What Rummy can teach about future career planning

We visited Yercaud for our family vacation. On the second day, we were greeted with incessant rains. Consequently, there was a power cut for the whole day. Without any access to usual distractions like the TV or mobile, we decided to play Rummy using playing cards. 

 

Before starting the game, my father — with his characteristic hubris — proclaimed he is a master and will win. I was rather skeptical of this claim since Rummy is primarily a game about luck. If you are dealt the right cards, you are more likely to win. 

 

Let me quickly explain the rules of the game quickly. Each player is dealt a set number of cards and required to make sets. If each player got 7 cards, they are supposed one set of 3 cards and another set of 4 cards. The set can be a series like 2-3-4 (and -5) of the same suit or the same number repeated multiple times (10 of clubs, spade, heart, and/or diamond). The player quickest to make the series wins the same.

 

We played the first game… and my father won. I thought beginner’s luck.  

The second game…and my father won again. Again lucky but my hypothesis was stretching thin! 

 

The third game…and my father won AGAIN. Okay, clearly I was missing something. 

 

I accepted that there was more than just luck at play. There were five of us. The probability for my father to win purely based on luck was less than 1% (0.8% to be precise). There was something else that made him win. But what helped him win all the games? Fortunately, people inebriated with hubris often reveal their secrets. I noted two factors based on his gameplay and claims that helped him win.

1. Overcoming Sunk Cost 

Some of the games stretched long with none of us were able to complete the series. During one such time, my father said, “You are not willing to change but I have changed my series." He was ready to forego what he had to start something else from scratch. In economics, this is called sunk cost fallacy. Simply put, it means a person is reluctant to abandon their strategy because they have heavily invested in it, even when it is clear that abandonment would be more beneficial. 

 

Let me give you an example to illustrate this. After the cards were dealt, I got 3 & 4 of spade. This meant I needed either 2 or 5 of spade to complete my series. I waited for these cards for the entire duration of the game. The cards were not available in the pile as well. Yet I never changed my strategy despite knowing that I can't complete my series. I hoped against hope that someone will put the card back into the pile. It didn't have happen. Ultimately, I lost the game.

2. Increasing the odds of success 

People often complain that successful people were simply lucky. While it is true that luck is not uniform and some get lucky earlier than others. However, luck or success is also a game of probability. And one needs to learn how to increase the odds of success. The game of rummy is a great example of how to increase the odds of success. 

 

In one of the games, I got Jack and King of clubs. I became excited. I only needed Queen of clubs to complete my series. Further, I saw the Queen of clubs in the open card pile. So, I waited. And waited. It never arrived -- and I lost the game. 

 

Instead, if I had changed my set, I could have fared better. If I had Jack and Queen of clubs, I would have needed either 10 or King of clubs to complete my set. My odds of success would have doubled. Does this mean I would have won? Not necessarily, but my likelihood of winning would have increased. 

Imitating Rummy in Career Planning

 

How does learning the winning strategies in Rummy help with career planning? 

 

In the world of accelerating growth and the advent of technology, there has been creation and churn of careers within a decade. Examples of newer career options like an Instagram Influencer is a full-time career - which is based on an app created only in 2010. Similarly, professions like cashier, travel agent and telly operator are likely to disappear or become almost redundant in future. 

 

But professions that are likely to face reduced demand are not confined to blue-collar jobs. It is believed that even creative professions like digital artists are likely to face stiff competition from artificial intelligence (AI). DALL-E (the newest AI that generates images based on prompts) is able to create some spectacular images based on the weirdest prompts -- so much so that people believe that this is a final death knell to all creative artists around the world. Just last week, an AI-generated picture won an art prize.

 

 

Does this mean creative artists or any other professional should sulk that their hard-earned degrees have no future due to changing technology and the emergence of AI? Not necessarily. I would argue that learning from the game of Rummy holds the key. 

 

First, professionals should accept that the job market of the future will be uncertain and it is likely that their existing skillset might become redundant. If such a situation arises, one should have no sunk cost. They should be ready to pivot to another sector and learn something from scratch. The humility to accept that one needs to start from the beginning is an important step toward a more beneficial and successful career in uncertain times. 

 

Second, position yourself so that you are more likely to succeed. This requires increasing the odds of success. One way could be to identify and focus on acquiring a skill that complements your current skills to make you more likely to succeed. For example, if you are already good at digital artwork, try to study data analytics and combine both skill sets to become a storyteller using data. This helps increase the odds of success. As Scott Adams (of Dilbert fame) said, “ Good + Good = Excellent.”

Winning and losing are part of the game. However, once we overcome sunk costs and identify ways to increase the odds of becoming lucky, we are more likely to win than lose. As for the game of rummy, I did manage to win one of the games by changing my series and increasing the odds of success. I hope you succeed in winning not just in a game of rummy but also in your career.

There is no such thing as a free market

Ha-Joon Chang's 23 Things They Don't Tell You About Capitalism is an engaging, anecdote-filled book that busts myths commonly associated with capitalism. 

 

Tweet book review (50-word review)

It is an engaging, anecdote-filled book that describes 23 statements that free-market supporters don’t tell us about capitalism. No country follows total capitalism. Rich countries are forcing poor countries to practice free-trade that they didn’t adopt during their nascent stage. Hypocrisy!?

Longer review

When I visit India, one of the first things on my checklist is to get a haircut. It costs $30-40 in the US but less than $1 in India. When I told my dad, he remarked, “If it is so expensive, why don’t people migrate to the US and open a hair salon?”

It makes logical sense. In a capitalist economy, one should expect people to take up jobs that are in short supply and reduce the prices. But why doesn't this happen? In the words of Ha-Joon Chang, author of 23 Things They Don’t Tell You About Capitalism, there is no such thing as a free market.

The book lists 23 statements (the author calls them things) that free-market apostles don’t tell us about capitalism. Each chapter starts with a statement that is considered either a feature or consequence of a capitalist economy. It is followed by disputing the statement using data and evidence.

Let me list nine of my favorite chapters and a short explanation for each:

1. There is no such thing as a free market. All countries have some type of government regulation. It could be due to politics (immigration policies), ethics (child labor might be cheaper but immoral), negative externality to society (vehicular pollution affects society), or public goods (public libraries are free and beneficial to society). If there is any regulation, it is not a free market.
2. Most people in rich countries are paid more than they should be. A bus driver in a high-income country is paid 50 times more than a driver in a low-income country. But one can argue that driving in a low-income country requires far superior skill due to poorer roads. Thus, one’s salary is determined not by the skill but by the scarcity of the job. Immigration control (limiting the migrants to a country) and access to technology/ machines allows people in rich countries to be paid more than their counterparts in poor countries. 
3. Free market policies rarely make poor countries rich. Britain from 1720s to the 1850s; the US from 1830s to the 1940s; Japan, Finland, Korea until the 1980s exhibited one common trade policy during their nascent stage. They were protectionist and provided subsidies to build their ‘infant’ manufacturing sector. Now that they have become internationally competitive, they advise developing countries to open their markets and adopt free-trade practices. 
4. We don’t live in a post-industrial age. The developing countries are advised to become service-driven economies to boost growth. However, the services (thanks to immigration and labor policies) is not as exportable as goods. It would lead to lower earnings and slower growth. Instead, developing countries should focus on manufacturing industries. 
5. Africa is not destined for underdevelopment. Several reasons are given for Africa’s underdevelopment. But one reason is often left out - the role of rich countries, the World Bank, and the IMF. They pushed several African countries to open their economy for free trade in the 1970s-80s in exchange for a loan. Many countries were unable to compete with international competition for finished goods while natural resources were extracted at cheap rates. Since these countries lacked strong institutions, this led to corruption, disruptions, and conflicts in the region.
   
6. People in poor countries are more entrepreneurial than people in rich countries. Due to the lack of opportunities in the formal sector, people in low-income countries are pushed into self-employment. However, there is a hard ceiling on how much they can grow a company. A country needs to provide strong institutions like the financial sector (to provide loans/credits), an educational system to supply engineers, government to invest in R&D, and machinery to add value to their products. For example, a person in a poor country can buy some cows and sell milk to their village but a person in a rich country can work in a company that makes packaged butter and supplies it to the whole country. 
7. **More education in itself is not going to make a country richer. This is perhaps the only chapter that surprised me. In 1960, the Philippines had a 20 percent point higher literacy rate than Taiwan. Yet today, Taiwan has twice the per capita income of the Philippines. As the author states, ‘What matters in the determination of national prosperity is not educational levels of individuals but the national ability to organize individuals into enterprises with high productivity.’ Lant Pritchett, a Harvard economist, in his research paper titled, ‘Where has all the education gone’, compares educational levels across countries from 1960-87. He concludes there is very little evidence that increased education leads to higher economic growth. 
8. Big government makes people more open to change. Big government with a well-designed welfare state (unemployment benefits, medical insurance) like Europe encourages people to take more risks and allows for higher social mobility (poor can become rich) without affecting economic growth. Countries should design welfare programs like bankruptcy code: if a business fails, an entrepreneur is given time to pay off their debt. Similarly, if a person quits/is fired from a job, the government should provide welfare benefits until they find another job. 
9. **Good economic policy doesn’t require good economists. This is my favorite chapter. Although the author is an economist himself, he acknowledges that economists are not a necessary condition to design and implement good economic policies. The East Asian economies of Japan, Taiwan, South Korea, Singapore, China in the 1960s onwards were predominantly led by bureaucrats (lawyers, engineers, scientists, military services) yet achieve high growth rates. Does this mean we should abandon economists? Not necessarily, but take their expertise with a pinch of salt. As the joke goes, ‘An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.’
   

There are some flaws in the arguments made in the book. First, the author uses confirmation bias in many instances to prove his points. For example, the author provides examples from Europe to defend the big government. However, in many instances, a big government also comes with complex regulations, clunky implementation, and lower efficiency especially in countries like India, Turkey. Second, the book could have delved deeper into each topic. I understand it is aimed at readers who are just getting introduced to economics and capitalism. But it could be unsatisfying for others who prefer to read in-depth. Third, the book could have categorized 23 things into several components like financial markets, trade, governments, etc. Currently, the chapters jump from one topic to a completely different one.

Despite some shortcomings, the book is an engaging read filled with interesting anecdotes. Its brutal yet honest take on the role of high-income countries in pushing for economic policies that they didn’t adopt earlier is eye-opening. These are silently whispered in universities and multi-lateral organizations yet no significant progress has been made. Unfortunately, economic policies are a product of politics. And both don’t go hand-in-hand always.

I would recommend this book to anyone who has recently developed an interest in economics and wants to enhance their knowledge on fault lines in capitalism. It is a rare bedtime book on economics that won’t put you to sleep, at least not immediately.