The Matthew effect – why the rich get richer


Have you ever wondered what makes a product or a person successful in today’s interconnected world?

Is it the quality of their work, how hard they work or a big dose of luck?

There are competing theories flying around – but some have been around for longer.

The Matthew effect comes from biblical parables and says “For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken even that which he hath.”

In other words, the rich get richer and the poor get poorer.

This effect doesn’t have to do just with money – although that is one way of measuring it in real life.

It turns out that you see this in a number of situations:

  • The bestseller lists for music and books are dominated by a small number of well-known and rich artists.
  • The most eminent researchers get the credit for a discovery, even if it has been done by a team.
  • Children that learn to read early in life pull away from those that don’t.

There are two factors at play here.

The first effect is the principle of cumulative advantage. Small advantages build up to big ones over time.

An example of this is described in Malcolm Gladwell’s book Outliers, where children that start playing a sport who are older than others in their cohort perform better because they are bigger at the start of the year, and so get more opportunities to play and develop their skills.

People who start a job and are slightly better are more likely to be invited onto a team to do more interesting work, and over time get more experience than others.

The second factor is the network effect. The more connections you have, the more connections you tend to make – and the more connections you have, the more opportunities come your way.

People who have large networks or are already wealthy tend to have more people approaching them with ideas or opportunities.

Publishers pay more attention to authors that already have a large social media following or email list.

Venture capitalists take entrepreneurs that have already been successful more seriously.

Artists that have a large following and existing sales find it easier to get their next album out and into the market because people are already looking out for them.

So what does this mean for us?

The main takeaway is that advantage builds up over time. If you want to get rich, the best time to get started is 10 years ago.

The second best time is now.

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