February 12, 2011
What If Winning Is More About Luck Than Merit?
Someone had to win the Super Bowl. It might have taken 12 overtimes, but one way or another that game was not going to end in a tie. And despite the fact that the teams might well have been perfectly evenly matched in every meaningful way, we would likely immediately rush out after the game to point out all the "attributes" of the winning team that led to them being deserving champions.
This phenomenon was best expressed to me a while back in terms of a coin-flipping example: If you fill a stadium with coin-flippers and eliminate those that toss tails every round you will eventually end up with one individual who has flipped heads an inordinate number of times (accounting for rules to deal with ties, of course). How hard is it to imagine that if we cared enough about the outcome of this "competition" we would start to look for reasons to explain the success of the few "great" coin flippers remaining as we neared the end of the contest? This example was cited to me in the course of a discussion about great stock pickers like Warren Buffett, in response to the suggestion that efficient market theories predicting that no one can beat the market must be bunk because if that were true you wouldn't see the repeated success of the likes of Warren Buffett.
What made me think about this today was an article in the Wall Street Journal written by Neil Strauss entitled "God at the Grammys: The Chosen Ones" wherein he points out how prevalent it is for major stars (apparently including adult video stars) to believe that God has preordained their tremendous success: "[W]hat's helping these stars is not so much religion as belief—specifically, the belief that God favors their own personal, temporal success over that of almost everyone else."
Strauss's point is that this sort of belief actually facilitates success. This may be true, but I also think this sort of belief helps assuage any doubt that might creep in as to whether any one individual actually deserves so much success in light of the insufferable conditions many in the world are living in, which is a point that, if true, may have some relevance to our business law. Here in the U.S. much of our legal system regulating business activity is rooted in beliefs about success, competition and merit that justify the "winners" retaining the greatest slice of the relevant pie. These beliefs are often as cherished (particularly by those who end up with the big slices) as many people's religious beliefs. But what if the winners were just lucky? Then we would likely say that the retention of this excessive wealth by a few was fundamentally unfair. But that sort of success can't possibly be primarily a function of anything remotely equating to luck . . . can it?