Estee Lauder, founder of the cosmetics empire, died Saturday at age 97. This morning on NPR, Bob Edwards spoke with a Wall Street Journal reporter purportedly knowledgeable about Lauder and her industry. It is troubling to hear a journalist from so fine a paper display such poor economic thinking. Edwards led with the question: how did Lauder become so successful? The answer, according to the reporter, is that Lauder worked "really hard."

Wrong, wrong, wrong. The labor theory of value was rightfully executed by a noble band of Austrians at the turn of the century, it remains dead, and it will continue to lie cold in its crypt so long as tastes, talents, and luck vary. Estee Lauder was successful because she understood what people valued, and she developed the capability to deliver this value to them in myriad unique ways.

This is the essence of success in a free market -- not hard work. I promise you, the people at Revlon (price = $3/share, earnings negative) worked just as hard as Ms. Lauder and her crew (whose company fetches a price of $44/share, with a P/E of 33), but they worked on the wrong things.

Next, the reporter informed her listeners that Lauder "had good genes," which means that her children have worked hard, too. Oh, dear, the fun someone in the professional victim class could have with that. Suffice to say that the alternative hypothesis -- good upbringing and training -- was not proffered.

Finally, the reporter explained that Lauder was the first to use the "free gift"-with-a-purchase gimmick, which was an enduring contribution to the field of marketing. This was the closest the reporter came to a discussion of Lauder's business tactics -- a minor marketing scheme.

The encouraging element in this sorry report is that it demonstrates that journalists are capable of learning complicated ideas, because in this three-minute report we were treated to the labor theory of value, crude genetic determinism, and marketing as the tail that wags the dog. (This last is a pernicious ailment plaguing business journalists and marketing professionals alike. Reis and Trout, like Ayn Rand, should only be read by people over thirty, who have sufficient wisdom to harvest insights from the fundamentally flawed theories in which they are rooted.)

So we know that journalists can be taught. The question then arises: who is teaching them now?