by: Brian McKay
Lately, I have been contemplating some concepts of randomness and variability and their impact to success and freedom. Maybe we have framed them all wrong for the whole human existence?
Allow me to explain:
Most of our lives are not our own. A confluence of events, genetics and subconscious responses exert tremendous control over our lives. My general guess is that we might control only 10% of our existence with a possible few percentage points up for grab in the right circumstances. The success of a billionaire is mostly due to luck. But his and your chance at success is increased when given access to those small, additional percentages of chance that are up for grabs.
Jeb Bush stated on the campaign trail, earlier this year, that with hard work, anyone can be successful. He encouraged people to take a second or third job in order to accomplish this. In fact, this has frequently been framed as one of the cornerstones of the “American Dream”.
It is simply incorrect and small minded.
Most of the billionaires and rock stars CEO’s are nothing but lucky. In fact, the so called, rock star CEO is paid millions of dollars for being subject to randomness. Much of the company’s performance is simply out of his or her control. They have the most control in whether they destroy a company and reduce costs by reducing employees, not in letting the company flourish. The trend towards short term CEO performance over the last few decades means that even if the CEO is subject to a few years of randomness not in his favor, he has to show results. So why not cut costs as much as possible now at the expense of the future later? How would you like to get paid millions just to be lucky?
So, success is mostly luck through randomness and most success quotes are pure junk? What is freedom? It is a reduction in variability.
The impact of variability is that it always provides worse results the more variability is increased. What is a traffic jam? It is simply an increase in variability that stacks up upon itself. It is only alleviated when the amount of traffic on the road declines and variability is reduced.
Believe it or not, your bank doesn’t really want you to open a savings account in order to foster savings. They want average customers to have a savings account as additional accounts increase variability and the likelihood of you incurring fees.
Variability also effects the financialization of America. As regulation has actually decreased and more and more financial schemes and tools have been introduced, the frequency of boom and bust periods will continue to increase and impact becomes more pronounced. Most Wall Street professionals don’t even understand what they do or its impact. Basically, you the average, working person are going to get screwed more and more by people with no clue.
The very nature of the social contract that you signed the minute you were born, was a reduction in variability. Your implicit baby signature basically joined you to a big team with the slogan, “Hang with us and far fewer people will be cruising around with clubs and guns and trying to take your shit.” Any further reduction achieved by society in the things that threaten your existence, allows for more freedom as you have more opportunity to explore the you within and counteract subconscious incentives. Creativity is driven and internal peace is created. A freer and more creative world is the result of people not fretting the variation created when basic needs are a struggle.
Studies show that we experience the equivalent of a 10-point decline in IQ when faced with conditions of poverty and uncertainty. I might argue that this becomes an even deeper decline based on societal and economic conditions. Freedom requires intelligent introspection. I believe that this is much the reason that despotic regimes come to power in impoverished countries. Authoritarianism comes as people will gravitate toward anything that seems to offer lower variability, but the overreaction actually constrains them and now introduces the variability of fear. Would Nazism have existed in a Germany that wasn’t impoverished and experiencing the variability of massive inflation? While other societal factors were certainly involved, there is chance it wouldn’t have.
Would Castro have continued to rule had the United States not kept a Cuban embargo in place, which fostered poverty and variability in the lives of Cubans? A case can be made that the embargo never should have existed to begin with if we wished to see a democratic revolution in Cuba.
The most disconcerting thing to me is that as we increase disparity and variability in the United States, we are reducing freedom, chances for success and marching toward an outcome that is the opposite of what Social Darwinism purports to achieve.
Currently, it is more important who you are born to in the US than just about any other factor. Other countries have substantially surpassed us in social mobility by reducing the variability of survival in the lives of their citizens. The United States is now ranked 17th. If your goal is to move from poverty into the middle class; Switzerland is the best place to do so.
Is there hope for us? Absolutely. The Millennials are nothing like the way older generations want to perceive them. This generation has grown up faced with widening disparity, a major economic event, wars, decreasing wages, increasing health care costs, massive student debt, global warming and a lack of employment opportunities. The days of getting a good job and providing well for themselves are over.
Essentially, Millennials understand the increases in variability and randomness we now see, as they have been so impacted by it, and that it has completely fucked (there is no better word available) their whole generation.
This is the generation I believe in. They eschew possessions for experiences, save more and don’t trust Wall Street. There is no doubt in my mind that they view the world in way that is superior to prior generations and will usher in great social change. I think it is coming soon.
They know that they have the ability to learn how they are inside themselves, preempt subconscious responses from 50,000 years ago that haven’t evolved to handle complexity and simplify their lives. And that is the start of taking true control in our lives.
Millennials will demand a reduction to variability and a chance to know themselves in new ways. In short, they will be the ones that take back those crucial additional percentage points from randomness and variability.
Brian has his B.A. from Gonzaga University (Go Zags!) and an MBA from Boise State University. He has recently been studying randomness and variability and is currently wondering how much a role he played in actually deciding to eat the apple in front of him. Will variability effect his beer decision tonight? hmm...