Monday, August 8, 2016
The last book by Robert H. Frank
In 2013, I published in the Journal of Economic Inequality a review of "The Darwin Economy", written by Robert H. Frank. In that book, this economist explained the mechanisms of wasteful status competition, and how it can be mitigated with the public policy tool of a progressive consumption tax. Now Frank insists with the same ideas in "Success and Luck. Good Fortune and the Myth of Meritocracy." The approach this time is to give emphasys to the role of luck in being successful (and triggering wasteful cascades of status competition). Luck plays a hidden but decisive role in performance, even if talent and effort matter as well. Since luck is most probably independently distributed from talent and effort, equally talented and hardworking people may have very different levels of luck, and therefore not necessarily all the most talented and hardworking will succeed. This is very well explained in chapter 4 and through simple and very well explained simulations in a first appendix. The problem for society is that the role of luck is not always recongnized by those that succeed, which implies that they will be reluctant to support the kinds of policies that make luck possible. These policies are those of infrastructure building and public education that today allow rich people in the rich world to enjoy a lucky advantage that those in poorer regions cannot enjoy. Compared to the book of some years ago, the new contribution has interesting auto-biographical parts on the role of luck in the life of the author. It also resorts more to experimental evidence and simulations, and responds to some reactions to the first book.