He didn’t have an undergraduate degree because he dropped out of college to serve in the military during WW2, and then graduated Magna Cum Laude from Harvard Law. Yes, his family connections certainly helped, but it’s hard to say he wasn’t deserving of a place.
Also worth noting that practicing law in the US, even today, does not require an undergraduate. That requirement is purely a result of academia being academia and eagerly wasting 4 years of people's lives for the sake of not finding a better way to filter people.
In most states, to pass the bar, you only need a Juris Doctor which is usually received upon graduating from law school. In some states you don't even need this, and in some others you can skip law school entirely by studying under a judge or practicing attorney[1].
Law, especially in the US, is much more like a trade that accidentally ended up being taught by the universities, instead of a trade school separate from academia. Very similar to medicine in that regard, where again, there is no need for an undergraduate degree to practice medicine.
No need for an undergraduate degree to practice medicine? Well perhaps not but if you look at the list of classes required to enter most medical schools, and the content of the curriculum most anybody is going to be hard pressed to get in, much less get through it without something pretty close to an undergraduate major in biology or chemistry.
You may be right about him “deserving” the place, but you appear to be missing the point here: just by pure statistics, there would have been others who also dropped out of college to serve in WW2, but who did not have an influential father like Munger, and who then did not get the admission he did. Also by pure statistics, there is a likelihood that among these others were many who were at least as deserving as he was.
In summary, the argument is to point out the difference between personal effort/discipline/work ethic/character (and everything that’s commonly named as the “reason” of success) and the huge impact of external conditions that are completely outside the realm of influence of the individual in question, such as their parent’s wealth and influence, physical build, natural attractiveness, health, location of birth, etc.
It is very, VERY common that people uphold and believe in the (comforting) myth that mostly oneself is responsible for success and that said external factors are basically negligible. The “self-made” person… You could even throw them on Mars and they’ll somehow become billionaires and own mansions!
There is not much to add, except that such thinking appears outdated (previous economic booms allowed for a bit more control of one’s fate), ignorant, and self-congratulatory - a delusion of a successful person who is neither aware nor grateful for the external circumstances that allowed them to get where they are.
FWIW I like Charlie Munger, a down-to-earth thinker who doesn’t shy away from talking about inconvenient truths. Chances are he would even agree with the above.
Book recommendation: “Outliers: The Story of Success” by Malcolm Gladwell.
Then how would you say he was not deserving of the place?
OP apparently isn’t talking about the subject’s brilliance or so. I think the OP is talking specifically about the rule bending for the rich.
> … his family connections certainly helped, but …
Put few people with similar background — except the socioeconomic part of their backgrounds in the same situation and see whether they would have made it.
FYI, you have it backwards. The parent said Munger was deserving.
> I doubt it.
Exceptionally bright people exist. Had Munger not gone to HLS immediately or at all, I wouldn't bet against him doing exceptionally well (still top 1% of 1% of business outcomes).
Great advice! I have to say though, I love the irony of the author mentioning reducing investment losses by asking the question "Am I diversifying enough to prevent long term loss?" when Munger+Buffett have the opposite view of diversification for the savvy investor - https://www.youtube.com/watch?v=ZJzu_xItNkY
Assuming the filters do what the article supposes they do, what would be the cheapest and easiest way to test the air quality in my home and workplace?
It seems to me that Apple can offer reduced fees due to the fact that they'll have less fraud as a result of requiring touch/face ID for every purchase.
While interesting, it doesn't come close to solving what I feel is the largest problem with cards in the US today -- interchange fees.
I know this is a MasterCard, but it'd be more interesting if they were able to take out the $0.35 transaction fee on every transaction. This is the bread and butter of every payment processor, and it's complete rent seeking, AND supposedly all the major processors are going to RAISE it at roughly the same time in the coming months.
Eliminating the set transaction fee could open up so many potential businesses. But I'm not sure what incentive Apple has of getting rid of it. It's a cash cow.
Unfortunately I agree with you regarding the lack of incentives Apple has. IIRC, the money for cash back rewards comes out of the interchange fee. How do you get consumers to adopt a card that's opaquely better for businesses and immediately worse for themselves?
If you are looking for a cartel, look no further than experian, transunion et al. Those firms define your credit worthiness and are hacked at will, spilling out all you credit and PII info.
Why is the per-transaction fee the rent-seeking part?
I get why MC/Visa have a per-transaction fee. I don't understand why there's a percentage of the transaction on top of that. It's not any more work for a $1 transaction versus a $1,000,000 one on their end.
The percentage fee is 1, for rewards necessary to get people to use the card and 2, to cover fraud which is actually a MASSIVE problem and 3, to cover defaults/payment issues.
The per-transaction fee existed to cover the additional cost of building out the network (literally running cables and wires to the merchants' stores) and providing card readers. The network is already built and has been paid for THOUSANDS of times over, and at this point it's largely obsolete. I'm also pretty sure merchants need to buy their own card readers now.
Finally, the best estimates for the cost to process a transaction is < $0.01. So that means, they're charging $0.35 for nothing, essentially.
Mastercard/Visa aren't paying the rewards (that's on the issuing bank), they're not doing much fraud protection (again, largely the issuing bank), and they're not responsible for any of the defaults or payment issues (you guessed it, the issuing bank).
The issuing bank sets interest rates (and late/missed payment fees, and penalty rates, etc.) to cover at least the defaults and payment issues part.
Right, but the issuing bank splits the percentage fee with the payment processor. Again, this brings up the point -- with the issuing bank taking care of all that, what is the payment processor doing that realistically costs the other 50% of that percentage fee?
If you look at Visa's margins -- it's pretty clear the answer is: not much.
A cartel is when a few organizations control something of economic value and act as a single entity in the market. For example, the 1973 oil crisis was caused when OPEC proclaimed an oil embargo. OPEC, controlling the oil market, acted as a group to greatly reduce the supply of oil to the United States (and other ally countries) for political purposes.
EDIT:
In this case, payment processing is controlled by a few organizations. They have agreed to raise their prices at the same time, instead of free market style competition for the lowest price. They can do this because very few companies can do payment processing and it is very hard to become a payment processing company.
For those of us who use credit cards with rewards, the rewards significantly exceed the price increases, because most of the price increases are paid by people using other payment methods.
I'm sure interest revenue plays a role in determining the rewards that are offered, but the data suggest that merchant fees, which are largely paid for by non-credit-card-using households in the form of higher prices, are a bigger contributor. The average credit-card-using household receives a net transfer of over $1,000/year from non-credit-card-using households [0] (2010).
The way I see it, every customers who do not pay their card in full or who don't use credit cards subsidize my travels. It's honestly an extremely good deal for me and even if I pay 2.2% of every transactions, it's more than worth it for me.
I never would be able to pay for as many long haul first class flights if I saved 2.2% of the transactions and used that to buy tickets
The rewards are real -- believe me, I take advantage of them too -- but we're paying for them by the inflation caused on consumer goods by everyone using credit cards.
It's true that you pay the inflation regardless of whether you use a card or not, though. And you only get the reward if you do use a card.
The percentage that merchants pay largely goes to the underlying (card-issuing) bank. They take some risk in chargebacks (not all chargebacks go back to the merchant). Additionally, the banks use the fees they collect to pay for their rewards programs.
>Eliminating the set transaction fee could open up so many potential businesses. But I'm not sure what incentive Apple has of getting rid of it. It's a cash cow.
Indeed, why would Apple want to eliminate that fee?
But also, how is this rent seeking? Rent seeking is defined as attempting to take a larger share of existing wealth without increasing total wealth. Electronic payment systems absolutely add to total wealth.
>It seems to me that Apple can offer reduced fees due to the fact that they'll have less fraud as a result of requiring touch/face ID for every purchase.
I don't think that's a big component of it. It's probably has more to do with Apple users being inherently more credit-worthy. If you're well-heeled enough to be neck deep in the Apple ecosystem in the first place, you're probably less likely to be in credit default.
Awesome project, I love the use of TrueSkill Through Time here! Really interesting that it beats out Elo as well.
FiveThirtyEight actually posted their WC predictions earlier today [1]. Finding where the two models diverge is a fun exercise -- they have Morocco as a 40% favorite tomorrow while your model has Iran as a 46% favorite.
It would be interesting to test the model by applying the Kelly Criterion [2] when you have an odds advantage to a fake initial $1000 bankroll and seeing where you end up at the end of the tournament.
If Iran does end up being a 46% favorite tomorrow then that Kelly test will start to look really good, really quickly - the market is only giving Iran a ~25% chance right now!
Thanks! Regarding the Kelly Criterion—that's a great idea, I'll look into it!
I think we were off to a good start after Morocco vs Iran (for which we had significantly different predictions and got it right), but lost quite a bit with Danemark vs Peru (we had Peru as favorite).
This is awesome, I've wanted a tool that shows the HN/Reddit comments on articles for a while now but never got around to making it -- thanks for creating it!
