The social atom

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1. giardiniMar 2018
   Instead of wasting time on a (rather biased) critique, read the original paper:

   "Talent vs Luck: the role of randomness in success and failure" by A. Pluchino. A. E. Biondo, A. Rapisarda

   https://arxiv.org/abs/1802.07068

   Are the rich wealthy because they somehow earned it? Examination reveals that this is not true and that the most extreme cases of wealth accumulation (which show a surprisingly consistent pattern across cultures) are attributable more to luck than to skill. Mark Buchanan examines this in his excellent book "The Social Atom" (pp.172-174):

   https://www.amazon.com/Social-Atom-Cheaters-Neighbor-Usually...

   A reference from that book:

   Jean-Philippe Bouchaud and Marc Mezard, "Wealth Condensation in a simple model of economy":

   https://arxiv.org/abs/cond-mat/0002374

   See also Christopher Jencks, Inequality (New York: Basic Books, 1972) which focuses more on the effect (or non-effect) of education on income:

   https://www.amazon.com/Inequality-Reassessment-Effect-School...

   If extreme wealth is largely due to luck then I see no reason why government should not lop the "lucky" portion off for its purposes. Of course there will always be argument as to precisely where the line is drawn between luck and skill.

   Finally we must not forget bad luck, which makes fools of us all. Just as there are those who are super-wealthy due to luck, there are those whose livelihood has been destroyed by luck. I do feel an obligation to help them back onto their feet.

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2. qubexFeb 2016
   Mathematical economist/game theorist here (applying daily in the role of CEO of family firm founded three generations ago).

   Firstly... and I do not mean this to sound like hurt pride, but... a discipline would need to be quite trivial to be ‘understood’ by cursorily surveying a few online texts. There's a corpus of several centuries of findings, derivations, and unresolved controversies precisely _because_ it is nontrivial. (Side note: the existence of controversies that divide different schools of thought does not mean that everything is in question and that absolutely anything goes because, hey, we can always argue with words by distancing ourselves from observable reality — that makes for religion not science, albeit even the dismal kind.)

   Second: the general idea is that there exists a dynamic, complex system constituted of agents (people, sometimes aggregated into firms and/or nations, being almost always simultaneously consumers of something in need of everything except that which they are suppliers of, be it labour, materials, knowledge, time in the form of lending money, whatever) each doing their best to maximise the enjoyment (utility) of what they have by interacting in a series of ‘markets’, which for the sake of analysis we generally are forced to assume are in ‘equilibrium’ (i.e. We're at the “end of history“ where no external bumps or surprises are leaking into the market and nudging it in any direction) but in truth we know to be in perpetual disequilibrium as information percolates in, surprises happen, and generally guesstimates of everybody involved are shown to right at best on average. An equilibrium price comes to exist where supply and demand cross and we spend many a happy hour calculating that and then trying to figure out how a ‘shocked’ system returns to equilibrium if we jolt it.

   Thirdly: money is (surprisingly enough, for the public which seems to conflate economics and accounting) not necessarily the domain of economics. As a whole the discipline deals with incentives (most usefully and generically regarded as differences in subjective utility) and responses thereto (utility maximising strategies). Money is at best something that serves as a denominator to give everything a common unit and, at worst, an irksome distortion. This is one of those “school of thought” controversies I mentioned above: there are monetarists within the domain of economics and there is the separate domain of finance, somewhere between accounting and economics, and to which ‘risk’ (uncertain future outcomes) is an essential ingredient — and governmental fiscal policy (taxation and public spending)... that's yet another thing.

   For the sake of reading I suggest (no offence intended) Managerial Economics For Dummies, The Origin Of Wealth (Eric Beinhocker), and The Social Atom (Mark Buchanan).

   P.S. On mobile so I've had to edit this a few times... sorry if you caught me in flux but it's great to have a chance to mention stuff that amuses me once in a while.

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