April 27, 2021 Reading Time: 5 minutes

I’ve been watching a lot of online chess recently. It has me thinking about the fairness (or injustice) of capitalism: What we earn, what we create, what we individually deserve, and what we think governments ought to do with the profits, gains and wealth that emerge from our work. 

Playing chess online has long been a thing on platforms like chess.com or lichess.org, and learning resources like Chess24 and Chessable – just to name a few. Learning chess has never really been hard, with plenty of clubs, books, courses, online resources, or knowledgeable instructors to learn from. It’s the quintessential ancient game of minds – the philosopher’s game. Beginning with the year 2020, nobody knew what the world had in store, let alone the chess insiders simmering along as they had before. 

Magnus Carlsen, the reigning world champion, earned his grandmaster title at the age of 13 and has been a dominant name in the world of chess for well over a decade. Winning everything that can be won, including the championship in chess’ three main types (classical, rapid, and blitz), Carlsen has now been looking to expand the game through several high-prize tournaments and public outreach (the company he co-founded, Play Magnus, even IPOed on the Norwegian stock exchange in October last year). 

Then the pandemic happened, and everything changed. In the spring of 2020, every chess platform saw its subscriber numbers skyrocket. Playing chess online, while stuck at home, became one of the few hobbies that people could actually engage in. Similarly, with almost all other sports on hold, chess rose to the top of the e-sport world, through a vigorous supply response and following an even greater demand. Its shining online stars – Carlsen and his American nemesis Hikaru Nakamura – overtook many of the high earners in Counterstrike, Dota or Rainbow Six Siege. Games played on most chess sites doubled or tripled in the span of a few months. YouTubers and streamers talking about chess had long had their nerdy clique of followers, but nothing prepared them for the avalanche of hundreds of thousands and millions of new viewers, eagerly lapping up their content. 

In the fall, Netflix released The Queen’s Gambit, its most-viewed miniseries, artistically and captivatingly delivering the wonders of chess to an even wider audience. While fictional, the gameplay element of the series was thoroughly researched, with old grandmasters and chess experts on Netflix’s payroll. The obsession with online chess exploded yet again, with millions of new players, games, viewers, and countless streamers thrown into the spotlight. Tournaments with ever-higher prize money, and sponsorship deals left and right. The world of chess had come alive – so much so that most resellers of chess-related stuff like boards, decorative sets, clocks, and learning material completely sold out for months at a time. 

In any sport, devotion, discipline, or interest, there are always people at the top able to monetize their work: win tournaments, acquire sponsorship, or sell merchandise or learning material. There’s also often another tranche just below that, of people who train or support the professionals, or inform and entertain the wider audience. 

When a sports industry like that suddenly explodes into fame, way above its regular secular growth or decline, lots of people are well-positioned to take advantage of it. Financially, we may say that these people suddenly hold scarce assets and privileged information the value of which rose along with the interest in the field. 

All these people – former players, the elites just below the champions, instructors, event organizers, and facilitators – suddenly get their hard-earned skills, talents, and experiences “upvalued;” the opportunities for them to monetize these assets (through streaming, games, consulting, commentating on live events etc) multiply.  

Everyone in those positions spent decades of their life on this one obscure part of the world, with little prospect of wide-scale recognition or financial gains. They couldn’t possibly have foreseen how valuable their talents would become, and rarely did they go into the game with the lure of mammon lurking at the horizon. 

Sometimes things just happen

Progressives sometimes argue as if the economic and financial world is a stagnant place of predictable gains: capital just earns its steady returns; rich people enrich themselves; higher education just mechanically warrants higher wages. In that mythical world, their claims for redistribution and the rich paying their fair share makes some sense. The rich or the privileged had the opportunity to grab these gains, while the rest of us – through no fault of our own – didn’t. Now, pay up, for cashing in on the privilege that the world gave you. 

The world of finance, globalization, markets, or entrepreneurship is very far from that predictable and stable view. It’s incredibly more dynamic and risky: quite often, things just happen (those black swans we hadn’t foreseen), which shuffles around the returns and the valuation of others’ skills and assets. Malcolm Gladwell has an entire book on how this happens, Outliers: The Story of Success. Bill Gates happened to have the requisite experience, talent, and knowledge when the world suddenly upvalued programming skills; Joe Flom, the New York lawyer in the then-unprestigious field of litigation, became its foremost lawyer through ostracism by the established law firms – until the world suddenly upvalued litigation in the 1970s and 1980s. Lionel Messi, Cristiano Ronaldo, or Zlatan Ibrahimović became as financially successful as they did because their talents bloomed at a time when the world massively upvalued extraordinary football players. 

When football turned from a support-your-local-club to a global billion-dollar industry, plenty of players, agents, support staff, trainers, club managers, and merchandise retailers benefited. They worked to create value along the supply chain that ultimately satisfied fans’ unquenching desire to be part of Liverpool’s fantastic 2018/19 season, Bayern München’s spectacular treble in 2019/20 (winning the Bundesliga, DFB cup, and the Champions League in the same year), or the long dominance of Messi’s Barcelona.

It’s not clear that any one of these thousands and thousands of people deserved their newfound windfall gains: they have extraordinary talent, and sure did put awe-inspiring amounts of work into perfecting it, but they couldn’t have known how richly the future world would reward their toil. Reflecting on Gladwell’s book last year, I wrote

perhaps chance has a little more role [than we usually think]. A lot of success stories are chance occurrences where the world suddenly up-valued the skills you possessed or the services you were supplying. That’s nobody’s hard-earned “gain”; you didn’t work for that to happen; “You didn’t build that!” [The infamous Obama line] 

Nobody controls the outcome of a lottery: it’s the ultimate chance event – yet governments still (unfairly) claim a piece of the pie. When economists are awarded the highest recognition of their work, the Nobel Prize, many tax authorities grab a piece of that too, though the gain is completely unpredictable and inevitably accrues to somebody. Redistributing it on fairness grounds makes no sense. 

Maybe, as the progressive would say, it’s not clear that those suddenly successful deserve their newfound gains, but here’s the thing: it’s even less clear that others do. 

Congrats to all the hard-working chess-producers out there: you deserve every cent you earn – even the ones that governments steal from you. You provide the skills and the commentary and the knowledge that the rest of us suddenly wanted and were willing to pay top dollar for. In any counterfactual world, we’d want somebody’s skills and work and knowledge, in which case they would deserve that wealth. It had to be someone, and it happened to be you. Congrats! 

I wish this wave lasts a long time and that its sudden valuation hype can give us a more sensible conversation about the just rewards of capitalism’s mutual gains.

Joakim Book

Joakim Book

Joakim Book is a writer, researcher and editor on all things money, finance and financial history. He holds a masters degree from the University of Oxford and has been a visiting scholar at the American Institute for Economic Research in 2018 and 2019.

His work has been featured in the Financial Times, FT Alphaville, Neue Zürcher Zeitung, Svenska Dagbladet, Zero Hedge, The Property Chronicle and many other outlets. He is a regular contributor and co-founder of the Swedish liberty site Cospaia.se, and a frequent writer at CapXNotesOnLiberty, and HumanProgress.org.

Get notified of new articles from Joakim Book and AIER.