I've always thought that you got ahead by hard work, even while I spent most of my life being lazy. I didn't turn in home work or pay attention in high school; I couldn't afford college because I wasn't a protected class (unlike my best friend) and my parents simultaneously made too much money and had too many kids to pay it; and I scraped by as an adult, always being able to declare exempt on my taxes. But I knew that if I had really wanted to, I could have done something. Even the college thing was just an excuse.

Finally, when I was 25 I decided to work really hard. Within a couple years I was able to get a programming job, and a couple years after that I was making 90k. You can say all day long that it's an anecdote, but seriously, the only luck involved is superficial. If it hadn't been those "lucky" events, it would have been some other ones.

I had no connections. I hardly had any friends! My parents didn't help. They wouldn't even let me stay with them while I tried to make something of myself! Hard to say that it's just an anecdote when you lived it.

Finally, whenever this issue of how we measure economic mobility comes up on HN, I object. What is the ideal mobility from the bottom quintile to the top quintile, anyway? Genes matter. Parenting matters. Those two things matter way more than anything government has been shown able to do. It is absolutely possible to imagine a society, one with a lot of interventionist and redistributionist policies, where economic mobility is higher because it is more arbitrary rather than merit-based. How far are we willing to take economic mobility? Parents matter more than schools. Should we redistribute children to different parents?

TL;DR: the way you crack the 1% or 0.01% is not by working hard, but by getting other people to work hard. Which may or may not be hard work. Whatever the case may be, merit has little to do with it; it's all about scarce resources in high demand, which is a metric free of moral values.

But I've watched a lot of people do shit work, and even work hard doing shit work. Working hard may be necessary but it falls far short of sufficient. Those who have merit approach the shit work as a way of looking for problems to fix, as a way of finding what can be done to reduce the level of shit, and so forth. Those who do not just keep shovelling away.

I'd suggest that finding the right connections is often a matter of demonstrating to the right people that you fit in the former category.

There's something to be said for constructive laziness.

One gets ahead by providing things of value that others are willing to pay for. You can work hard at digging a hole and filling it back in again, but since that has no value for others, you won't get ahead no matter how hard you work at that. You can also work very little and get ahead if you are very good at creating things others value.

I.e. hard work is neither necessary nor sufficient in order to get ahead. It's being able to provide something that others value that matters.

While nominally true, this falls apart in the real world. Creating value is great, but if you aren't working hard at it then you will likely be outcompeted by someone who creates similar value per work unit, but works much harder than you. There are caveats and exceptions to this, but one cannot take the statement "hard work is not a necessary condition" to mean anything other than "hard work is a necessary condition" if one is to have any expectation of success.

Actually, the evidence that "working hard helps you get ahead" is not that much. Mostly correlation based on some people that got ahead in other ways (parents, environment, education, connections, chances, etc) but also work hard.

The counter-evidence though is enormous. Hundreds of millions of hard working people never get anywhere.

We just keep in our mind that CEO X that works 16 hours a day doing CEO work is a "hard working man", while we forget the millions pour sods doing real hard labor for the same amount of days...

In both cases the shareholders were harmed. In both cases, the company made a bad hiring decision.

If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption.

Unless you idealize a world in which all employees have equal market power then some employees are going to be able to extract better perks, severance, etc.

Suppose Nokia's chances of survival were 10% without Stephen Elop and 20% with him. That means he is worth 0.1 x value of Nokia if Nokia survives.

If you pay Elop based directly on the performance of Nokia (i.e., he only gets paid if Nokia does well), he'll stay at Microsoft. Why leave MS for an 80% chance of getting paid nothing? Obviously Elop demands some cash up front, a golden parachute, or something of that nature, and a rational board of directors will give it to him.

In 80% of situations like this, the CEO gets paid well for running the company into the ground. But that's a better situation than the alternative, i.e. 90% of similarly situated companies crashing and burning.

With respect, this is complete nonsense. It would only be true if there were no replacement for Elop who could not produce similar returns for a lower cost.

Supply and demand, not intrinsic value.

I realize Elop's pay is set by supply and demand, and if Nokia could find a cheaper person with the same qualities, they would and should hire him.

I'm just pointing out that it is in Nokia's best interest to pay significant amounts of cash comp to a good executive even if that executive "runs the company into the ground".

With many millions of dollars of shareholder wealth at stake, only people with a strong track record should be seriously considered.

Sure there are problems with corporate governance but ultimately we're talking about the risk of misallocating capital belonging to investors, whose job it is to oversee the allocation.

Sooo, it's the job of the board of directors to select who the CEO (an officer in Corporate Law-speak) is.

Personally I think there's a lot of freeloading off the small group of big players that do exercise control. I have a certain amount of faith that they won't vote in a way that's seriously adverse to my interests as a little fish.

(Yes, I'm ignoring the time value of money, risk, etc, to simplify.)

The best you could ever hope to do is "CEO candidates with this kind of background tend to have this kind of record when taking over this kind of company", which I'm sure is quite an illuminating sample.

I really don't get the point you are making. Are you telling me that a struggling company shouldn't try to get what they believe is the best possible CEO, provided his pay package is vastly smaller than the variance in possible outcomes for the company?

You realize that with the narrow exception of a few quant traders, you've pretty much described all business decisions.

The question is why the shareholders put up with it, and I don't have an answer to that question.

I guess many should be sorta happy since it allows untried upstarts to disrupt the market and truly well run companies to expand. I feel sorry for all the people caught up in the fail.

"You want me. If you don't pay me enough, I will go somewhere else that will!"

In other words, as Adam Smith correctly noted, it is a question of who has power in coercive negotiations. Consequently CEO's get paid so much because they are so much more powerful than workers in that negotiation process, not because they are worth that much more.

But a lot of market forces boil down to this sort of power difference analysis. We think of a free market where the consumer has the power and the company does not, but I wonder how often that is really true.

But a lot of this boils down to the reason I think folks should try to be able to be self-employed-- it means you negotiate with companies from a position of greater power. I suspect if 60% of the population was self-employed doing everything from janitorial services through database engineering, we'd have no need of minimum wage laws because anyone anywhere could turn down a job offer.

> We'd have no need of minimum wage laws because anyone anywhere could turn down a job offer.

And right now janitors can't turn down job offers? I don't understand. How does a self-employed janitor have more power? I think you greatly overestimate the advantages of being self-employed, and underestimate the downsides.

Most people esp. in the current economy, are not in a position to turn down a job offer. This means they want work more than the company wants to hire them. This is a major source of a power differential. If, on the other hand, the boundary between employment and self-employment is porous, this means that companies not only have to compete with eachother to hire said janitor, but they also have to compete with the fact that they could hire said janitor's ability to be self-employed.

The point is it is a clear shift.

Right now minimum wage laws are too low. We should at least set them high enough that people have no need of welfare when having a minimum wage job. As it is they are a nice way to tell us we are protecting the worker when in fact we are doing no such thing. When you combine it with welfare, you have solid incentives for low-paid workers not to become self-employed and thus the welfare and minimum wage scheme we have right now are actual tools in the class war by the wealthy against everyone else.

Adam Smith made the same point. Wages are a result of power differential in negotiations, not value to the organization. This is why being able to be self-employed is so important. If you do decide to take a job, you can negotiate from a much greater position of power than if you can't be self-employed.

Isn't it possible for the market itself to be screwed up? There is no such thing as The Market, there are many different markets with different rules and contexts. We can alter these rules and contexts, and they change on their own over time through technology and other things.

The question is whether the market we have right now is serving us well, or if we could alter it to serve us better.

This isn't true. One example off the top of my head, good looking people get paid more. They aren't more qualified, yet they get paid more. Even at the executive level.

Clearly the former is orders of magnitude worse (in every respect) than the latter, no?

> If a CEO has the market power to demand a golden parachute and happens to be paid after she's fired, that's a byproduct of her initial market power, not corruption.

The system need not be corrupt, just broken. In the sense that (I think) we're discussing the merits of modern american capitalism, your comment begs the question.

Wage inequality is not necessarily a sign of corruption.

If you're creating value, you're creating it, it isn't being given to you (nor is it being taken from someone else). For example, if I (as a great painter!) take $5 worth of art supplies and create a painting worth $1,000,000, I have gained a million dollars in wealth without taking it from society.

In a free market, people can and do create great wealth without deleting someone else's wealth.

If so, then yes, we hopelessly disagree.

If not, then you're agreeing that wealth can accumulate to some people who don't create value and/or can fail to accumulate to some people who do. I'd hope you would also agree that that's a problem, and that we'd be better off if we figured out how to fix it?

The latter, sadly, does not inherently hold true; many times people create value but do not manage to get any value for themselves. That situation has improved drastically, but I'd certainly love to see it improved even further.

For the former: ignoring theft and fraud, by definition they created value for someone, or they wouldn't have gotten paid. We can argue over whether we would prefer them to have created value in another way, but we don't get to choose that; that remains between them and whoever chose to give them money.

If you want to improve that situation to create value in ways you'd prefer, then I'd suggest working to ensure that good mechanisms exist to help people get value from activities you'd prefer to see rewarded, and try to get people to take advantage of them. For example, crowdfunding programs like Kickstarter enabled many creative people to benefit directly from the value they create. We could use a hundred more ideas as novel and useful as crowdfunding; that would help greatly.

Or, to put it another way, coming up with such an idea and implementing it would greatly amplify your own ability to create value, and in doing so it would allow you to create the kind of value you'd prefer.