Increasing Our Odds

In a recent post Lars Christensen highlighted one of his favorite books (by Milton Friedman), "Money Mischief". Lars spoke of the role of luck in monetary policy, which set me to thinking how luck plays out for life in general. He also included an apt quote from Friedman: "Never underestimate the role of luck in the fate of individuals and nations." While some among my friends don't believe luck is even a truly relevant factor, I always have. What's more, my belief in luck allows me not to be so hard on myself whenever my own efforts fall short of my goals. Of course, don't get me wrong, luck is not about any inherent disposition to be "lazy"... there's a "happy medium" to be had in any approach! What's more, when nothing seems to "work", it helps to look around and try to determine why.

There are the efforts we take on in hopes of success...and then, the factor of whether or not our own efforts might actually match up with what others strive to achieve. In monetary policy - as in life of course - it's complicated. But that doesn't mean there aren't still plenty of ways to increase the odds of success. Which is especially important, given the fact that too many of society's collective efforts in recent decades have decreased the chances of luck or success somewhat, in a aggregate sense. How so?

Think of good fortune as a series of intersections between what we do and what others do. Oftentimes, in an effort to strengthen the relative position of groups, those economic connecting points or intersections are not only diminished but they get pushed out further, so that not as many are able to reach them. Which also means the overall odds of success have just been decreased, as well. Just the same, those who stand at the intersections may not recognize the elements of societal good fortune which make the "locations" they stand on feasible. The previous efforts that now make only limited success possible, may be taken for granted as still "workable" for everyone, when in fact such economic access is no longer the case. A simple way to express this: perhaps the citizens of some nations are more aware of benefits from supply side coordination factors, than our politicians here in the U.S.!

By purposely creating more intersections through which we can find economic access with one another, we are also able to increase our overall "luck" in the process. Often, political factions think of group coordination processes as being too generous for a nation's redistribution benefits, but coordination processes to lessen regulations affecting economic access are far more vital, in that they reduce the  actual space between success and defeat in ways that redistribution simply cannot address. What's more, excessive restrictions in economic access for one's own citizens, only furthers the confusion as to potential economic benefits from allowing more immigrants into a country.

How to think of such intersections? For instance, consider the higher rates of entrepreneurialism by immigrants in general. Part of this can be attributed to their willingness to coordinate greater economic access, for those willing to put out the effort. Immigrants to the U.S. also recognize the value of group settings which can take advantage of physical proximity to one another. This may take the form of utilizing specific geographic areas, in which it is easier for businesses to operate with less overhead and related obstructions to doing business. Whereas, individuals born in  the U.S. may well have the same drive and desire for entrepreneurial goals, but frequently find themselves stuck in areas where the intersections have been "pushed out" by certain entrenched businesses. In turn, many areas of the U.S. now make it more difficult for new start up activity to happen, than had been possible in previous decades.

By no means need we think of such intersections purely in terms of business environment options. Knowledge use at overall societal levels is extremely limited, in terms of coordination and options for viable intersections that make our skills matter. Indeed, knowledge use now can be likened to a (national) fabric that over time has taken on a progressively thinner thread count, thus less stable than before. As a result, the relatively free market we have in product creation, much of which anyone can take part (except for healthcare supplies and equipment), has no counterpoint in knowledge based services. In services, people have not been able to explore the options they actually desire amongst one another, as special interests now fight continuously fought over the limited definitions which the public might gain. This sad set of affairs has also dismantled much economic life at local levels where population densities are low.

It is possible to create many new intersection points in all of our lives: what's more, doing so can only strengthen the fabric of any nation. Not only would greater economic inclusion be possible, but more of us would become "lucky", and hence fall on the plus side of society's balance sheet, rather than the minus side in terms of dependence and lack of hope. It is really important to bring knowledge use outside our institutions now, because they are increasingly hemmed in on all sides by those who wish to limit their definitions and accountability even further. By aligning our interests with one another through new intersections, we gain new means to capture monetary equivalence, as well. What's more, we can do so through the use of free will.

Update: Don Boudreaux, at Café Hayek, highlights someone who would like to "increase our odds" by supplying medical equipment for the poor - I wish the businesspeople luck who are taking on the medical providers that would rather not see it happen!