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It turns out that much of what accounts for success in life is not skill or hard work but luck. And in that case, it's not true that rich people are rich because they deserve it or because they
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have skills or worked hard or they're just lucky. And why do we necessarily want to reward luck?
Indeed, can't we think of redistribution as kind of luck insurance? Imagine a world where a random event's going to happen to you.
You get hit by a
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car. We talked about why we want insurance, right?
Want insurance to make sure if we get hit by the car, don't get hit by the car, we're in the same off. Well, same thing.
Rolls talked about behind the veil of ignorance. Imagine before you're born, you don't know if you were rich or poor.
You would choose
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a system which would ensure you against being poor. And that system which would involve transfers.
So if much of success is due to luck, we're going to want a system that shoots the rich to the poor because the rich got lucky, the poor didn't. That's uncertainty we want to ensure against.
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Okay. Fascinating fact.
If you if you interview people around the world and ask them is success mostly due to hard work or to luck. In the US people say hard work.
In Europe people say luck. In Europe they
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have much higher redistribution than we do in the US. because they have a view that much more success comes from luck.