Home » Michael Lewis 2012 Commencement Speech to Princeton (Full Transcript)

Michael Lewis 2012 Commencement Speech to Princeton (Full Transcript)

This isn’t just false humility. It’s false humility with a point. My case illustrates how success is always rationalized. People really don’t like to hear success explained away as luck, especially successful people. As they age, and succeed, people feel their success was somehow inevitable. They don’t want to acknowledge the role played by accident in their lives. There is a reason for this: the world does not want to acknowledge it either.

I actually wrote a book about this, called “Moneyball.” It was ostensibly about baseball but was in fact about something else. There are poor teams and rich teams in professional baseball, and they spend radically different sums of money on their players. When I wrote my book the richest team, the New York Yankees, was then spending about $120 million on its 25 players. The poorest team was, the Oakland A’s, they were spending about $30 million. And yet the Oakland team was winning more games or as many games as the New York Yankees and more games than all the other richer teams.

This isn’t supposed to happen. In theory, the rich teams should buy the best players and win all the time. But the Oakland team had figured something out that no one else had figured out: the rich teams didn’t really understand who the best baseball players were. The players were misvalued. And the biggest single reason they were misvalued was that the experts did not pay sufficient attention to the role of luck in baseball success. Players got given credit for things they did that depended on the performance of others: pitchers got paid for winning games, hitters got paid for knocking in runners on base. Players got blamed and credited for events totally beyond their control. Where balls that got hit happened to land on the field, for example.

Forget baseball, forget this is even sports. Here you have these corporate employees, is being paid millions of dollars a year. They are doing exactly the same job that people in their business have done for more than a century. In front of millions of people, each of whom think they are expert. They had statistics attached to every move they made on the job. And yet they were misvalued because the wider world was blind to their luck.

ALSO READ:   Martin Luther King on I Have a Dream on August 28, 1963 Full Speech (Transcript)

So I think you have to ask if a professional athlete paid millions of dollars a year can be misvalued, who can’t be? If the supposedly pure meritocracy of professional sports can’t distinguish between lucky and good, who can?

The “Moneyball” story has practical implications. If you use better data, you can find better values; there are always market inefficiencies to exploit, and so on. But to me it has a broader and less practical message: don’t be deceived by life’s outcomes. Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that if you have had success, you have also had luck, and with luck comes obligation. You owe a debt, and not just to your Gods. You owe a debt to the unlucky.

I make this point because, along with this speech, it is something that you’re very likely to forget.

I now live in Berkeley, California. A few years ago, just a few blocks from my home, a pair of researchers in the Cal psychology department staged an experiment. They began by grabbing students, like you to use them as lab rats. Then they broke the students into teams, segregated by sex. Three men, or three women on a team. They then put these teams of three into a room, and arbitrarily assigned one member of the team to be the leader. Then they gave them some complicated moral problem to solve: say what should be done about academic cheating, or how to regulate drinking on campus.

Exactly 30 minutes into the problem-solving the researchers interrupted each group. They entered the room bearing a plate of cookies. Four cookies. The team consisted of three people, but there were these four cookies. Every team member obviously got one cookie, but that left a fourth cookie, just sitting there. It should have been awkward. But it wasn’t. With incredible consistency the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool pulling at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader’s shirt.

ALSO READ:   What's Wrong with TED Talks? Benjamin Bratton (Transcript)

So this leader had performed no special task. He had no special virtue. He’d been chosen at random, 30 minutes earlier. His status was nothing but luck. But it left him with the sense that this cookie – the fourth cookie — should be his.

This experiment helps to explain Wall Street bonuses and CEO pay, and I’m sure lots of other human behavior. This is how people behave when they are blind to their own luck. But it’s also relevant to you – to new graduates of Princeton University. Because in a general sort of way you have been appointed the leader of the group. Your appointment may not be entirely arbitrary. But you must sense right now its arbitrary aspect: you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier. Lucky that you live in the richest society the world has ever seen, in a time when no one actually expects you to sacrifice your interests to anything.

All of you have been faced with the extra cookie. All of you will be faced with many more of them. In time you will find it easy to assume that you deserve the extra cookie. For all I know, you may deserve the extra cookie. But you’ll be happier, and you will be better off, if you at least pretend that you don’t.

Pages: First | ← Previous | 1 |2 | 3 | Next → | Last | Single Page View

Scroll to Top