Read: Success and Luck - Good fortune and the myth of meritocracy
While I agree with Frank’s policy recommendation and how he arrived at his conclusion I cannot honestly say I have enjoyed his recent Success and Luck: Good Fortune and the Myth of Meritocracy.
The primary goal is not to tell a story about Success and the role of Luck it in, it is an argument for a progressive consumption tax and maybe also a reaction to earlier critique on Frank’s 2011 The Darwin Economy that argued for the progressive consumption tax, too.
While The Darwin’s Economy main rationale for the introduction of a progressive consumption tax was the reduction of wasteful conspicuous consumption that results from a consumption arms race as every consumption is assessed relative to some accessible standard, maybe the consumption of nearby (socially and geographically) reference group in society Success and Luck focuses on the chance element of being rich and successful as a justification for a tax on the (still wasteful) consumption of the rich.
The supply of status goods is limited and cannot be increased, therefore competition for these goods just drives their price up without improving the buyers' living standard. Or, a slightly inferior good, at a lower price, would result in an even higher enjoyment if the saved (that is taxed) amount of wealth is used for public goods like infrastructure.
Frank now argues that being rich is, despite all the effort and talent that were necessary, also largely determined by luck as being rich is the result of a competition with many competitors with similar abilities and willingness to exert effort. Any competition has an element of luck in. Taking a risk implies actually the reliance on luck, the submission of oneself to one’s good fortune, not skill, not effort. As the prize of the competition is largely determined by the society, a rich society offers bigger prizes as the prize is related to the individuals human and the societies material capital. Both are at least partially the result of public goods, public investments, and therefore taxes. Consequently, the lucky rich should just (shut up and) pay it forward to enable the next generation of high(er) prized tournaments.
Nothing wrong with that. I could not agree more. I also do not mind Frank’s rather personal perspective in his narrative and rhetoric.
What is wrong is this:
Success and Luck is a neat, short book. Being short is a virtue (for a book). Frank, indeed mentions that he could have written more but chose to keep it short, not adding any unnecessary tangential material. Great. However, there is little that is new. Most (all?) of the ideas and examples that illustrate Frank’s points are already in The Darwin Economy. Indeed, I was tempted to run the present text through a plagiarism detection software to see whether he just cut and pasted the old material or whether he at least attempted some rephrasing. Either way, I found this recycling and its extent highly annoying. Even the idea of the winner takes all, the role of luck and its use as a justification for a consumption tax was already discussed at length in another earlier book of Frank’s, The winner-take-all society, published in 1995.
The original (?) content can be boiled down to the two appendices. The first offers a numeric example illustrating the impact of luck on winning contests with many participants if luck even only marginally influences performance. The second is a FAQ on the introduction of a progressive consumption tax. And yes, FAQ implies he must have answered these frequent questions already elsewhere. Hence, the numerical example is probably the only original contribution of the book. The book could have been much shorter. It should have been a blog post.
At the very least, Frank should have put a warning somewhere that he is just reorganizing old material that he has already published elsewhere. Even though his two old books are referenced for some specific points, he never acknowledges the substantial extent of overlap in ideas and concrete examples between his seemingly separate works. He is selling old wine in new bottles (which, by chance, is also a chapter title in his 1995 book). Frank cheats his readers.