Cronies against capitalism.

FOR economists, the economic success of capitalism creates something of a puzzle. When combined with a relatively small government, capitalism is a well-established ticket to improved standards of living. Yet many countries resist. Why?

A flurry of research has shed new light on the question. The fascinating implication of the latest findings is that preexisting social attitudes toward luck may be the crucial determinant of the political path of a society.

The nearby chart is taken from a widely discussed paper by economists Alberto Alesina, Edward Glaeser, and Bruce Sacerdote. The investigators set out to discover why the U.S. does not have a large welfare state (at least compared with Europe) and uncovered a striking difference between Americans and Europeans. If you ask Americans whether the poor are lazy, 60 percent say yes. If you ask Europeans, only 26 percent say yes.

Consider now a striking pattern that is visible in the chart. The authors found that large welfare states emerge in countries where citizens generally believe that luck determines income. If bad behavior (or laziness) is viewed as a source of poverty, then the welfare state is small. America has avoided the fate of Europe because its citizens disproportionately believe that luck is not that important a determinant of one's ...