Success and Luck: Good Fortune and the Myth of Meritocracy Reprint Edition by Robert H. Frank (Princeton University Press)

The basis of the book is that luck plays a role in success. Therefore, if you become successful, you should have a high percentage of your wealth confiscated by the government. The author uses a quote by Elizabeth Warren to make his point. Warren says tax-payers should pay high taxes because they benefit from government spending. Are we really better off from the spending on Iraq and Vietnam? By Warren's logic, parents should be able to confiscate their children's future incomes because the parents gave them life, raised them, and spent a lot of money doing so.

We have $17 trillion government debt and, according to the author, we would all be better off if the government spends even more money. There is no such thing as "enough" when it comes to government spending and taxation. The author offers no evidence that high government spending by countries leads to a higher standard of living and quality of life. The evidence seems to suggest that high government spending around the world is consistent with a stagnant economy. During the next two-three decades we are going to see how painful government spending and entitlements are as the population in western countries ages and entitlements reach unsustainable levels.

I do agree with the author that a consumption tax is better than an income tax. The problem with the income tax is that prevents smart people from reinvesting their money into new businesses. There would be a higher savings and investment rate among rich people with the consumption tax. Unfortunately for the author and his political philosophy, this would lead to the rich becoming richer through less spending and more investment gains.

The author gives too much credit to luck in the success of certain outcomes. Sports analogies are powerful because it is easy to measure winners and losers, so I will give a quick example. Olympic swimming great Michael Phelps went 5 years, 365 days a year, without missing a workout in the pool. Telling him luck played a "major" role undermines the fact he worked as hard as a person could to achieve his results. For Phelps, his success might be 95% hard work and 5% luck. By contrast, an actor, musician, or artist might be successful from 50% talent and 50% luck.

I think it would help the message if the author separated good luck and bad luck. He seems to imply that avoiding bad luck is the same thing as having good luck. The author makes no mention of risk-management or chance. For example, he could have avoided the bad luck of almost drowning while windsurfing by not windsurfing, or doing it under safer conditions. Last week my wife was driving on the freeway and a car tried to change lanes and almost hit her. Did she have good luck because she saw the car and became a defensive driver or did she have bad luck because someone almost hit her? If she had good luck, does she owe someone because of that?