Luck Matters

How Recognizing That It Does Can Affect Policy and Our Society

I’m in the middle of reading Walter Isaacson’s remarkable biography of Henry Kissinger, who at 99 has just published yet another book about leadership. As a baby boomer who was very much against the Vietnam War, and Kissinger’s role in prolonging it, I have mixed views of him, to say the least. On the one hand, I admire his genius, his brilliant books and his unmatched ability to put virtually anything and everything into historical perspective. On the other hand, I have always felt that his cold-blooded “balance of power” approach to foreign policy to be too cold blooded. To paraphrase the famous question asked by then Vietnam veteran (and later Senator, Secretary of State and Presidential candidate) John Kerry, “who wants to die for the sake of political stability or order, rather than for some nobler or idealistic reason, like preserving democracy or preventing genocide?” (Kerry’s question was “How do you ask a man to be the last man to die for a mistake?).

But it’s not Kissinger’s realpolitik approach to foreign policy that I discuss here. Instead, I was struck by the story in Isaacson’s book how Kissinger’s life – and who knows, given how important Kissinger became, how the course of history – was potentially changed by a chance encounter he had while serving in the Army during World War II.

After being plucked to train for a job in intelligence, based on his acing of standardized tests given by the Army, Kissinger and almost 3,000 others in his group were suddenly reassigned in 1944 to an infantry division training in the swamps of Louisiana for eventual deployment to Europe. Understandably, Kissinger hated every minute of it.

And then luck intruded. While he was there, another German immigrant who was also serving in the Army came to his base to deliver a spell-binding speech to the troops about why the Americans had to defeat Hitler. That immigrant was Fritz Gustav Anton Kraemer, who had two doctorates from European universities and was working for the League of Nations in Rome in 1939, when the War broke out. After sending his wife and infant son back to Germany – where they were to be trapped for six years – Kraemer left for the US and enlisted in the Army. His superiors discovered that he had a special talent for imitating German officers, and asked him to address the new “intellectuals,” Kissinger among them. Kissinger was so mesmerized by the talk that he penned a short note to Kraemer thereafter, flattering him (a skill Kissinger would finely develop throughout the rest of the life) and asking if he could help him “in any way.”

Kraemer saw the note and sought out Kissinger. They had a 20 minute talk, which proved life-changing for Kissinger, who before he went into the Army had trained to be an accountant at CCNY (the tuition-free school that schooled many future intellectual giants and Nobel prize winners in New York before and after the war). Kraemer recognized Kissinger’s brilliance and his acute understanding of politics and history and told his superiors about him. One thing led to another, and Kissinger was plucked from the infantry to become a translator for a General Boling. Once in Europe, Kissinger demonstrated one act of bravery, which led to his overseeing a German city after the Allies had captured it (at the young age of 22 and with only a Sergeant’s rank). This assignment, in turn, led to a job in counterintelligence, followed by a teaching assignment at a school for military intelligence, where Kissinger displayed all the talents that he would later display in academe and the highest levels of government. But most importantly, that brief interaction with Kraemer led Kissinger to Harvard, to complete his collegiate studies and later his PhD. All of this happened because Kraemer raised Kissinger’s sights and assured him that Harvard was much more suited to his extraordinary talents than finishing up school at CCNY. The rest, as they say is history.

Isaacson blithely states, after telling this story, that “Kissinger would, probably, have found his way out of obscurity even had Kraemer not come along.” (italics mine). But this is sheer speculation. It is equally possible that Kissinger either never would have made it back from the War, or if he did, return to become an accountant, had he never met Kraemer. And even if Kissinger had managed to escape obscurity without coming across Kraemer, it would have been an accident that he would have done it in the way that he did.  

I tell this story because in one important respect, Kissinger’s life, remarkable as it turned out to be, is no different than yours or mine. Everyone in life has chance encounters that are life-altering, some for the good, others for the not so good.

The teacher you were assigned by chance who excited you to take a career path you had never previously considered (true for me). The time and chance that brought you together with your spouse or partner, and vice versa. The same with friends and with the mentors at work, and so on.

Randomness or luck also means life or death. Those who have served in combat in the military, or even in training, know about the bullets that missed them by chance, but struck others down, also by chance. The randomness of being a victim of far too many gun shootings, whether in mass incidents or the isolated events that tragically happen every day in America. The car accidents that routinely but also randomly take away or severely injure far too many people through no fault of their own. The random health misfortunes, or lucky breaks, that influence or can end our lives prematurely.  

Randomness rules even before life itself. The famed (late) philosopher John Rawls argued that the best way to determine the justness of a society is to consider how it treats those “behind of veil of ignorance” who can’t know before they are born what genes or parents they will have, or where they will be born. All outcomes that heavily determine what will happen after we come into this world.

Knowing that these outcomes are matters of chance or luck if viewed from behind the veil of ignorance, what institutions, practices or policies would most people want after they are born?  

For one thing, I have to believe virtually everyone wouldn’t want to be discriminated against based on the color of their skin, or their gender, or what religion they might or might not eventually adopt. Rawls argues, and I agree with him, that most also would want an economic system that protects against worst case outcomes. It’s fine if once you enter the world and make it to adulthood if you have the resources to buy insurance against all kinds of catastrophes that might strike you during your life? But what if you don’t?

This is where governments, or the instruments of collective action, enter the picture. One of the most important functions of government in modern societies that can afford it, apart from keeping law and order to prevent people from injuring or killing others (a job that is carried out imperfectly) and organizing collective defense against enemies from without or within, is to provide various kinds of “social insurance” against multiple kinds of adverse events, such as being thrown out of work involuntarily (unemployment insurance) or health events of all kinds (Medicare, Medicare, and the Affordable Care Act),

Behind the veil of ignorance, most of us, I have to believe, would also want some collective effort to help offset the inequities at birth. Some are members of the “lucky sperm club,” in Warren Buffet’s colorful terminology, and are born into the race of life ahead of the starting line, while others must start well behind it. Not knowing on which side of the line you will fall, wouldn’t you want society to level out at least some of that inequity – for example, by providing extra resources and attention to educating those who are born behind the line at least to get them up to it, and funding these efforts by taxes disproportionately paid by those more fortunate?

Judged by these Rawlsian standards, America has made progress over time, but still has a long way to go (Remember, the preamble to our Constitution says it was written “in order to form a more perfect Union,” not one that already existed). Our social safety net has expanded over the years, but it is still full of holes. Two striking examples: (1) the absence of affordable day care for many women of child-bearing age in states with highly restrictive laws against abortion in the wake of the Supreme Court’s Dobbs decision and (2) our pitifully under-funded Medicaid system for long-term care of the elderly (if you have ever looked at Medicaid facilities for your loved ones, you’ll know exactly what I mean).  And while we have invested in education to provide opportunities for the young to realize their dreams and become productive members of society, large inequalities in the quality of that education remain, by zip code and by socioeconomic makeup of student populations.  

To be clear, despite too many political ads and cable TV commentary to the contrary, social insurance – spreading the risks of bad outcomes across all members of society and evening out differences in the starting positions of people in the race of life – is not socialism, which is government owning firms, or the means of production. We have social insurance because we are still all in this together. We are still one country, though everyone reading this knows it seems to be less and less true. But we’re hanging on, even if barely.  

In the course of writing this post (which I started a couple of weeks ago), I ran across yesterday – again by chance – an article in the Wall Street Journal’s Saturday edition (August 6th) by Roger Lowenstein about one of the most important books in economics written in the fifty years, Equality and Efficiency: The Big Tradeoff, and its author Arthur Okun, also one of the great economists of the last 50 years. (I haven’t provided a link because I think it is paywall protected). It caught my eye not only because I was Okun’s research assistant at Brookings in my early 20s when he started writing that book (before I went to law and graduate school) and was greatly influenced and helped by him, but also because the main theme of his book happens to be highly related to the theme of luck in this column.  

Okun’s main point in Equality and Efficiency is that there is “no free lunch” in pursing policies aimed at evening out the disparities in luck, which contribute to inequalities in life outcomes. Expanding the social safety net, financed by progressive taxation, almost certainly can greatly enhance equality, but also has costs, which Okun analogized to having a “leaky bucket.” Redistributing money to the poor or expanding aid for poor school districts to expand opportunities for those least well off, if financed by higher taxes on upper income individuals for example, can diminish incentives for work and risk-taking, by beneficiaries and payors alike. Those “leaks” may be small relative to overall benefits conferred by the water left in the bucket, but they nonetheless at least should be estimated and considered before filling up the bucket in the first place.

Since Okun’s book was published, recent scholarship suggests that some opportunity-enhancing policies may not actually entail any tradeoff between equality and efficiency. Universal pre-K, for example, not only has elements of redistribution but also, by lifting the educational skills of children before they begin formal schooling, should expand a nation’s total output over the longer run, benefiting everyone, even those whose taxes may go up somewhat to finance these programs.

In any event, Okun argued that a just society that endeavors to level out inequalities due to chance should so by adopting policies entailing the smallest leaks. Protectionist trade policies, for example, are very leaky: they help a relatively small number of workers while imposing substantial costs, in the aggregate, on consumers (in the form of higher prices) and firms and workers in other industries that depend on imported raw materials or parts, whose fortunes suffer when those input costs go up. By the same token, however, freer trade should be paired with better policies for compensating workers who suffer wage erosion or job loss as a result,. For example, rather than simply extending unemployment insurance, providing “wage insurance” that cushions the economic blow of losing a job while encouraging those that do suffer this misfortune (for any reason, not just related to trade) to return to the workforce more quickly, even if they suffer some wage loss in doing so.   

Historically, one of the big differences between members of our two political parties is that Democrats generally are willing to tolerate larger “leaks” in the buckets of policies aimed at levelling the role of luck than are Republicans (think of Ronald Reagan’s attacks on “welfare queens” evidencing essentially zero tolerance of any leaks).

A major reason for this difference in the tolerance for leakages stems from another difference: about the recognition given to luck versus personal effort in determining life outcomes. Again, admittedly to over-generalize, Democrats tend to assign a larger role for luck than do Republicans, who tend to believe outcomes are determined primarily or even exclusively by one’s own effort and perseverance, or what University of Pennsylvania psychologist Angela Duckworth calls “grit.” I, too, believe that personal agency matters, but also believe character traits such as grit have an element of luck to them as well. Other things being equal, you’re more likely to be determined to be successful if you are raised by a family drilling the importance of hard work into you or to be around role models of successful, driven people than if you are raised in other environments. Who knows, there may also some genetic component to grit, too. Both these environmental and genetic factors you wouldn’t know behind Rawl’s veil of ignorance.

My plea to readers is to stop and think about the many ways in which luck or chance has influenced your own lives. Once you honestly do that, then try to put yourself in others’ shoes, especially those less fortunate than you. Then imagine how, but for a few bad breaks, including those from birth, their lives would have turned out better.

One of the sad consequences of our age of intense political polarization is that it’s harder to think like this, and to be empathetic toward the plight of others with whom we strongly disagree politically. Or worse, toward those who we believe are imperiling the future of our country and its democracy, as so many people on both sides of our deep political divide do today. I confess to having this difficulty myself.

But if we are to save our country, not just for ourselves but for our children and their children and future grandchildren, I believe we must try at least to give luck its due. Arthur Okun died suddenly in 1980 at the age of 51, underscoring the fact that luck is not always good. Life (and death) is unfair. But like Okun, I believe that at least some of the unfairness – and the anger that it fuels -- could be diminished if more of us realized the importance luck has played in our own lives and supported policies that attempt to even some of it out, in the most efficient and least leaky way possible.