The Stories We Tell

The Stories We Tell

Everybody has a story.

In general, but especially when it comes to explaining their own financial success and economic well being. For our purposes here, I’ll be speaking in the context of developed markets, by the way.

In democratic nations fortunate enough to boast of advanced economies operating on some version of capitalism, the prosperous demonstrate an almost unshakable belief in the meritocratic origins of their success. That penchant for ascribing good fortune to merit is understandable. Ascribing it to anything else is to admit that luck, happenstance, coercion, cheating or something else not readily amenable to the stories we tell about ourselves played a role. That’s an uncomfortable admission.

Uncomfortable though it may be, it’s obvious that meritocratic narratives are almost wholly false. At a very basic level, being born a human in a developed economy in a period during which people enjoy access to unprecedented creature comforts and medical technology is akin to having won the lottery many times over. I mention this occasionally as I think it’s good for folks to keep perspective. Rerun history a million times and the chances of you being born a human into a rich nation in the 20th or 21st centuries are infinitesimal. Indeed, rerun history a million times from the beginning and the chances of you being born at all are infinitesimal.

In that sense, it’s all luck. If you’re reading this from an internet-connected device in a rich country, you are, in many respects, one of the luckiest creatures to ever inhabit the planet, although crucially, that doesn’t mean you’re one of the happiest.

Most educated, prosperous people won’t dispute any of that, but oddly enough, they’ll dispute the notion that they don’t “deserve” what they have (in terms of wealth and material possessions) compared to someone else born lately into a rich nation. People invariably feel sorry for refugees in Syria, for example, and most rational people understand that it was a matter of pure chance that their child ended up born a member of America’s upper-middle class versus one of the voiceless children currently caught in the crossfire of Yemen’s civil war.

Somewhere along the way, though, the logic breaks down when it comes to empathizing with one’s own countrymen and women in developed economies. America’s prosperous are far more likely to think “My God, that could have been my child” when they happen on a TV commercial for a charity committed to saving child refugees, than they are to hear about another day of gun violence in Chicago and think “You know, in a parallel universe, I’m that single mother whose teenager was killed in a gang-related shooting.”

In America, the tendency to tell ourselves and others meritocratic stories is especially acute and it’s a natural byproduct of capitalism. It also serves as a catch-all justification for an aversion to higher taxes on the wealthy. “I deserve what I have because I worked for it” may be an entirely accurate way to describe where you ended up (and by extension, where your children get to start out), but you almost surely wouldn’t have ended up there had your initial circumstances been materially more challenging.

There are, of course, exceptions. If you spend a few hours on Google, you can find what seem like countless success stories documenting, for instance, refugees from war-torn nations or immigrants hailing from abject poverty who, through sheer force of will, cleared unimaginably high hurdles to become prosperous members of society in advanced economies.

But while those stories may appear countless if you’re searching for them on the internet, they pale in comparison to the number of untold stories where being born into poverty, war and generalized despair led to precisely the life outcomes you’d expect: More violence, lifelong economic precarity and perpetual suffering.

In my view, it’s absolutely crucial that prosperous people in developed economies come to terms with the reality described above so that you can cut through the propaganda around proposals like Joe Biden’s tax plan which, honestly, isn’t even very onerous.

Have a look at the figure (below). As Goldman wrote a few days ago, “top individual tax rates on ordinary income are relatively low in the US, at least for households in low-tax states, and even full implementation of the Biden program would only close the gap partly.”

“The 43.7% average combined federal, state, and local US top marginal income tax rate is toward the lower end of the international range, and would remain somewhat below the median even if the federal rate increases from 37% to 39.6%,” the bank went on to say.

The visual also shows that under the Biden proposal, the capital gains rate would be near the top-end of the international range, but the bank expects a more modest increase once everyone in Congress (where “everyone” basically just means Joe Manchin in today’s silly Beltway conjuncture) has had their say.

The narrow takeaway is just that there’s nothing particularly “radical” about Biden’s agenda, even as some argue it’s shifted further left since he was elected.

But the far more important takeaway is that, at a very basic level, it’s all luck. The meritocratic stories we tell ourselves are fictions, unless you want to couch them in Darwinian terms (e.g., “I deserve what I have because evolution worked hard to make me strong and smart”). I wouldn’t recommend evolutionary humanism as an excuse when it comes to explaining why you “deserve” your wealth. You might unwittingly find yourself the subject of some rather unflattering ideological comparisons.

Paradoxically, accepting that it’s all (or mostly) luck leaves you far freer to enjoy it than if you’re constantly struggling to spin a spurious meritocratic narrative to yourself in the mirror. If there is such a thing as a “sin,” surely it’s being handed a winning biological/demographic lottery ticket and taking it for granted.


10 thoughts on “The Stories We Tell

  1. Since no one chooses the brain that happens to sit in their head…they did not choose the particular sperm and egg, the country to be born in, the absence of abuse early in life, etc…and since everything we do and think originates in the brain, it is obvious that free will is simply an illusion that our consciousness creates. Understanding this has made me more humble and less critical of others.

  2. My wife was diagnosed with early onset Alzheimer’s 12 years before dying from the disease and probably had it for at least five years longer. All of this was certainly unlucky, for both of us, though it was somewhat inevitable; her father and 7 of his brothers also died from the disease. When my wife of 54 years finally entered full care five years before the end, she no longer knew my name or who I was. She had been a distinguished college professor for nearly 30 years, as well as my colleague and coauthor. So I had lost my best friend and intellectual companion long before the end. To try to get some help with that I was lucky to find a wonderful psych counselor with whom I spent a wondrous hour weekly for three years before he retired. That time was generally spent in self-assessment and discussions of ethics. I took copious notes through those sessions and what I came to learn was just how lucky I had been in my life. I have escaped almost certain death on five occasions, starting in the mid-1950s and extending to roughly eleven years ago. I was born to the right parents at the right time, learned from the right teachers and mentors, invested successfully during the longest bond bull market in history, married the right woman, lucked into the right job and been offered numerous other opportunities I was luckily prepared for and which I took advantage of. Recently, as a result of what I learned in my counselng sessions and also in the daily insights I get in this blog, I have fully realized just how lucky I am (hence the choice of my handle for my comments — also the name of one of my favorite movies). I believe in merit[ocracy] but I have watched as my brilliant and successful daughter has been long disrespected and economically cheated by our system that systematically deprives women, persons of color and unlucky ethnicity of their rightful due. While this has been painful to watch, she, too, has still been lucky and has worked very hard to get where she is, free to live the life she mostly craves with her family (a lucky second chance). She tells me regularly that we all tell ourselves, and others, our personal stories, as we see them. Many Asian cultures place great store in luck. Now that I reflect on the amount of luck I have enjoyed, I too believe in this wonderful happenstance and find that I want to share mine with others who have less. My mother believed sincerely in predestination. I do not, but I do believe in luck, good and bad.

  3. I recall a distinct incident in which I watched the gardener enter the yard with his lawnmower, efficiently cut the lawn, then move over and reprogram the irrigation system, test it out, and leave to his next job, all in the space of about 20 minutes. I remarked to myself how much better he was at his job than I am at mine, yet I am paid far more than he is. I mused on what he might have been able to achieve if he had been born in my place–and how I might struggle to find work had I been born in his.

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