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1. It isn't at all the direction the article is going, but there is an argument that the smartest among us do things like swear vows of poverty. Optimising for
by roenxi 2y ago
1. It isn't at all the direction the article is going, but there is an argument that the smartest among us do things like swear vows of poverty. Optimising for wealth isn't all that obvious, especially given that the difference between 10 million and 10 billion is mostly about how you influence society than what outcomes are personally experienced.
2. More on the subject of the article, the simulation is probably good but the conclusions being drawn are not as robust as they might appear. For the sake of argument, lets say that this simulation outcomes align perfectly with reality. That doesn't conclusively demonstrate that wealth is random with respect to people's decisions and abilities. The random events in the simulation might be driven by people's preferences, abilities and habits (hereafter, "skills") which are themselves randomly distributed.
For example, lets say that everyone encounters an opportunity to become a billionaire at a perfectly constant rate of 1 opportunity/year [0] and the probability we can capitalise on it with our skills is normally distributed (ditto for ruinous events). That would be indistinguishable in outcomes from random lucky events that are normally distributed, even though in reality our skills are actually playing a huge role. That is to say: reality can be perfectly aligned with the simulation even if the assumptions of the simulation are different from the realities of reality.
In the real world it is probably a mix of both. There is certainly luck involved in becoming absurdly wealthy, but there is a also an element of skill that shines through in some people who seem to have a miraculous ability to make their own luck. I've met a few of the inverse who it would take much more than luck for them to get wealthy, there are people who fumble their chances.
[0] Picking an absurdly high rate for the sake of argument.
- Dibby053 2y ago>For example, lets say that everyone encounters an opportunity to become a billionaire at a perfectly constant rate of 1 opportunity/year [0] and the probability we can capitalise on it with our skills is normally distributed (ditto for ruinous events) I think your assumption is wrong. The key idea is that the outcome of random lucky events depends on the amount of capital one already has. A lucky event doesn't add to capital, but multiplies it, so consecutive lucky events accumulate creating a long tail. If you believed in Bitcoin in 2012 you probably wouldn't be rich today, if you were living paycheck to paycheck at the time. If by 2012 you already had some spare capital from getting lucky in the dotcom years, on the other hand...
- roenxi 2y agoI'm using a different type of lucky event to the study, but my argument is a statistical one so that difference doesn't worry me. You can substitute different types of events in if you prefer.