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Luck of the Draw: Poverty and Success

On the way to school in the town of Valladolid in the Philippines. Some of the unlucky ones.

A few weeks ago, the class of 2012 graduated from university and stepped out into the world.  And one commencement speech, in particular, has been attracting a lot of attention for its candor and unexpected message: that the success of the graduates sitting in the audience is due, in large part, to luck.

Michael Lewis, author of Liar’s Poker and Moneyball, spoke to the graduates of Princeton University and tried to make them recognize just how lucky they are:

People really don’t like to hear success explained away as luck, especially successful people.

As they age and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There’s a reason for this. The world doesn’t want to acknowledge it either.

Don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that you have had success, you have also had luck. And with luck comes obligation. You owe a debt, and not just to your gods. You owe a debt to the unlucky. I make this point because, along with this speech, it’s something that you’re very likely to forget.

This is something I have thought about a lot over the last few years.  In the beginning, I just wanted to learn about something I didn’t know and try to better understand different cultures.  When I began visiting clients of NWTF, the microfinance institution I worked with in the Philippines, I began to see firsthand the degree of socioeconomic disparity between myself and three-quarters of the world.  I saw it again in Ghana when I spent a few days living with a rice farmer in the Eastern Region, and again in the industrial slums near my office in Nairobi.   No electricity, no running water, no steady source of income.  People earn the money in the morning to feed their families at night.  This is living hand-to-mouth, and it is an existence altogether unfamiliar to me.

At first, I felt a sense of obligation, and, to an extent, that sentiment still exists today.  I would like to think that I will make the world a better place in the future (or, at the very least, not make it worse).  And today, more so than I did back then, I feel very, very lucky.  I understand the truth that Michael Lewis conveys in his speech – that only so much of your own success can be attributed to your innate abilities and ambition.  Working hard and being smart certainly help.  But to simplify the formula of success to these two dimensions fails to account for the most critical conditions for even allowing success.

Paramount among these is where you were born.  85% of the world lives in what are considered to be developing countries.   This is a broad category that excludes just about everywhere except North America and Western Europe.  A wide spectrum separates the countries verging on second world and those at the very bottom of the development index, also known as the “least developed countries,” which, by definition, have a per capita GDP of $905. The LDCs are mainly in Sub-Saharan Africa and Southeast and Central Asia.  About 15% of the world’s population lives in LDCs, and 50% of them live in extreme poverty.  If you are born to a poor family in an LDC, the chances of getting out are slim to none.

Within these developing countries, three billion people – or 50% of the population of the planet – live on less than $2.50 a day.  That translates to about $1,000 per year, in PPP (purchasing power parity).  That is not a lot of money.  Sending multiple children to primary school, let alone secondary school and ultimately university, is tough when you are earning that little money.  Between half and two-thirds are subsistence or smallholder farmers, working an acre or two of land, or, if they are lucky, raising pigs, cows, or goats.  For a smart kid in a rural farming community, whose parents may or may not be literate, let alone educated, it takes incredible maturity, drive, and, above all, a stroke of luck to get out of there and do something else.  And that assumes there is even a chance at all, since many children are pulled out of school during planting and harvest to help the family and fall too far behind in school to justify going back.

I could continue, but the point is clear.  The role luck played in my own success became clearer and clearer as time went on.  I came to realize that my own talents and ambition were really secondary when compared to the circumstances of my birth and upbringing.  If there is one universal truth about less developed countries, it is that most people would move to the United States in a second.  People may not believe it here in the States, but, to the rest of the world, it is still a place of promise and opportunity where fortunes can be made and a new life created.  The fact that I was born here and can re-enter this country through the “Citizens” line at customs is something for which I am grateful.

Preparation for citizenship.

I am grateful that my parents value education and pushed me to work hard in school.  I’m grateful for the fact that we had money and I didn’t have to struggle growing up.  I am grateful that I had mentors, and that I grew up in a town so uncool that temptation toward potentially derailing vices weren’t even really an option.  All of these factors were beyond my control.  I was simply lucky enough to have them, and took it from there.

In an interview with PBS, Lewis explains what he was thinking when he wrote this speech:

I would say that, look, that the successful in our society owe so much of their success to things outside of themselves. They owe it to the society, that they’re born into this affluent and peaceful society that was not of their making, that they should acknowledge that obligation.

I think that is right on. Recognizing that fact and internalizing it is important.  Within the United States, there is an increasingly troubling income gap.  The disparity of wealth in this country is growing, and there is little recognition of the conditions that allowed it to grow.  In his speech, Lewis focuses on this point, so I will not.  But try to remember it when thinking about Obama’s decision to grant amnesty to the children of illegal immigrants, or the decision to extend unemployment benefits, or efforts to raise education standards in low-income communities, or any other effort to aid the unlucky.

But I would take a step even further back and say that, if you are reading this from an address in the United States right now, count yourself as one of the lucky ones.  Recognizing this fact, and appreciating it, has led me to the realization that some things simply are the way they are, and that is OK.  But, like Michael Lewis says, the realization brings a sense of humility, and an obligation to, at the very least, recognize the role that luck plays not only in my own life, but in the lives of others less fortunate than me.

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