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of success invoke the power of inspirational leaders not because the evidence supports that conclusion, but rather because without such a figure we do not have any intuitive understanding how a large, complex entity functions. Our need to see a company’s success through the lens of a single powerful individual, Khurana explains, is the result of a combination of psychological biases and cultural beliefs—particularly in cultures like the United States, where individual achievement is so celebrated. The media, too, prefers simple, human-centered narratives to abstract explanations based on social, economic, and political forces. Thus we both gravitate to, and are also disproportionately exposed to, explanations that emphasize the influence of special individuals in directing the course of incredibly complex organizations and events.22

Reinforcing this mentality is the peculiar way in which corporate leaders are selected. Unlike regular markets, which are characterized by large numbers of buyers and sellers, publicly visible prices, and a high degree of substitutability, the labor market for CEOs is characterized by a small number of participants, many of whom are already socially or professionally connected, and operates almost entirely out of public scrutiny. The result is something like a self-fulfilling prophecy. Corporate boards, analysts, and the media all believe that only certain key people can make the “right” decisions; thus only a few such people are considered for the job in the first place. This artificial scarcity of candidates in turn empowers the winners to extract enormously generous compensation packages, which are then presented as evidence that “the market” has valued the candidate rather than a small group of like-minded individuals. Finally, the firm is then either successful, in which case obviously the “right” leader was chosen, or it is not successful, in which case the board made a mistake and a new leader is sought out. Sometimes “failed” CEOs walk away with huge severance packages, and it is these instances that tend to get all the attention. In Khurana’s view, however, the outrage that is often expressed over these instances nevertheless perpetuates the mistaken belief that a firm’s performance can be attributed to any one individual—even the CEO—in the first place. If boards were more willing to question the very idea of the irreplaceable CEO, and if searches for CEOs were then opened to a wider pool of candidates, it would be more difficult for candidates to negotiate such extravagant packages at the outset.23

THE INDIVIDUAL AND SOCIETY

Whether we can answer them or not, questions about how to differentiate luck from talent and individual contributions from collective performance can also inform our thinking about fairness and justice in society as a whole. This issue was raised in somewhat different language in a famous argument between the political philosophers Robert Nozick and John Rawls over what constitutes a just society. Nozick was a libertarian who believed that people, in essence, got what they had worked for, and therefore no one was entitled to take it from them, even if that meant putting up with large inequalities in society. Rawls, by contrast, asked what kind of society each of us would choose to live in if we didn’t know beforehand where in the socioeconomic hierarchy we would end up. Rawls reasoned that any rational person would prefer an egalitarian society—one in which the worst off were as well off as possible—over one in which a few people were very rich and many were very poor, because the odds of being one of the very rich was so small.24

Nozick found Rawls’s argument deeply disturbing, in large part because it attributed at least part of what an individual accomplishes to society rather than to his or her own efforts. If an individual cannot keep the output of his talent and hard work, Nozick’s reasoning went, he is effectively being forced to work for someone else against his free will, and therefore does not fully “own” himself. Taxation, it follows, along with