Why Winners Win

Rich Tucker
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Posted: Jul 17, 2009 11:08 AM

Fortune, it is said, favors the bold. And best-selling author Malcolm Gladwell is certainly bold.

In his latest chart-topper, “Outliers,” Gladwell sets out to change our perception of success by showing that we must “appreciate the idea that the values of the world we inhabit and the people we surround ourselves with have a profound effect on who we are.”

Throughout the book, Gladwell does an entertaining job of peeling back the onion. Bill Gates is a success not simply because he’s smart, Gladwell writes, he’s a success because of when and where he was born, because he had access to an early version of a computer. Because companies in his area needed help programming their mainframes. And on and on and on.

Gladwell digs into the lives of successful people and shows how someone’s life can be changed by when they’re born, by what their parents do for a living, even by the culture they’re raised in. But what’s surprising is that he omits the most important factor: The negative effect of government on people’s lives.

For example, he writes about the importance of being born at the “right” time, and shows that hockey and soccer players born early in the year have big advantages. Fair enough. Then he lists the 75 richest people in human history, and adds that almost a fifth come from “a single generation in a single country,” all born in the United States in the 1830s.

These men came of age “when all the rules by which the traditional economy had functioned were broken and remade,” Gladwell writes. And that’s true. But they were also the last generation to come of age when they were allowed to keep all the money they earned. Congress passed an income tax in the 1890s, and an amendment to the Constitution in 1913 made income taxes a permanent feature of the landscape.

As conservatives have long understood, the heavier you tax something, the less you get of it. Our nation decided to tax economic success, so we shouldn’t be surprised that we’ve produced fewer successful people than we once did.

He also writes about the success of Silicon Valley in its early days, noting that computer programming “was a wide-open field in which all participants were judged solely on their talent and their accomplishments.” That was true in 1976, of course, but not as much today. In the late 1990s the government sued Microsoft for antitrust violations, and today’s Silicon Valley companies hire plenty of lobbyists who attempt to use the power of the federal government to swat down other companies.

Gladwell also takes on the American educational system without zeroing in on the true culprits. Summer vacation, he writes, “is considered a permanent and inviolate feature of school life” even though he cites a study showing it harms lower-income children. “The only problem with school, for the kids who aren’t achieving, is that there isn’t enough of it,” he writes.

Well, the Japanese school year runs 243 days. The South Korean school year lasts 220 days. Why can’t the U.S. expand its 180-day school year to match the Asian tigers? Because American schools are run by the government, and the government is swayed by the lobbying efforts of teacher’s unions.

Most parents would love a longer school year; my children certainly get bored in mid-August. But unions exist to limit the amount their members are forced to work, and teacher’s unions would never approve of adding weeks to the school year.

The interesting thing is that the United States is itself an outlier. The book “The Size of Nations” points out that of the 10 richest countries, only one has a large population. The U.S., now with some 300 million people, is miles ahead of Switzerland, the next largest with a mere 7 million. It’s a lot easier for nations (the Soviet Union, the United Kingdom) to break up than for them to remain united and succeed.

In the past our federal government mostly stayed out of the way, allowing the Rockefellers, Carnegies and Gateses to build huge companies and deliver products and services that benefit all of us. But over the decades it’s become more intrusive through higher taxes and regulations. Year by year it’s eroding the traditional advantages of being an American.

“To build a better world we need to replace the patchwork of lucky breaks and arbitrary advantages that today determine success,” Gladwell writes, “with a society that provides opportunities for all.”

Very true, but we’re going in the wrong direction. The government is buying and propping up failing companies, instead of encouraging innovation. It dominates the housing market, the financial market and the insurance market. It aims to annex health care and subject Americans to European-level taxation.

Soon fortune won’t favor the bold, it’ll favor those with the best lobbyists. Maybe that changing landscape should be the topic of Malcolm Gladwell’s next expose.