The Matthew Effect Or Why The Rich Keep Getting Richer
“For whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.” — Matthew 25:29
The Matthew Effect is the phenomenon more commonly known as ‘the rich get richer.” We see it when preeminent people are given disproportionate credit for something they did or even did not do. It explains mistakes in perception from the reasons for income inequality to why we misattribute famous quotations. Andy Warhol’s well-known example is “everyone has fifteen minutes of fame,” which Warhol never said. His photographer did. But Warhol got the credit.
Blame Matthew.
Even history is culpable. We vividly recall the Titanic which killed over 1500 passengers in April 1912, but we hardly remark on the Mont Blanc, the French munitions ship which collided five years later with The Halifax killing 2,000 people on board and leaving more than 9,000 casualties. Why do we only remember the Titanic?
Again, blame Matthew.
“The Matthew Effect” was the name given by sociologist Robert K. Merton to describe what happens when celebrity meets reality. The idea comes from a reputable source — the Bible: “For whoever has will be given more, and they will have an abundance.” As Merton recognized, the scripture wasn’t advocating, just articulating a startling fact of life that fame and wealth accrue more readily to people of acknowledged standing. It may explain why some rise above the status of innovator into an icon that fascinates the general public.
In the “Lord giveth and the Lord taketh away” department, there is, unsurprisingly, a Matthew Effect Corollary: “Whoever does not have, even what they have will be taken from them.” Ouch. But it’s true. When it comes to name recognition, underdogs are soon forgotten and their role is to dominate the second page of a search result. We say George Washington is the father of our country, although a DNA test would reveal many absentee dads.
According to Merton, the psychosocial mechanism underlying this is our memory. Like the U.S. Patent Office, we are constitutionally unable to give credit to two people for the same thing. That would be innovator adultery. People declare that “Alan Turing is the inventor of the computer” because for various reasons he is the most memorable of the many scientists who deserve equal glory.
While Turing did come up with binary string theory (reduce everything to ones and zeros), his 1939 machine was an imaginary one. In 1791, Napoleon’s scientist Gaspard de Prony produced the first precise logarithmic and trigonometric tables. English polymath Charles Babbage built the Difference Engine in 1822 to perform complex mathematical calculations. In 1843, Lady Byron, Ada Lovelace’s mother and a student of Babbage’s, created codes to represent letters and numbers, giving her the distinction of being the first computer programmer. All of these computer innovators compete for the title, but Turing wins the blue ribbon.
The reason why is what I call the principle of “innovator capital,” or our need to invest limited attention resources in a select few who grab the limelight. Sometimes it does not work out the way we hope because our tendency to be risk-averse means putting all our eggs in one basket. Then you find you made the wrong choice. This scenario actually happened in 1997 to a friend of mine who was choosing between two search engine startups for investment. One had a catchy name which he thought would be a plus in the digital “eyeball” business. It was called Ask Jeeves. The other was named “backrub” founded by a strange Russian from Stanford. The following year the company changed its name to Google. When you spend innovator capital you don’t get to look back.
Now, about that income inequality business. Why do the rich get richer? That’s because of the funnel down which fame, wealth, and attention accrue not necessarily to the worthiest but the person, place, or thing with the most innovator capital. It suggests that the Harvard graduate is more likely to succeed than attending community college because it has greater innovator capital. We set expectations and then shockingly find reasons to validate those expectations. So chalk one up for Turing who’s uber-cool over Babbage who sounds like an appetizer on a vegan menu.
Going back to our metaphor, after many rounds of innovator capital are invested in a name, there is little chance of reviewing the bidding any more than the Titanic will cede the right of way to the Mont Blanc or Turing to Babbage or Warhol to his long-forgotten photographer. When those guys get to the top they don’t let go. Hence, the rich get richer.
Blame Matthew.
— Thanks to Robert K. Merton
