So, then, here you are. You turn 18. You are no longer a child; you are an adult, a moral agent, responsible for who you are and what you do.

By that time, your inheritance is enormous. You’ve not only been granted a genetic makeup, an ethnicity and appearance, by accidents of nature and parentage. You’ve also had your latent genetic traits “activated” in a very specific way through a specific upbringing, in a specific environment, with a specific set of experiences.

Your basic mental and emotional wiring is in place; you have certain instincts, predilections, fears, and cravings. You have a certain amount of money, certain social connections and opportunities, a certain family lineage. You’ve had a certain amount and quality of education. You’re a certain kind of person.

You are not responsible for any of that stuff; you weren’t yet capable of being responsible. You were just a kid (or worse, a teen). You didn’t choose your genes or your experiences. Both nature and the vast bulk of the nurture that matters happened to you.

And yet when you turn 18, it’s all yours — the whole inheritance, warts and all. By the time you are an autonomous, responsible moral agent, you have effectively been fired out of a cannon, on a particular trajectory. You wake up, morally speaking, midflight.

Acknowledging luck — or, more broadly, the pervasive influence on our lives of factors we did not choose and for which we deserve no credit or blame — does not mean denying all agency. It doesn’t mean people are nothing more than the sum of their inheritances, or that merit has no role in outcomes. It doesn’t mean people shouldn’t be held responsible for bad things they do or rewarded for good things. Nor does it necessarily mean going full socialist. These are all familiar straw men in this debate.

No, it just means that no one “deserves” hunger, homelessness, ill health, or subjugation — and ultimately, no one “deserves” giant fortunes either. All such outcomes involve a large portion of luck.

The promise of great financial reward spurs risk-taking, market competition, and innovation. Markets, properly regulated, are a socially healthy form of gambling. There’s no reason to try to completely equalize market outcomes. But there’s also no reason to allow hunger, homelessness, ill health, or subjugation.

And there’s no reason we shouldn’t ask everyone, especially those who have benefited most from luck — from being born a certain place, a certain color, to certain people in a certain economic bracket, sent to certain schools, introduced to certain people — to chip in to help those upon whom life’s lottery bestowed fewer gifts.

And it is entirely possible to do both, to harness market competition while using the wealth it generates to raise up the unlucky and give them greater access to that very competition.

“If you want meritocracy,” Chris Hayes argued in his seminal book Twilight of the Elites, “work for equality. Because it is only in a society which values equality of actual outcomes, one that promotes the commonweal and social solidarity, that equal opportunity and earned mobility can flourish.”

Neither human genes nor human societies distribute life’s gifts according to any principle we would recognize as fair or humane, given the extraordinary role of luck in our lives. We all become adults with wildly different inheritances, starting our lives in radically different places, propelled toward dramatically different destinations.

We cannot eliminate luck, nor achieve total equality, but it is easily within our grasp to soften luck’s harsher effects, to ensure that no one falls too far, that everyone has access to a life of dignity. Before that can happen, though, we must look luck square in the face.

More: https://www.vox.com/science-and-health/2018/8/21/17687402/kylie-jenner-luck-human-life-moral-privilege

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