Do rich people owe their success to luck? The iconic business magazine Fortune has just put the spotlight on a new book with a new take on how much good fortune contributes to grand fortunes.
Questions about luck go “straight to the roots of our beliefs about ‘deserved-ness’ in society,” note Ash Ali and Hasan Kubba, the authors of this just-published opus, The Unfair Advantage: How You Already Have What It Takes to Succeed.
Ali and Kubba at first appear to stand firmly in the luck-really-counts camp. Early on in their Fortune piece, they quote billionaire Warren Buffett openly acknowledging that “I’ve had a lot of luck.”
“I was born in 1930 with two sisters that have every bit the intelligence and drive, but didn’t have the same opportunities,” the Sage of Omaha continues. “If I’d been Black, my future would have been entirely different. If I’d been female, my future would have been entirely different.”
Billionaire Bill Gates, Ali and Kubba point out, just happened to have a mom who sat on the board of IBM. Mom helped young Bill “get the contract that led to a lucrative relationship” between IBM and the then fledgling Microsoft.
And Elon Musk, the world’s current richest man, came into our world as the son of an emerald mine owner in apartheid South Africa.
Then Ali and Kubba suddenly switch gears. Yes, they argue, deep pockets like Buffett, Gates, and Musk have had unfair advantages along their way to grand fortune. But “we all have unfair advantages” of one sort or another, and even our disadvantages can work to our benefit. You didn’t have much money growing up? That monetary minus “can make you more creative and resourceful.”
Now luck, Ali and Kubba note, can still play a role, and many successful entrepreneurs don’t realize how critical that role can be until they try — and fail — to start a second or third business. Only one in a thousand business owners score entrepreneurial successes three or four times in a row.
That stat has convinced Ali and Kubba that Elon Musk’s success — with PayPal, Tesla, SpaceX, and Neuralink — can’t possibly be a matter of luck.
“You don’t get that lucky,” they contend, “four times in a row.”
Musk must owe his good fortune to his own personal “unfair advantages”: “his seemingly superhuman work ethic, his ability to somehow claw back success from the brink of failure and bankruptcy, to disrupt and change entire trillion-dollar industries, and his uncanny ability to not only predict the future, but to make it.”
“The old debate about hard work v. luck takes on a new dimension when you start to see it through the lens of unfair advantages,” sum up Ali and Kubba. “Musk, like all successful people, simply leveraged his.”
The bottom line for Ali and Kubba: Our most “successful” owe their good fortune to leveraging one or another of the “unfair advantages” we all individually carry.
But could other factors ever come into pivotal play? Could our super rich, for instance, owe formidable chunks of their fortunes to simple ruthlessness?
Worth magazine, on the eve of the 21st century, put that question to a cross-sample of American top-1 percenters, deep pockets earning, in today’s dollars, close to $500,000 a year or holding assets worth close to $5 million. Only 2 percent of the wealthy Worth polled called “being more ruthless” a significant key to success.
What keys did these wealthy credit? Some 98 percent of them attributed financial success to “greater determination.” Almost as many, 95 percent, tied success to “greater ability or talent,” and 91 percent told the pollsters the financially successful have “greater intelligence.”
All this hard work, talent, and intelligence, the wealthy appear to believe, contribute much more to financial success than mere happenstance — or unsavory personal qualities. The wealthy polled by Worth rated intelligence over twice as important to accumulating wealth as “knowing the right people” and talent as twice as important as “luck.” A willingness to take risks, they suggested, makes success in life four times more likely than “being born into privilege.” In sum, the wealthy agree, people worth multiple millions rate as determined and smart, able and bold.
But ruthless? Nah.
So how would these wealthy characterize Elon Musk’s behavior in the early months of the Covid pandemic? In those deadly days, a Guardian analysis points out, Musk “dared authorities to arrest him for restarting production at Tesla’s northern California car plant, in defiance of the local shelter-in-place order.”
Earlier that first pandemic spring, notes Niraj Chokshi of the New York Times, everything had “seemed to be going Elon Musk’s way.” His “upstart electric car company” had suddenly become “worth more than General Motors, Ford Motor, and Fiat Chrysler combined,” and Musk’s California factory stood “poised to accelerate production of a highly anticipated new sport utility vehicle, the Model Y.”
A prolonged closure of Tesla’s Fremont plant in California would have endangered that Model Y rollout. Could Musk have chosen to endanger worker lives instead? Many workers at the plant certainly felt endangered.
“This is a life-and-death situation,” one of those workers would tell SF Weekly at the time. “You’re basically just breathing on each other.”
Another worker told Electrek, a news website devoted to electrical transport, that Tesla had pandemic-time employees working “on top of each other, touching the same equipment.”
Was Musk behaving ruthlessly here or just leveraging his own personal “unfair advantages”?
And was Musk ruthless or just leveraging the year before, in pre-pandemic times, when Tesla was incurring more fines for workplace safety violations, as Forbes reported, “than its rivals’ main U.S. auto plants in the past half decade”?
We can’t trace all of the Musk fortune, of course, to ruthlessness — or any other unsavory personal behavior Musk may have engaged in over the years. Why can’t we? Musk has had plenty of helping hands on his way to grand fortune, and many of those hands have belonged to lawmakers and other public officials. Over the years, these hands have bestowed upon Musk voluminous varieties of taxpayer-financed subsidies.
The companies Musk runs, the Los Angeles Times has detailed, have benefited royally from “grants, tax breaks, factory construction, discounted loans, and environmental credits,” on top of the tax credits and rebates consumers get for buying his products. These subsidies all reflect “Musk’s strategy of incubating high-risk, high-tech companies with public money.”
“In recent years,” researchers at Grid added this past spring, “Tesla has sold at least $6 billion worth of government-backed electric vehicle credits,” sales that “have twice in recent years made the difference between the company posting a profit instead of a loss.”
Wait a second. Given facts like these, maybe luck does totally explain the fortunes of our most fortunate. Deep pockets like Musk have taken us all to the cleaners — and we let them. You can’t get much luckier than that.
Sam Pizzigati co-edits Inequality.org. His latest books include The Case for a Maximum Wage and The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Twitter: @Too_Much_Online.