Success: all down to the individual?

Few people would deny that being born into a developed capitalist country leaves one with many more opportunities to achieve financial and material success than into a poor country with weak and undeveloped political and economic institutions. Clearly, such success is partly down to individual effort, but also to the larger forces operating in the society in question. The billionaire investor Warren Buffet has said that he could not have made his fortune if he had been born and raised in a poor country, as the opportunities would simply not have been available. So the social, political and economic as well as technological environment matter hugely to individual success.

As another example of how the timeliness of action also matters, even in a developed country, there are more chances to make money in the midst of an economic boom than in a recession. An investor who buys a financial asset at the bottom of a cycle can then potentially ride the wave of price inflation if and when it occurs and benefit accordingly, whether in housing, equities, bonds or whatever. After the event, when a small or large fortune has been made, the individual may then feel rather pleased with herself, and be tempted to draw the conclusion that her intelligence were the cause of this success, rather than her simply being in the right place at the right time. Of course, some individual wisdom may have led her to observe or make an intelligent guess that a low point in the particular financial market had been reached, and that it was a propitious time to buy. This would be a good example of a combination of the individual and the environment combining to produce success on some level. But there must be plenty of financial traders who have made huge fortunes during an asset boom and believing that it was all down to individual intelligence and effort, when in fact the boom was the dominant factor in the success. Conversely, those who make huge losses when a crash comes might believe that they had made some huge blunder when the larger forces of the financial cycle have played a larger role. Inevitably, all success comes down to some combination of individual and environmental forces, with one or the other being the stronger determinant of the outcome, be it successful or not.

Macroeconomic trends can thus overwhelm individual effort. A deep recession leading to mass unemployment may cause many workers to lose their jobs no matter how hard they work or how intelligent they are. There may be some form of ‘sorting’ in that there is an order as to which individuals in an organisation lose their jobs first, but the deeper the recession, the more will skilled workers be laid off alongside the less skilled. More structural or supply side factors also have an effect over the longer term as old industries decline and new ones spring up, such that some skills become redundant and others become more valued over time. Such economic forces on the demand and the supply sides can dominate the efforts of an individual to make progress in life.

This is not to deny that individual effort is important in any society; more that there are favourable and less favourable circumstances and times in a world of ceaseless change. Such larger forces interact with individual action to produce particular outcomes, which can seem good or bad at the time, but which represent simply another step on the path of life and have to be dealt with.

Those on the left of the political spectrum tend to want state intervention to mitigate unfavourable outcomes, for example via a Keynesian economic policy to try to manage the business cycle and secure high levels of employment. As has been illustrated in previous posts, this may not be enough and, from a Marxist perspective, the cycle may be necessary to promote structural change in the economy as it evolves and productivity improves over time, and the overall rate of corporate profitability fluctuates. The welfare state can help those experiencing poverty or unemployment when these could be considered to be at least partly due to social and economic change rather than down to the individual.

Those on the political right are generally less amenable to supporting state intervention, at least in their rhetoric, although in practice governments of all persuasions have intervened on behalf of different actors in society, from the poor to private companies. The right have tended to favour less redistribution through the tax system and less help for the poorest and more help for the economic elite and the richest in society, although again this has not been uniform.

To conclude, achieving the greatest success, at least materially, which cannot be its ultimate measure, requires some combination of individual talent and a favourable environment, which includes timeliness. This combination is not likely to last forever, such that fortune can fluctuate for anyone. Whether such changes are good or bad takes us into the realms of psychology and philosophy, and beyond the nature of this post.

 

 

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