Businessweek Says Most Wealth Comes from Pure Luck


The myth says that wealthy people become wealthy by hard work and are, therefore, entitled to their wealth. That myth appears to have been busted though. According to Businessweek a person may become successful and achieve some amount of wealth through hard work, but the very wealthy usually get there by pure luck and circumstances beyond their control. The key factor seems to be, not your chosen profession, the school you attended, the grades you got or how many hours a week you work but who your parents are:
"In the U.S., about 50 percent of variation of wealth and about 35 percent to 43 percent of variation in income of children can be explained by the relative wealth and income (PDF) of their parents, suggest economists Samuel Bowles and Herbert Gintis. One reason for this tight relationship is that parents who were educated are far more likely to educate their own kids. According to Michael Greenstone and Adam Looney of the Brookings Institution, the median wage of the average American male—employed or not—has declined by $13,000 since 1969. Most of that drop is because of plummeting earnings among those with a high school diploma or less, something that’s highly dependent on your parents. Evan Soltas examined the General Social Survey data and concluded that if your father didn’t graduate high school, you are eight times more likely not to graduate high school yourself—a 22.2 percent chance, as compared to a 2.9 percent chance among kids whose fathers did graduate." 

Defenders of the wealthy and entitled have always argued that society provides "equal opportunity" but can't guarantee "equal outcomes".  The thing is that society does not, in any way, provide equal opportunities. Opportunities have never been equal and, in these days of, completely unnecessary austerity budgets, opportunities are becoming less and less equal.

The reality is that society never has and probably cannot provide equal opportunities. Even if we can someday overcome prejudice based on race, gender, sexual orientation, etc. some people will always be wealthier and better connected. Some people will grow up with better parents than others, some will be healthier, some will be naturally more attractive, more intelligent and more charismatic.

These are not things that are earned, they are a matter of DNA and pure, dumb luck. The old myths have to die. Society cannot guarantee completely equal outcomes but must do much, much more to guarantee more equal opportunities and more equal outcomes.
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