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>"OP made good decisions and worked hard" On a national or even global scale I try to avoid generalizations like this because trivially they don't lead to good

>"OP made good decisions and worked hard" On a national or even global scale I try to avoid generalizations like this because trivially they don't lead to good policy outcomes. It's almost a little like stock picking. If 5/100 hedge funds make a positive return over the year, my first thought isn't "the other 95 refused to work to better themselves". It's easy to understand this with hedge funds, but people commonly make this mistake when talking about human beings. You wouldn't be taken seriously if you said those hedge funds lost money because "they refused to work hard". I feel most people are the same way - I don't think any rational actor refuses to better themselves, rather it is a fallacy we tell ourselves to explain why things the way they are. I've seen plenty of "hard working" people relegated to poverty because their kid got sick. Finally, the best solution is not to focus on individual funds, but on the index. Providing a better baseline for all companies leads to a better overall index and having a strong economy involves having a section of it the "wastes" a lot of money investing in the in the future.

lostcolony 6y ago
Thank you for this analogy. Because...yes. So much yes. Even had this person engaged in crime ('to feed his family!'), but still come out of it on top, we'd be saying "see? Even with those slip ups, he did the right thing most of the time and came out on top", but then we turn around and three strikes, lock someone else up for decades. And we don't know the people who failed, despite doing everything 'right', who died homeless and malnourished.
playingchanges 6y ago
I like your analogy but I’m not sure it’s perfect. In the finance world I don’t think anyone would presume to say more work === more success. There is a talent component that is not perfectly replicable across hedge funds. BUT in real life more work very often does equal more success because so many careers really do not require a high level of ‘talent’.
- nemothekid 6y ago
  Your counter argument seems to imply that people who work in finance don't share the same reality as the rest of us. I think that plays into a fundamental human error; for some reason when looking at individual industries we can see that the people can put in more or less the same amount of effort and get different results, but on a national scale we attribute effort much more highly, to the point we call losers lazy. To be clear I'm not saying there isn't a level of difference in talent or work ethic; what I'm arguing is that viewing the world that way makes for terrible government policy. When someone says something like "welfare makes people lazy", they are making the mistake you are. Somehow the imaginary "real life work" is directly correlated with effort, but actual finance jobs are not.
- lostcolony 6y ago
  Certainly, ingredients such as hard work and talent help make success more likely. There are successful companies and products that don't seem to have a lot of either behind them beyond the initial work to find a successful niche, that they've leveraged to great success. And companies and projects have failed despite having both of those because of circumstances outside of their control. Just like people, companies are products of their environment. Why -doesn't- someone work hard? Or make the right choices? Because either of their environment, what they've learned, or because of who they were born as. Neither of those is under their control. And even if they do, and it doesn't pan out, why didn't it pan out? Again, factors outside of their control.
- andi999 6y ago
  Actually for most funds it is the hindsight component. Your bank sets up 20 funds, and then after two years promotes the ones which performed well.
dionidium 6y ago
This is a good framing for thinking about policy, but if you were talking to an individual company that seemed not to be working hard or executing on their goals, then you would give them all the standard advice about correcting that behavior. This difference between individual advice and group-level policymaking (mentioned elsewhere in this thread by chmod600) accounts for a lot of talking past one another in political debates. They are two totally separate levels of analysis.
nostrademons 6y ago
Judging from the folks I know in the finance industry, they would probably say 'those hedge funds lost money because "they refused to work hard"'. Bloomberg built a massive business off the idea that finance professionals need to be constantly informed about everything that goes on in the markets or else they'll be one of the losers. Perhaps there are some fund managers out there that are just like "Yep, it's a rigged system, I'm going to be the one getting rich off rigging it", but I haven't met one personally yet.

lostcolony 6y ago

Thank you for this analogy. Because...yes. So much yes. Even had this person engaged in crime ('to feed his family!'), but still come out of it on top, we'd be saying "see? Even with those slip ups, he did the right thing most of the time and came out on top", but then we turn around and three strikes, lock someone else up for decades. And we don't know the people who failed, despite doing everything 'right', who died homeless and malnourished.

playingchanges 6y ago

I like your analogy but I’m not sure it’s perfect. In the finance world I don’t think anyone would presume to say more work === more success. There is a talent component that is not perfectly replicable across hedge funds. BUT in real life more work very often does equal more success because so many careers really do not require a high level of ‘talent’.

nemothekid 6y ago
Your counter argument seems to imply that people who work in finance don't share the same reality as the rest of us. I think that plays into a fundamental human error; for some reason when looking at individual industries we can see that the people can put in more or less the same amount of effort and get different results, but on a national scale we attribute effort much more highly, to the point we call losers lazy. To be clear I'm not saying there isn't a level of difference in talent or work ethic; what I'm arguing is that viewing the world that way makes for terrible government policy. When someone says something like "welfare makes people lazy", they are making the mistake you are. Somehow the imaginary "real life work" is directly correlated with effort, but actual finance jobs are not.
lostcolony 6y ago
Certainly, ingredients such as hard work and talent help make success more likely. There are successful companies and products that don't seem to have a lot of either behind them beyond the initial work to find a successful niche, that they've leveraged to great success. And companies and projects have failed despite having both of those because of circumstances outside of their control. Just like people, companies are products of their environment. Why -doesn't- someone work hard? Or make the right choices? Because either of their environment, what they've learned, or because of who they were born as. Neither of those is under their control. And even if they do, and it doesn't pan out, why didn't it pan out? Again, factors outside of their control.
andi999 6y ago
Actually for most funds it is the hindsight component. Your bank sets up 20 funds, and then after two years promotes the ones which performed well.

dionidium 6y ago

This is a good framing for thinking about policy, but if you were talking to an individual company that seemed not to be working hard or executing on their goals, then you would give them all the standard advice about correcting that behavior. This difference between individual advice and group-level policymaking (mentioned elsewhere in this thread by chmod600) accounts for a lot of talking past one another in political debates. They are two totally separate levels of analysis.

nostrademons 6y ago

Judging from the folks I know in the finance industry, they would probably say 'those hedge funds lost money because "they refused to work hard"'. Bloomberg built a massive business off the idea that finance professionals need to be constantly informed about everything that goes on in the markets or else they'll be one of the losers. Perhaps there are some fund managers out there that are just like "Yep, it's a rigged system, I'm going to be the one getting rich off rigging it", but I haven't met one personally yet.