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But there is a problem with this idea: while wealth distribution follows a power law, the distribution of human skills generally follows a normal distribution that is symmetric about an average value. For example, intelligence, as measured by IQ tests, follows this pattern. Average IQ is 100, but nobody has an IQ of 1,000 or 10,000.
The same is true of effort, as measured by hours worked. Some people work more hours than average and some work less, but nobody works a billion times more hours than anybody else.
The same is true of effort, as measured by hours worked. Some people work more hours than average and some work less, but nobody works a billion times more hours than anybody else.
These two aspects are particularly troubling about the methodology and logic of the argument. The logical argument made is that nobody should naturally have thousands of times more wealth than anyone else because nobody can have an IQ thousands of times higher than average or be thousands of times taller. First, there's no logical link there. Second, where the author faults nobody having an IQ of 10,000, it ignores the fact that an IQ can't even be 10,000, which is why nobody has achieved it. Similarly, nobody can be as tall as a skyscraper because it isn't physically possible. By using as a model the fact that these things don't happen as a guidepost for what should happen in wealth distribution naturally, it seems the author is comparing two things that can't be compared, and attributing the difference to luck.
Bill Gates isn't rich because he was the smartest man in the world, or because he was lucky. He's rich because he built a product that hundreds of millions of people found useful and paid for. The main driver of wealth isn't luck or intelligence (although either isn't going to hurt), the determining factor is market utility of what you do.
I wouldn't write off luck completely here. I don't deny that it is market utility of what you do that determines your success in the market at the end of the day but it is not very much different from saying that your wealth is determined by how much money you have or earn. Essentially, what you say is sort of tautology. Many people try to get that market utility but only few succeed. Huge corporations are spending billions on R&D to get there too. So how is it fundamentally different from the same people trying to become rich and wealthy? You still need luck to hit the jackpot with that elusive utility. You are simply revealing the specific mechanism or route by which luck makes wealth these days.
The market itself decides what has market utility and what doesn't. The fact that everyone tries for the most market utility for their products in pursuit of wealth and not everyone achieves it is proof that the market picks the winners and losers. If you re-read what I wrote, I haven't written off lucky completely, I said it doesn't hurt. But ultimately, market utility of your product and not luck determines the wealth you take from it. Indeed it is NOT very different from saying that your wealth is determined by how much money you have and earn, because that's literally the definition of wealth. I'm just saying that the wealth comes from the market utility of what you as an individual create, not luck.
When Bill Gates built Microsoft, it wasn't luck that he built a tool that everyone just happened to find useful. He built a tool that everyone found useful because he surmised (correctly) that everyone needed it.
