SELF-ATTRIBUTION FALLACY; FAMILIAR?

Apologies to anyone who considers I am hogging this forum....
THIS IS A MUST (from Debates-list)!


The Self-Attribution Fallacy
November 7, 2011
Intelligence? Talent? No, the ultra-rich got to where they are through luck and brutality.
By George Monbiot. Published in the Guardian 8th November 2011
If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren’t responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.

The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves(1). He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers, across eight years. He found that the consistency of their performance was zero. “The results resembled what you would expect from a dice-rolling contest, not a game of skill.” Those who received the biggest bonuses had simply got lucky.

Such results have been widely replicated. They show that traders and fund managers across Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out they blanked him. “The illusion of skill … is deeply ingrained in their culture.”(2)

So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgement, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?

In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses(3). They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses’s scores either matched or exceeded those of the patients. In fact on these criteria they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.

The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.

In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded(4). Reading their work, it seems to me that if you have psychopathic tendencies and are born to a poor family you’re likely to go to prison. If you have psychopathic tendencies and are born to a rich family you’re likely to go to business school.

This is not to suggest that all executives are psychopaths. It is to suggest that the economy has been rewarding the wrong skills. As the bosses have shaken off the trade unions and captured both regulators and tax authorities, the distinction between the productive and rentier upper classes has broken down. CEOs now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they’ve captured than oil sheikhs.

The rest of us are invited, by governments and by fawning interviews in the press, to subscribe to their myth of election: the belief that they are the chosen ones, possessed of superhuman talents. The very rich are often described as wealth creators. But they have preyed upon the earth’s natural wealth and their workers’ labour and creativity, impoverishing both people and planet. Now they have almost bankrupted us. The wealth creators of neoliberal mythology are some of the most effective wealth destroyers the world has ever seen.

What has happened over the past 30 years is the capture of the world’s common treasury by a handful of people, assisted by neoliberal policies which were first imposed on rich nations by Thatcher and Reagan. I am now going to bombard you with figures. I’m sorry about that, but these numbers need to be tattoed on our minds. Between 1947 and 1979, productivity in the US rose by 119%, while the income of the bottom fifth of the population rose by 122%. But between 1979 and 2009, productivity rose by 80% , while the income of the bottom fifth fell by 4%(5). In roughly the same period, the income of the top 1% rose by 270%(6).

In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%(7). The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009(.
In his book The Haves and the Have Nots, Branko Milanovic tries to discover who was the richest person who has ever lived(9). Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots’ labour a rich man could buy. It appears that the richest man to have lived in the past 2000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him 14 times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.

Until recently, we were mesmerised by the bosses’ self-attribution. Their acolytes, in academia, the media, think tanks and government, created an extensive infrastructure of junk economics and flattery to justify their seizure of other people’s wealth. So immersed in this nonsense did we become that we seldom challenged its veracity.

This is now changing. On Sunday evening I witnessed a remarkable thing: a debate on the steps of St Paul’s Cathedral between Stuart Fraser, chairman of the Corporation of the City of London, another official from the Corporation, the turbulent priest Father William Taylor, John Christensen of the Tax Justice Network and the people of Occupy London(10). It had something of the flavour of the Putney debates of 1647. For the first time in decades – and all credit to the Corporation officials for turning up – financial power was obliged to answer directly to the people.

It felt like history being made. The undeserving rich are now in the frame, and the rest of us want our money back.
www.monbiot.com
References:
1. www.guardian.co.uk/science/2011/oct/30/d...ive-illusion-extract
2. www.guardian.co.uk/science/2011/oct/30/d...ive-illusion-extract
3. Belinda Jane Board and Katarina Fritzon, March 2005. Disordered Personalities at Work.
Psychology, Crime & Law, Vol. 11(1), pp. 17-32. DOI: 10.1080/10683160310001634304
4. Paul Babiak and Robert Hare, 2007. Sankes in Suits: when psychopaths go to work. Harper, London.
5. www.nytimes.com/imagepages/2011/09/04/op...04reich-graphic.html
6. The graph here shows the average income of the top 1% rising from just over $400,000 in 1980 to $1,138,000 in 2008, measured in 2008 dollars. The income of the bottom 90% flatlined during the same period. motherjones.com/mojo/2011/10/one-percent-income-inequality-OWS
7. www.poverty.org.uk/09/index.shtml
8. www.poverty.org.uk/09/index.shtml
9. Branko Milanovic, 2011. The Haves and the Have-Nots: a brief and idiosyncratic history of global inequality. Basic Books, New York.
10. The debate was organised by Reclaim the City: www.reclaimthecity.org/

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So not everybody who busts their arses for a lifetime ends up rich. Tell us something we don't already know.

I read an article on Vavi pretty much mirroring the sentiments in the opening post by Umlilo and then complaining about lack of service delivery. Delivery of any service comes out of productivity. Unfortunately unproductive labour often hides under the guise of the labour federations decent work rhetoric. Result, is business is lumped with single skill labour who will not perform over and above there appointed duties which in turn creates silos in the organisation. Businesses who operate in silos are generally inefficient. Just phone any bank and ask the operator a question and you will see what I am talking about. No cross skilling, no product knowledge, no desire to achieve. Amoeba for life is just fine as long as the pay is in at month end.

The lack of productivity is killing business and the economy of SA and its not about hiring and firing at will, its about carrying unproductive elements in the work force. The State is the benevolent benefactor why should business be that?

There is a vicious circle of sorts here. Doing more work for the same pay goes against the grain in most people, especially when the pay is perceived to be poor (and hardly anybody on earth thinks they earn "enough" - whatever that means). On the other hand, paying unproductive people more than necessary also goes against the grain of most employers, especially if the employees' past record doesn't suggest that there is likely to be any improvement in their productivity.. It's not disimilar to a shopping scenario - would you pay R100 at one store when you can get the same thing for R80 in another shop next door?

I have no idea what the answer is, but this usual slating off at those who have "made it" doesn't achieve anything. Every quasi-communist or marxist system or government ever put in place has failed miserably within decades, despite frequently being enforced at the end of a gun. The idea that life should somehow be "fair" is a myth, because it goes against human nature.

Kumba Iron's Envision scheme has got it right. Everyone below management level including the tea lady will receive a healthy bonus after 40% marginal tax of +/- R345,000.

According to media reports productivity is at an all time high. Everyone is succeeding through the incentivised performance program and increased productivity. Hardly slave labour and exploitation.

Get the full story here www.kumba.co.za/news_article.php?articleID=1128

unfortunately greed and competitiveness is part of human nature. That is why we have progressed (or mis-progressed whichever way you look at it) to where we are.