I said earlier that people in a market economy are rewarded in proportion to others’ willingness to pay. This willingness to pay is the measure of value in a market economy; and therefore to say that a person deserves what he earns is to say that there is at least a rough correspondence between the value of what he produces and the value of what he receives. As Milton Friedman, the high priest of American capitalism, said: “The ethical principle [underlying] the distribution of income in a free market society is, ‘To each according to what he and the instruments he possesses produce.’
This notion of desert rests on the assumption that two distinctions can be made rigorously: first, that a person’s contribution – to any outcome or outcome – can be sharply distinguished from all other contributions; second, that merit can be distinguished from luck, that is, diligence, good judgment, talent, and other productive qualities and character traits are not entirely attributable to biological endowment, to early environment, upbringing and other contingent and therefore morally arbitrary sources. I don’t think these distinctions hold up.
Take this CEO, and suppose we somehow know that she produces thirty or three hundred times more than her average employee. Causality is a transitive relation and production is a kind of causation. If A is a cause of B, and B is a cause of C, then A is a cause of C. If A contributes to the production of B, and B contributes to the production of C, then A contributed to the production of C. Now, who has contributed to the production of our PDG and, therefore, to the production of all that she produces? Obviously, his parents, his spouse, his teachers, his classmates, his predecessors, his colleagues, his rivals and his friends, as well as all their parents, spouses, teachers, classmates, predecessors, colleagues, rivals and friends, as well as all those who created the physical, organizational and cultural resources used in the production of all that our CEO produces, as well as all their relatives, spouses, teachers, classmates, predecessors, colleagues, rivals and friends, and, needless to say, all their parents, spouses, masters, etc. by what is, if one wants to insist on this point, an infinite chain of causes.
I want to emphasize the point. Einstein wrote, “I have always stood on the shoulders of giants. Just like our CEO. Outstanding contributions, whether to art, science, or gross national product, are prepared by all the previous development of the field. People who make brilliant, courageous and illuminating mistakes, which may be essential to the ultimate success of a rich and famous artist, scientist or entrepreneur, are not, in a competitive market system, retrospectively and proportionately rewarded for their contributions, even though Friedman’s definition of justice would seem to require it.
What I mean is that all production is social production. The productive goods of each age are the common product of all previous ages, and all who have been born up to the present are rightfully joint heirs to these goods. And the same arguments in favor of a common rather than individual inheritance of the wealth created in the past apply to the distribution of income in the present. If this seems counterintuitive, it may be because there persists a deep and ancient distinction between luck and merit, that we deserve praise and rewards for our good deeds, but not for our good fortune. . But what if our good deeds are the result of our good fortune?