Strawman: Wealth is “the inevitable result of hard work and enterprise”

Government intervention can prevent the ascension to wealth, despite hard work and enterprise.

More facebook economic wisdom to impart, this time from the Being Liberal page, via the Shit Statists Say page:

Deep Thoughts, c/o Being Liberal.

Deep Thoughts, by George Monbiot.

I don’t like to stuff words in people’s mouths, but I can’t help but read this graphic in a way that in unflattering to supporters of free markets. 

The insinuation seems to be that a substantial proportion of Being Liberal‘s ideological opponents labor under the misapprehension that “wealth is the inevitable result of hard work and enterprise”. Incapable of thinking for themselves, these opponents are the mental slaves of capitalist propagandists. Free-thinking liberal progressives know the real truth, which is that hard work and enterprise do not inevitably bring wealth. If only Being Liberal‘s ideological opponents would FREE THEIR MINDS by THINKing, they would see the truth, so the insinuation goes. Naturally, I find this characterization of free-marketeers beliefs to be unfair.

Plainly, wealth is not the inevitable result of hard work and enterprise. Hard work and enterprise are necessary conditions for wealth, but they are not sufficient conditions. For example, look above at the picture of the African women hard at work on their farm. What sort of equipment are they using? Are those hoes hand-made? Look: No matter how hard they work, and no matter how enterprising they are, these women will never become millionaires by pecking at the ground with hand-made hoes. It simply isn’t going to happen. Wealth is not the inevitable result of hard work and enterprise. You have to work smart to get rich. Where is the industrial equipment?

The graphic itself neither suggests a problem nor proposes a solution beyond THINKing. The quote’s source is George Monbiot’s article entitled The Self-Attribution Fallacy. George tells us more about how he thinks the wealthy get that way:

The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves(1). He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers, across eight years. He found that the consistency of their performance was zero. “The results resembled what you would expect from a dice-rolling contest, not a game of skill.” Those who received the biggest bonuses had simply got lucky.

Such results have been widely replicated. They show that traders and fund managers across Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out they blanked him. “The illusion of skill … is deeply ingrained in their culture.”(2)

So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgement, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?

I don’t fully believe what George is saying here about skill, but I won’t blank out. I’ll make a deal with him. Here’s the deal: I’ll seriously look further into psychologist Daniel Kahneman’s claims if, but only if, George Monbiot would be gracious enough to write a piece denouncing occupational licensing because it serves no useful purpose. Am I right? If, as George suggests, no one person possesses any special skill above any other person, then the government has no business shutting people out of the marketplace on account of their failure to qualify for, pay for, and perform well on standardized tests. If the government allowed more people to throw dice in the first place, then maybe more people could become rich. Would that not be a modest societal improvement at little to no societal cost? If George Monbiot will agree with me on that, then I’ll eat some humble pie and read up on Mr. Kahneman. I don’t expect it to happen.

But that’s all beside the point. George Monbiot is absolutely correct that luck is another ingredient of wealth. Being in the right place at the right time to strike a deal and simply being born into privilege to begin with both factor heavily in whether a person will acquire material riches. But what about these African women? Are they all just, sort of, chronically unlucky? Is that why they don’t have any industrial farm equipment? George continues:

In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses(3). They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses’s scores either matched or exceeded those of the patients. In fact on these criteria they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.

The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.

Monbiot walks the well-worn trail blazed earlier by the makers of the film The Corporation, which makes a similar claim regarding the psychopathy of the corporate person. Very well, but is that where industrial farm equipment comes from? Are these women too nice, and too pure of spirit to own industrial farm equipment? Would these women acquire industrial farm equipment if only they were more conniving, more manipulative, more egocentric, less empathetic, and more psychopathic? Maybe, but I have my own suspicions. They run something like this, from an article called Africa and the Difference Between Growing Food and Eating It, courtesy of the Foundation for Economic Education:

The simple fact is that following independence, many African governments adopted highly interventionist if not outright socialist policies. The purpose of these policies was to stimulate the industrial sector; their effect was to penalize the agricultural sector. These policies included high taxes, often in excess of 50 per cent, on agricultural products; price controls on food; monopolistic marketing boards; the abolition of the private sale of food products and farm implements, often brutally enforced; coercively established and maintained state farms; land reforms that placed farmers’ land, especially that of the more prosperous farmers, in perpetual uncertainty; and acreage limitations on the size of “private farms” that were often so low as to preclude the use of mechanized equipment.[18]

There is little doubt that these policies, which amounted to nothing short of an assault on agriculture, resulted in a drastic reduction in agricultural output. …

Emphasis added. This sounds a little more likely to me. If George Monbiot and Being Liberal are serious about improving the status of hard-working African women, then my suggestion to them would be to read a little less about how skills are irrelevant to success, interesting as that may be, and to read a little more about how the forceful interventionist policies of African governments have devastated Africa’s agricultural industry.

Just out of curiosity: Are there any studies out there on the potentially psychopathic qualities of government despots? I’ll have to Google that up some other time.

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One Response to Strawman: Wealth is “the inevitable result of hard work and enterprise”

  1. Bunyuen says:

    Thank you for an intelligent response to this idea, which is now (2015) making a reappearance on Facebook.

    I was wondering: Did anyone ever say that wealth is the inevitable result of hard work and enterprise?

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