I'm not sure I believe Friedman when he says this, though.
The man who is hard working and thrifty is to be regarded as ‘deserving’; yet these qualities owe much to the genes he was fortunate (or fortunate?) enough to inherit.”
This deterministic idea gives the individual no credit at all for his own hard work and dedication, and implies that twins should be equally hard working and "deserving." Even more insidiously, though, it enables thinking about the unsuccessful in terms of a stereotyped notion of hereditary laziness for those inheriting less fortunate genes. Down that road lies eugenics.
The lucky sperm club notion does have merit, though. Not in terms of abilities but in terms of financial stability and backing, educational opportunities, network connections, access to health care and numerous other intangibles.
I have a different take from Friedman, more along the lines of the ideas expressed in comments to Kwack's article by Charles Broming. Luck - and not of the genetics dice-roll type - plays a huge and generally unrecognized roll in the success or failure of any endeavor. Two identically talented and ambitious entrepreneurs can set up identical businesses on the same day and one might succeed while the other fails due to either completely random factors like the weather, a change in traffic patterns or gentrification, or some other uncontrollable external factor; or due to unequal opportunities like available financing, suitability of location or a variety of other luck-related circumstances.
Two identical baseball pitchers can have widely different results due to the park they play in, the quality of the defense behind them, and the run support given by their own offense. This barely hints at the notion of unequal opportunities.
Beyond that, there is the fact that rewards are not distributed linearly with respect to outcomes. In fact, reward levels can often be quantized. This, from the world of pro golf, is illustrative.
The difference between making it back onto the tour and being demoted to the Nationwide might only be a couple of dozen golf shots over the course of a season, but the financial repercussions are huge. Prize money on the Nationwide is only about 10% of the tour’s. Last year’s top moneymaker on the PGA Tour, Luke Donald, made $6.7 million on the golf course; the top player on the Nationwide Tour made $414,000. Most Nationwide events are not televised, and endorsement deals are one-third as big, if not smaller. If playing on the PGA Tour is like having your product stocked at Wal-Mart, competing on the Nationwide is like selling through a regional supermarket chain.
I firmly believe that a more equal society is, generally speaking, better than a society characterized by stark and growing inequality. Whether this notion is supported by brute economics or not; a humane consideration of quality-of-life issues for the have-nots influences the equitability and stability of society in numerous non-trivial ways.
All of this lends support to my belief in high inheritance taxes and a steeply progressive income tax.