In 1997, Warren Buffett, the famous investor and multi-billionaire, proposed a thought experiment.
“Imagine that it is 24 hours before you are going to be born,” he said, “and a genie comes to you.”
“The genie says you can determine the rules of the society you are about to enter and you can design anything you want. You get to design the social rules, the economic rules, the governmental rules. And those rules are going to prevail for your lifetime and your children’s lifetime and your grandchildren’s lifetime.”
“But there is a catch,” he said.
“You don’t know whether you’re going to be born rich or poor, male or female, infirm or able-bodied, in the United States or Afghanistan. All you know is that you get to take one ball out of a barrel with 5.8 billion balls in it. And that’s you.”
“In other words,” Buffett continues, “you’re going to participate in what I call the Ovarian Lottery. And that is the most important thing that’s ever going to happen to you in your life. It’s going to determine way more than what school you go to, how hard you work, all kinds of things.”
Buffett has long been a proponent for the role of luck in success. In his 2014 Annual Letter, he wrote, “Through dumb luck, [my business partner] Charlie and I were born in the United States, and we are forever grateful for the staggering advantages this accident of birth has given us.”
When explained in this way, it seems hard to deny the importance of luck, randomness, and good fortune in life. And indeed, these factors play a critical role. But let’s consider a second story.