The World Is Unfair

The World Is Unfair

Is the world that unfair? I have spent my entire life studying randomness, practicing randomness, hating randomness. The more that time passes, the worse things seem to me, the more scared I get, the more disgusted I am with Mother Nature. The more I think about my subject, the more I see evidence that the world we have in our minds is different from the one playing outside. Every morning the world appears to me more random than it did the day before, and humans seem to be even more fooled by it than they were the previous day. It is becoming unbearable. I find writing these lines painful; I find the world revolting.

Consider a “soft” scientist’s intuitive model of this inequity. It is easy to understand, but I think it simplifies too much and gives too little weight to luck.

Let me start with the economist Sherwin Rosen. In the early eighties, he wrote papers about “the economics of superstars.” In one of the papers he conveyed his sense of outrage that a basketball player could earn $1.2 million a year, or a television celebrity could make $2 million. To get an idea of how this concentration is increasing—i.e., of how we are moving away from Mediocristan—consider that television celebrities and sports stars (even in Europe) get contracts today, only two decades later, worth in the hundreds of millions of dollars! The extreme is about (so far) twenty times higher than it was two decades ago!

According to Rosen, this inequality comes from a tournament effect: someone who is marginally “better” can easily win the entire pot, leaving the others with nothing. Using an argument from Chapter 3, people prefer to pay $10.99 for a recording featuring Horowitz to $9.99 for a struggling pianist. Would you rather read Kundera for $13.99 or some unknown author for $1? So it looks like a tournament, where the winner grabs the whole thing—and he does not have to win by much.

But the role of luck is missing in Rosen’s beautiful argument. The problem here is the notion of “better,” this focus on skills as leading to success. Random outcomes, or an arbitrary situation, can also explain success, and provide the initial push that leads to a winner-take-all result. A person can get slightly ahead for entirely random reasons; because we like to imitate one another, we will flock to him. The world of contagion is so underestimated!

As I am writing these lines I am using a Macintosh, by Apple, after years of using Microsoft-based products. The Apple technology is vastly better, yet the inferior software won the day. How? Luck.