And just like that, $1.3B was gone. In February 2018 Snapchat’s stock price suddenly plummeted 7%. This wasn’t a shareholder report, a new competitor, or a corporate scandal. Instead, the drop was tied to an 88 character tweet by Kylie Jenner: 

"Sooo does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad."

The impact on SNAP underscored the tremendous power that Jenner achieved as an influencer and cemented her place as a force to be reckoned with in the business world. And almost exactly a year later, her name was again also associated with the word “billion”. 

In March 2019, it was announced that Kylie Jenner, then aged 21, reached the $1B mark, dubbing her moniker of the youngest-ever self-made billionaire. There are other, younger billionaires in existence, but these people inherited large portions of their wealth, therefore, excluding them from the ‘self-made’ category. While Kylie of course comes from a famous family, she didn’t benefit from a significant financial inheritance. 

While this standard definition of “self-made” (inherited wealth or non-inherited wealth) is straightforward, it begs a bigger question: What does it actually mean to be self-made? For anyone who attains this level of wealth, should this be seen as a solely personal accomplishment? 

Implicit is the assumption that the wealthy deserve to be wealthy. But do they? And are there downsides to seeing wealth creation in these purely individualistic terms?

The Social Psychology Behind Attributing Behavior

The issue of being self-made cuts into a core area of social psychology: how do we attribute the actions of others?

In everyday life, we naturally and instantly form judgments about the meaning behind the behaviors we witness. Imagine sitting in class on the first day of the semester, when the professor bursts in unkept, sweaty, and panicked; their briefcase full of papers flying everywhere. You may assume from this that the professor is simply irresponsible. He’s the kind of person who would show up unprepared for the first day of class. And you may be right. But it’s also possible that the professor’s behavior isn’t due to something about them. Instead, it might be something about their situation. Maybe, for example, they were sideswiped on the way to work, and they had to sprint to class. 

This divergence in interpretation represents the two general ways in which we come to understand another person’s behavior: either we attribute it to the individual themselves, that it must represent a core, enduring personality trait, or that the behavior is due to the situation. 

Research suggests that we're biased towards dispositional explanations for behavior. That is, we automatically assume someone’s behavior is due to their core, enduring personality, and not due to the situation they’re in. This is known as The Fundamental Attribution Error. 

It's deemed an ‘error’ because the bias to assign a weight to the individual clearly comes at the expense of noticing obvious situational factors. In order to study it, researchers have created a scenario similar to the description of the professor described above. Enter The Quiz Show Game.

A Psychology Experiment on the Fundamental Attribution Error

The setup is simple. Three participants who enter the lab are randomly assigned to one of three roles in the experiment: The Quiz Show Master, the Quiz Show Player, or the Observer. The Quiz Show Master has the fun task - they get to think up the most impossible questions for the Quiz Show Player to try and answer. It’s their job to stump the Quiz Show Player. The Observer simply watches. 

The Quiz Show Master can pick any questions they want - the more difficult the better, things that only they know. For example, the Quiz Show Master might ask what the name of his 1st-grade teacher is, their Mother’s maiden name, or their uncle Jim’s favorite saying. The Quiz Show Player is a total stranger with an impossible task, but it’s nonetheless their job to try and answer correctly. In practice, as we might expect, they guess at random and get just about everything wrong. 

The real experiment isn’t about how good the Quiz Show Player can guess, but rather, how the Observer interprets this scene. After watching this unfold for a good 10 minutes, they’re asked who they think is more intelligent. Reliably, the Observer will state they think the Quiz Show Master is the smarter of the two! When asked, the Observer will respond with statements like, “Well, The Quiz Show Master seems like the confident one; the Quiz Show Player didn’t seem too bright”.

The Quiz Show Player just stumbled and fumbled for the last 10 minutes, desperately guessing at these impossible questions. But what’s shocking is the degree to which people reliably interpreted this to mean that this actually indicates something enduring about their personality. In other words, they completely neglected the obvious contextual factors that influenced the behavior. 

Perhaps unsurprisingly, the Fundamental Attribution Error is seen especially in Western Europe and America. Generally speaking, cross-cultural studies have found that Americans, in particular, are more prone to self-serving biases. We automatically assume that if someone becomes wealthy, it must be a reflection of their core traits, not their circumstance. This is closely connected to how we see the ultra-rich, and how we view their accomplishments.  

On Success, Luck, and Meritocracy: “It’s Better To Be Born Rich Than To Be Born Smart”

Even as income inequality hits all-time highs, there still remains an implicit sense of American meritocracy. As Michael Sandel points out in his book, The Tyranny of Merit, this is a perplexing feature of American culture. Studies reveal that compared to other developed countries, Americans are uniquely zealous in their belief in hard work. We believe that one’s place in life is determined by how much they want it. This fervent belief persists despite the fact that actual upward economic mobility in America is lower than it is in other developed countries. 

This staunch, paradoxical belief in meritocracy directly impacts the way the general public sees the wealthy. NYU Professor Scott Galloway recently made this observation in his book Post Corona, “The difficult thing about a meritocracy—or what we think is a meritocracy—is that we believe billionaires deserve it and that we should idolize them.”

This is also reflected in how rich individuals view themselves and their own accomplishments. It’s all that much more satisfying if you think that you deserved it. In fact, research suggests that people in higher income brackets are much more likely than those with lower incomes to say that individuals get rich primarily because they work hard. Wealthy people also are more likely to attribute their own success to hard work rather than to other circumstantial factors. The Quiz Show Game looks more and more like real life. 

And yet, the data suggests that the best predictors of wealth are the circumstances of one’s birth. Factors like the educational levels of your family, or intergenerational wealth, which by definition, the person has no control over. For example, a 2019 report by George Washington University examined the predictors of educational outcome and career success. The single most important factor was the household income of the child’s family, much more so than the intelligence or intellectual ability of the child themselves. Put simply, the research suggests that it’s better to be born rich than to be born smart. 

The wealth of the previous generation is profound and has long-lasting effects. In a striking demonstration of this, Guglielmo Barone and Sauro Mocetti tracked family wealth in Florence, Italy over several generations. What they found is that a family’s wealth in 2011 could be predicted by the wealth of their ancestors way back in 1427! It pays to be born into a rich family, even 600 years later.    

Psychologist Robert Frank has spent decades studying the psychology of luck and has long noted the uncanny degree to which we neglect these purely circumstantial factors. As he writes in The Atlantic, “When talented, hardworking people in developed countries strike it rich, they tend to ascribe their success to talent and hard work above all else. Most of them are vividly aware of how hard they’ve worked and how talented they are. Yet their day-to-day experience provides few reminders of how fortunate they were not to have been born in, say, war-torn Zimbabwe.” 

All in all, we have a natural tendency to take credit for the situational factors - both big and small, which have made our good fortunes possible.

How Generosity Can Be Influenced By the Role of Luck in Success

Attributing success in this way is not only unfounded, but it also comes with downsides. The first is that this commits you to more general beliefs about society. If people are ultimately in full control of their destinies, fully responsible for their own wealth creation, then any individual who finds themselves in the bottom rungs of society must be there for a simple lack of effort. Why didn’t they just pull themselves up by their bootstraps like these other millionaires? 

Scott Galloway echoes this sentiment, “our idolatry of innovators blinds the winners to the structural advantages and luck they benefited from. And it fools us into thinking we are just a few lucky breaks from joining them. Financially successful people come to believe that someone who is delivering groceries at $14 an hour or cleaning the subway car deserves their economic fate”. Believing in the “self-made man”, also entails the belief in the “self-destructed man”. 

Clearly then, when these beliefs are held by policymakers, this de-motivates any to address structural economic inequality. Secondly, there are personal, selfish reasons for understanding contextual factors, especially for those who are well off. A wealth of empirical evidence suggests that seeing ourselves as completely self-made, and neglecting the role of luck and circumstance, hinders feelings of gratitude for our own good fortunes. 

Research suggests that simply being reminded of the role of luck seems to lead people to feel more gratitude and to act more generously towards others. In one set of experiments, subjects were asked to remember a good thing that had happened to them (such as getting a good grade or meeting someone they admired). One group was instructed to list their personal attributes that contributed to the event, while the other was asked to list situational factors that contributed to it. Afterward, they were thanked for their participation in the experiment by being given a cash prize and were given the opportunity to donate some of it to charity. 

The group that had been prompted to recall the situational factors which lead to their own good fortune donated 25% more to charity than the group that had just reflected on their personal characteristics. Reflecting on the role of luck in our own lives seems to lead us to be more generous to others. 

The philosopher Julian Baggini perfectly distills this idea in the book, How The World Thinks, “There seems little doubt that the Western imagination has too much faith in our capacity to direct and control our own destinies. It is bad faith to deny or even play down the respect to which we are the products of our societies, epochs, families, localities. It is hubris to believe that all that we are, all that we have, and all that we believe is the result of our actions alone. In contrast, when we understand that there is a deep contingency in who we have become, a kind of modesty is fostered.”

Recognizing these situational factors provides us with a fuller picture of our good fortunes. This perspective isn’t just more comprehensive, it’s also good for us.

The Psychology of the Self-Made Man

Acknowledging the role of luck does not necessarily discount the role of hard work and diligence. But as we’ve seen, these latter traits alone aren’t enough. Even the hardest working individuals still owe their successes to luck, for being born into circumstances and situations where hard work can matter. No one can take credit for the fact that they were born at a time and place which could recognize their gifts and abilities.

Even for the most hard-fought, bootstrapped success story, it shouldn’t take long to find something which enabled their success that was completely outside their control. And in turn, something to be grateful for. 

The legendary Cosmologist Carl Sagan recognized this interconnectivity in his own field. He remarked, “if you want to make an apple pie from scratch, you must first create the universe”.

What’s true of “self-made” apple pie may also be true of “self-made” billionaires. 

Photo by Nick Karvounis on Unsplash

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