The documentary is about the 2013 Cliburn International Piano Competition, named for the late Van Cliburn. The Cliburn is one of the foremost musical competitions in the world. Thirty superb pianists entered and played for a jury consisting of internationally renowned musicians. After the first round, only 12 were chosen to continue on. The second round winnowed the field to six finalists.
Those six all played superbly, as you can see and hear in Virtuosity, but prizes went to only three: third to Sean Chen of the United States, second to Beatrice Rana of Italy, and first to Vadym Kholodenko of Ukraine. For those three, and especially Kholodenko, the awards boosted their careers into orbit.
But were they really better than the others? If a juror or two had felt just slightly differently along the way, any of the 27 also‐rans might have taken one of the awards. Kholodenko, Rana, and Chen, on the other hand, might have gone back home to their previous lives, hearing friends say, “Better luck next time.”
Who happens to come away with life’s big prizes, pianistic and otherwise, is the subject of Robert Frank’s recent book, Success and Luck. Frank, a professor of economics and management at Cornell University, has spent decades thinking about the role of luck in our society. More than 20 years ago he co‐authored the book The Winner‐Take‐All Society, arguing that the developed world’s markets are increasingly “winner‐take‐all,” in which one person or company rakes in almost all the rewards of success with little left for the rest of the field. In his latest book, Success and Luck, he returns to this theme and explains why he finds it problematic.
Small differences, big rewards / “In recent years,” Frank writes, “social scientists have discovered that chance events play a much larger role in important life outcomes than most people once imagined.” Despite the American belief in meritocracy, he argues that success and failure “often hinge decisively on events completely beyond any individual’s control.” The actor Bryan Cranston, for example, is now enjoying a booming career, his high demand a result of his starring role as methamphetamine kingpin Walter White in the TV series Breaking Bad. Frank points out that Cranston was only offered that role after John Cusack and Matthew Broderick turned it down. Yes, Cranston is a fine actor, but without that lucky break he would have been remembered for the respectable but not landmark role of father Hal in the comedy series Malcom in the Middle.
The business world, Frank contends, is full of such good‐luck stories. In the market for tax preparation software, for instance, numerous programs that were perfectly capable once competed. But owing to some favorable reviews, Intuit’s Turbo Tax eventually came to dominate the field. “Its developers profited enormously, even as those whose programs were almost as good were being forced out of business,” Frank laments.
Of course, it has always been true that a few lucky ones manage to reap great rewards even though they were little if any better than their rivals. But Frank maintains that the march of technology is magnifying the gap between winners and losers in such varied fields as law, medicine, sports, journalism, retailing, and even academia. In a revealingly egalitarian passage, he writes:
It’s one thing to say that someone who works 1 percent harder than others or is 1 percent more talented deserves 1 percent more income. But the importance of chance looms much larger when such small performance differences translate into thousand‐fold differences in earnings.
Much ado? / But is the “winner‐takes‐all” trend really becoming more pronounced? For all of his anecdotes, Frank’s claim that it is rests on nothing more than his ipse dixit. The same technological change that allows some to get exceptionally wealthy is also making markets open to far more people than ever before: publishing, for example. It also allows competitors to erode the positions of the lucky winners more rapidly than ever. This part of Frank’s case, I would say, is doubtful.
The key questions remaining are why this trend (assuming it exists) is harmful and what the author proposes to do about it.
One reason why the trend is harmful, according to Frank, is that the quest for great success “may encourage people to compete where they have no realistic prospects.” True enough, but hasn’t that always been so? For the last century, vast numbers of young Americans have, for example, devoted a great deal of time and energy to perfecting their jump‐shots, fastballs, and tackling even though the chance of making it into one of the major leagues (with a multi‐million‐dollar contract) is vanishingly small. Many others have tried to “make it big” in music or acting, even though the odds of success are similarly microscopic. And still more, lured by the possibility of gigantic profits, have tried to invent things and market them, but like the rivals to Turbo Tax, failed. Frank focuses only on the business failures, but even when people don’t achieve their dreams, they usually gain from their efforts in ways that make future success more likely. As Thomas Edison said of his many unsuccessful experiments, “I didn’t fail, but learned what didn’t work.”
But there is a far bigger problem according to Frank: the few plutocratic winners damage the nation with their prodigious spending on mansions, hyper‐expensive cars, over‐the‐top weddings, and so on. All of that conspicuous consumption really doesn’t make them happier, he claims:
Wealthy Americans have been building bigger mansions simply because they’ve received most of the country’s recent income gains. Yet there’s no evidence that, beyond a certain point, bigger houses make people any happier. Once houses reach a certain size, further increases in square‐footage merely shift the frame of reference that defines adequate.
While the rich are engaged in a sort of arms race to out‐do each other, public investment suffers, he claims. Channeling John Kenneth Galbraith’s complaints in The Affluent Society (1958), Frank sees an America in which the wealthy are living it up at the expense of a starving public sector. He employs this analogy to make his point: we are like a driver who has a $300,000 Ferrari that bumps along on pothole‐ridden roads when we could instead have a $150,000 Porsche that we drive on perfectly smooth roads.
We suffer from a huge infrastructure deficit of some $3.6 trillion but, Frank argues, the rich fail to understand that they were just lucky and therefore oppose paying the higher taxes that would lead to better roads for all, better education for everyone’s children, and so on. In short, we’d all be better off—even the rich—if they paid more in taxes and stopped their wasteful spending.
Several glaring problems beset his argument.
First, all of that needless (to Frank) spending by the rich provides the income for many people who are not rich. Consider the outlandish Manhattan weddings that now cost on average $76,000. Frank sees wasteful one‐upsmanship, but to the companies employed and their workers, that’s the money that pays the bills. The de‐escalation of the arms race on weddings, houses, cars, boats, etc., that Frank wants would inflict serious pain on many Americans whose livelihoods depend on rich people spending money on their lifestyles.
Second, it isn’t true that the super‐rich have dug in their heels to oppose any and all tax increases on them. A great many of America’s billionaires are supporters of leftist politicians who have pledged to make the rich pay much higher taxes. Something other than insatiable greed of the 1 Percenters is necessary to explain why the tax code lets them keep so much of the money they’ve been lucky enough to acquire.
Third, Frank’s proposed tax transfer of much of the wealth of the lucky few to the government would not produce the social benefits he envisions. That is because he assumes that if the federal treasury had billions more, the politicians and bureaucrats would spend it wisely to give us smooth roads, strong bridges, efficient passenger rail, and above all, good schools for everyone. That is to say, Frank exhibits the standard “liberal” wishful thinking that we can solve our problems by just spending enough on them. Could this eminent economist be unfamiliar with the public choice critique of government spending? Is he unaware that many of the school districts that spend the most per student have consistently poor results? Apparently so.
Frank’s proposed solution to the alleged problem that the lucky are “taking” too much of society’s income and squandering it is not to ramp up the highest income tax brackets, as you might suppose. Rather, he wants to replace the progressive income tax with a progressive consumption tax. That change would, he contends, reduce wasteful consumption spending (especially by the super‐rich) while encouraging saving and investment.
Actually, there is much to be said for shifting away from the income tax and into a consumption tax. But the case for that doesn’t have anything to do with luck or the “expenditure cascades” of the rich. Frank is prescribing a helpful medicine based on an erroneous diagnosis of the patient’s condition.
Success and Luck is not without its useful insights. Foremost among them is Frank’s point that the “college earnings premium” that many educators site as proof that we need to put more young people through college is a mirage. That “premium” exists, he notes, only because a small number of college graduates have enjoyed spectacular earnings. For most college grads, earnings are modest and haven’t grown much. Coming from a college professor, that’s quite a rebuke to the crowd calling for the United States to regain the world’s top spot with regard to the percentage of the populace with college degrees.
Nevertheless, the book’s big point is one that gives aid and comfort to redistributionists who will use almost any argument to justify expansion of the state. “You just got lucky” works just as well for them as another recent claim: “You didn’t build that.”
