According to wikipedia, a "self-made man" is a person who was born poor or otherwise disadvantaged, but who achieved success thanks to their own hard work and ingenuity rather than because of any inherited fortune, family connections, or other privileges
In his article, he credited the huge influence that his parents had on him. He credits the role that athletics played in his success, and clearly, he was endowed with greater athletic ability than the vast majority. He credits the role that coaches, sponsors and other well-wishers had played in giving him opportunities; opportunities that other less charismatic individuals were likely denied.
Clearly Arnold lived life enjoying some privileges. Was he as privileged than someone like George W Bush or Donald Trump? Definitely not. Was he more privileged than a kid who grew up in a slum, in a broken home? Definitely. And compared to the 1-2 billion people who grew up in a developing nation without access to good schooling/nutrition, he's positively a trust fund baby.
Perhaps it's time we let go of binary classifications such as "self-made" and "privileged". Everyone in the world enjoys certain amounts of privilege, and the precise amount varies on a sliding scale. Whether or not someone is "self-made" can only be determined in comparison to someone else, and never as an absolute fact.
One huge thing the 'self-made' vs. 'privileged' classification misses is pure and simple luck.
Two equally competent candidates apply for the same highly selective position, but one of them gets the job and the other doesn't. Two people try their hand at the stock market, but one person buys in right before a recession, and the other buys right before a boom. You can claim that over a lifetime, luck evens out, but I don't think that's really the case -- there are key junctures in every person's life where luck plays a huge factor in their eventual path.
It's supremely hard to disentangle luck from all the other factors, because for every random factor you can always come up with an ex-post rationalization that gives yourself all the credit ('I built a better rapport with the interviewer', etc.), and successful people I've noticed tend to be unusually good at assigning themselves credit.
A classic paper that looks at how wealth is distributed if every time two people randomly interact, the richer one is slightly more likely to gain money [1]. Everything else about individuals is identical. The rich always get richer.
Despite being a fairly rational person, I have come to believe that there is some wisdom to the phrase "you make your own luck".
The experience is purely anecdotal, but you see it manifest in all walks of life, granted you would expect luck to be streaky or not evenly distributed on the local level, but there seems to be an observable relationship between "lucky outcome" and confidence - think sports, business decisions etc.
If I had to offer an explanation for it, I would go with the fact that our brains are complex machines that have developed heuristics that are better than we realise at predicting outcomes and when we give ourselves to it (through confidence) we end up with outcomes working out positively more often than negatively.
The obvious counter argument would be selection bias - when you're up on your luck and your confidence is high, the losses don't seem to matter so much (and vice versa).
The accidents of birth are luck in a certain sense, but it's probably worth drawing a distinction between the luck of inheriting wealth and the luck of winning it on the slots.
In fact winning in slots is less lucky... You have to play the slots. Having random advantage also takes some capitalising on it, but then, a lot of it is our of your control, especially early in life.
Even winning in slots can be smartly capitalised upon.
Isn't the main thing that if a person derives wealth it's because they created it and took a fair share? My main beef is between people adding real value and people using the system to appropriate value added by others.
I think if we fixed the above most of the inequality of opportunity would melt away. It's the rentiers who are the problem.
That rentier activity could be being a large-scale landlord and extracting labour due to a monopoly on housing. It could be by being a banker and having the state build a system where if you win you win and if you lose everyone else pays (and let you build a system for the landlords). It could be by making an incremental improvement to a technology and then claiming a monopoly via patents over all knowledge since Faraday.
Let the rich kid who became a dentist and works for 50 years fixing people's teeth do his thing. Rentier activity is what is hurting poor people.
The problem is that wealth is socially generated, e.g. when people work in a factory, profit is created because it's more efficient for people to work in a factory than in their own homes. The fair division of that profit is a deeply political question.
One could argue that the workers generated the value, because without them the factory would not run. One could also argue that the owners generated the value, because they paid to have that factory built.
In practice though, all the generated value goes to the party with the most bargaining power, which usually happens to be the owners of capital, because wealth and power beget wealth and power.
Just look at all the rhetoric of the campaign and the right wing -- corporations and the wealthy are 'job creators' and so they deserve all the credit for people having jobs, even though capitalists need labor in order to exist.
> The problem is that wealth is socially generated...
You seem to have missed out society in your answer, having only mentioned the capitalist and the worker.
There's a legal system that helps people trust each other when forming a contract, there's infrastructure like roads, sewers, and schools. There's cultural institutions like marriage, membership of various societies, and so on that enable work to be apportioned in novel ways.
Wasn't that what was meant by "socially generated"? That there's a load of people other than the main characters doing things of value?
The land should be what breaks this loop. Land is required, nobody created the land, it is the common wealth.
If we taxed land we would see living costs suppressed and a return back to the days when we could choose if we wanted to work rather than being a wage slave, forced to work by high rent costs due to land speculation and infinitely elastic fiat money supply. We've seen what happens when we near-double labour supply (women working), bankers extend twice the credit and house prices double, allowing them to cream off the labour of both parents where before women's value was not available for seizure by the bankers.
The current system forces labourers to sell the one thing they have: themselves. And they are bidding into an oversupplied market.
It's a complete disaster that begins at the door of the goverbankment. If we don't have reform the west is going down. We can surely see that from the precipitous drop in real living standards over the past 30 years. Now we have both parents slaving all hours for the banks.
Think of the yawning gap between wages and value produced, which has widened. This is because labour has less power to push back. Traditionally this was unions, but I'd like to see that power distributed to the bottom level: the worker. By being able to refuse to work like a dog and handed back subsistence wages.
We need land value tax to fund universal basic income. Companies need to be forced to hand over most of the value labour adds, so there is an equilibrium. And by forced I don't mean by the state I mean because workers have a choice and won't work for peanuts. Right now the decks are stacked against the worker and banks are extending credit / selling off the country to keep the plates spinning.
Taxing land only works if the distribution of land is equitable, except that value-generating uses of land (factories, cities, and farms) aren't distributed uniformly throughout the country.
If you wanted to make that equitable, then you'd need small slices of land to be uniformly distributed to people, but that becomes more or less equivalent to just redistributing equity in companies. And then you'd have to redistribute the equity from time to time, or else you'd need to prevent people from buying and selling equity. Otherwise, the rich will just buy up all the equity again.
No, taxing land would cause redistribution. If you're sitting on land that suddenly costs you money, you will try to sell it. The guy who buys it will be someone with an idea of how to use it to generate enough wealth to pay the tax.
You build the skyscraper and capture the value you add. You made efficient use of land therefore you win. That's the point.
It's about stopping people doing no work and deriving economic value. It's not about stopping economic progress, nor is it about stopping people retaining the value they add. Quite the opposite.
> Taxing land only works if the distribution of land is equitable
Why? I don't see why land value tax cannot exist within the modern world we have of "capitalism" (it's corpratism right now!). Nor do many, many economists.
Never ever heard anyone say this before. The whole point of LVT is to stop unproductive hoarding and to capture the rentier aspect for the common wealth. Have a read up.
In his article, he credited the huge influence that his parents had on him. He credits the role that athletics played in his success, and clearly, he was endowed with greater athletic ability than the vast majority. He credits the role that coaches, sponsors and other well-wishers had played in giving him opportunities; opportunities that other less charismatic individuals were likely denied.
Clearly Arnold lived life enjoying some privileges. Was he as privileged than someone like George W Bush or Donald Trump? Definitely not. Was he more privileged than a kid who grew up in a slum, in a broken home? Definitely. And compared to the 1-2 billion people who grew up in a developing nation without access to good schooling/nutrition, he's positively a trust fund baby.
Perhaps it's time we let go of binary classifications such as "self-made" and "privileged". Everyone in the world enjoys certain amounts of privilege, and the precise amount varies on a sliding scale. Whether or not someone is "self-made" can only be determined in comparison to someone else, and never as an absolute fact.