Few people are as good at framing ideas as Rory Sutherland. In a talk he gave at the SprintAd-dagen in March of 2019, Rory opened up with the following thoughts on the role of luck and experimentation under capitalism:
“You’ve got to leave enough money free and you got to enough eccentric things to give yourself the change to be lucky…
One of the reasons that a lot of people don’t like capitalism is that some of the people who do very well under capitalism are actually total idiots. They happen to stumble into a business at exactly the right industry at the right time. They got lucky.
And even spectacularly intelligent people, I think we can argue…I don’t think there is any argument that Gates and Jobs are hugely intelligent….they were both spectacularly lucky as well as being hugely intelligent…partly by accident of their birth.
If you notice, a lot of those people, Ellison, Gates, Jobs – the giants of the tech industry – were all born within about 18 months of each other. And there was a tiny moment where you had to be young to make it in tech. Five years earlier and they would have ended up working for IBM. Five years later and it would have been to late.
One of the important things about capitalism, interestingly, is that it is a mechanism for rewarding people simply for being lucky. And the strangest thing about that is that it is precisely that, that makes people so angry about capitalism.
But if you don’t have a mechanism that rewards luck, the majority of great discovery don’t get banked.
If you look at the history of science, there is probably as much you can attribute to lucky accidents… Penicillin, Viagra, for example…the two wonder drugs. Those were both a product of completely lucky accidents.
The discovery of vaccination was just one man that happened notice that milk maids didn’t get smallpox. It’s just those tiny things that can have huge effects and we need to leave enough space to actually be lucky.
And the very strength of capitalism is precisely that it rewards ideas that at first make no sense.“
Rory’s full talk at SprintAd-dagen
More on How to Value Stuff
- 10 Ways to Profit by being Less Logical than Anybody Else from Rory Sutherland.
- Drowning in Data. Does more data lead to better decisions?
- The Entrepreneur vs The Investor. How Peter Thiel thinks about those two roles.