There is an interesting review of Talent vs Luck: the role of randomness in success and failure from the University of Catania (the main University in Sicily).
They start from the idea that there is a Gaussian distribution of talent (as I understand it, this Gaussian distribution is just a normal distribution, so if, say, we accept that people are of widely different heights, the distribution is not from 2 inches to 1000 feet, but clustered within striking distance, as it were, of average height – in Europe 5ft 10ins.) Now, I think this assumption entirely reasonable and I think – I’m sure others will point out if I’m wrong – that they have actually run their model so many times that it would not much matter if the talent variation was a bit larger than they assume.
the resulting distribution of success/capital after a working life of 40 years, follows a power law which respects the ”80-20” Pareto law for the distribution of wealth found in the real world. An important result of the simulations is that the most successful agents are almost never the most talented ones, but those around the average of the Gaussian talent distribution – another stylized fact often reported in the literature. The model shows the importance, very frequently underestimated, of lucky events in determining the final level of individual success. Since rewards and resources are usually given to those that have already reached a high level of success, mistakenly considered as a measure of competence/talent, this result is even a more harmful disincentive, causing a lack of opportunities for the most talented ones. Our results are a warning against the risks of what we call the ”naive meritocracy” which, underestimating the role of randomness among the determinants of success, often fail to give honors and rewards to the most competent people.
The success of the average-talented people strongly challenges the ”meritocratic” paradigm and all those strategies and mechanisms, which give more rewards, opportunities, honors, fame and resources to people considered the best in their field. The point is that, in the vast majority of cases, all evaluations of someone’s talent are carried out a posteriori, just by looking at his/her performances – or at reached results. This kind of misleading evaluation ends up switching cause and effect, rating as the most talented people those who are, simply, the luckiest ones. In line with this perspective, we already warned, in previous works, against such a kind of ”naive meritocracy”.
In short, they notice the ‘’absence of any correlation between success and talent’’; there is, however ‘’a very strong correlation between success and luck.’’
So now we know.
The ‘meritocracy’ has been rumbled. The cream does not, after all, always rise to the top. It is at least as likely to be the froth.
It turns out that the mediaeval wheel of fortune was the right thing to believe in all along.
Further, while it is a bit unfair not to highlight their conclusions (which are that research grants would achieve as much success if distributed equally to all legitimate applicants) the report also demonstrates why tax is an important tool for fairness. It can be used to balance some of the ill-effects of that still functioning, medieval wheel of fortune.
Indeed, the report provides further evidence against the idea that successful people are all terribly clever and unless we pander to them we risk losing them to other jurisdictions – where they will feel obliged to escape, taking their intelligence along with their remarkable talents.
We can now confidently wave them on their way and wish them luck with their spin on someone else’s wheel of fortune.