By Cliff Montgomery – Mar. 31st, 2012
A very interesting article was published by The London Guardian in November. It bravely – and correctly -pointed out that the wealthy among us are not the super-intelligent financial saviors and job-creators theypretend.
Especially if you’re an American, you’ve heard the propaganda: Magic, invisible ‘market forces’ are absolutelyrational, and that wealth is made by a combination of individual hard work and the possession of a rare, uncanny abilityto interpret the positively rational actions of those invisible ‘market forces’, etc.
But “if wealth was the inevitable result of hard work and enterprise, every woman in Africa would be amillionaire,” the Guardian rightly declared.
The self-promotional claims that the wealthy make about themselves – “that they are possessed of uniqueintelligence or creativity or drive – are examples of the self-attribution fallacy,” continued the British newspaper,adding that, “this means crediting yourself with outcomes for which you weren’t responsible.”
“Many of those who are rich today got there because they were able to capture certain jobs,” stated theGuardian.
“This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of othersand accidents of birth,” the Guardian continued, “as such jobs are taken disproportionately by people born incertain places and into certain classes.”
The writer of the piece, respected U.K. journalist George Monbiot, even offers a simple proof for the averageworker: “Is your boss possessed of judgment, vision and management skills superior to those of anyone else in thefirm,” Monbiot asked, “or did he or she get there through bluff, bullshit and bullying?”
But the Guardian piece doesn’t end there. It also zeroes in on those high-flying financiers whose wild gambleswrecked the world economy.
“The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to thebeliefs that financial high-fliers entertain about themselves,” declared the Guardian.
“For example, he studied the results achieved by 25 wealth advisers across eight years. He found that theconsistency of their performance was zero,” stated the paper.
“The results resembled what you would expect from a dice-rolling contest, not a game of skill,” Monbiot quotesKahneman as saying.
“Those who received the biggest bonuses had simply got lucky,” Monbiot pointed out, adding elsewhere thatthe psychologist “discovered that their apparent success is a cognitive illusion.”
“Such results have been widely replicated,” stated the Guardian piece. Those results “show that traders andfund managers throughout Wall Street receive their massive remuneration for doing no better than would achimpanzee flipping a coin.”
“When Kahneman tried to point this out, they blanked him,” declared the Guardian.
“The illusion of skill…is deeply ingrained in their culture,” Kahneman told the paper.
