a desirable economy what income does each actor get to enjoy? What is the basis
doubt that many folks reading this commentary think people should be rewarded
due to owning property. This is called profit…and in this case individuals own
means of production and pocket profit based on the output of those means of
production. This leads to someone like Bill Gates having more wealth than the
entire GNP of Norway, or, if you prefer, 475 billionaires together having more
wealth than half the world’s population. Being born rich due to inherited
property doesn’t reward a person for something worthy that he or she has done
nor even provide incentive to do something he or she otherwise might not have
done. There is thus no moral or economic rationale for it other than
aggrandizing the few.
reading this probably also don’t think people should be rewarded based on their
ability to extort a greater share of society’s product due to their power. A
thuggish economic actor – using racism or sexism or a monopoly on some asset -
shouldn’t be able to translate that power into income. Sure, in an economy where
extortion is a norm we wouldn’t want to say that that unions shouldn’t be
allowed to demand and use their power to win higher wages against the power of
owners and others. But in a good economy where everyone is subject to new norms
and not battling for advantage, surely we agree that we wouldn’t want owners or
unions or any other actors to be gaining income based on relative power.
Rewarding power is no more moral ethical or economically efficient than
controversy over what is "Just Reward" arises, if at all, regarding
the possibility of rewarding output. A perfectly sensible and humane person
reading this essay might think, roughly, each economic actor ought to get back a
share of output equal in value to what they themselves produce for the economy.
This has even been the slogan of very radical movements-the Wobblies, for
example. And it seems fair: If you don’t put much into society’s economic
product, you shouldn’t take much out. If you put a lot in, you should take a lot
out. Otherwise, someone else gets value you put in, or you get value someone
else put in, instead of each of getting back only the amount of our own
suppose Sally and Sam are picking oranges. Sally has a good set of tools. Sam
has a crummy old set. They go into the fields for eight hours. They work equally
hard. They endure the same conditions. Sally’s pile when the day is done is
twice as big as Sam’s. Should Sally get twice Sam’s income? If she does, we have
rewarded her luck in having better tools. Is that moral or, efficient?
Sally is very large and strong and Sam is much smaller and weaker. They have the
same tools. They again go into the fields for eight hours. They again work
equally hard. They again endure the same conditions. Sally’s pile is again twice
Sam’s. Should Sally get twice Sam’s income? If she does, we have rewarded her
luck in the genetic lottery: her size and strength. Is that moral or efficient?
suppose we compare two people doing mathematics investigations, or creating
works of art, or doing surgery, or doing anything else socially desirable. They
work equally hard under the same conditions. One has more of some relevant
natural talent and the other has less of it. Should the former be rewarded
commensurately more than the latter? Clearly, there is no moral reason to do so.
Why reward someone for genetic luck on top of the benefits the luck already
bestowed them? More controversially and interestingly, there is also no
incentive reason to do it. A potential recipient of bounty for innate talent
cannot change her natural talent in response to the promise of higher pay. The
natural endowment is what it is, and being paid for it won’t cause us to change
our genes to increase it. There is no positive incentive effect.
how about education, or learned skills? Shouldn’t our improving our productivity
be morally rewarded, and also to promote it? That seems reasonable – but not in
proportion to the output the education permits, rather in proportion to the
effort and sacrifice it required. We should reward for the act undertaken, such
as "enduring" schooling. We should provide proper incentive for
undertaking that act. But that is very different than looking at lifetime output
and saying we will reward in accord with that.
Only Effort and Sacrifice!
we reward effort and sacrifice, not property, power, or output. What happens?
Well, if jobs were like now, those doing the most onerous or dangerous or
otherwise debilitating work would be highest paid per hour of normal effort.
Those with the most comfortable conditions and circumstances would be lowest
paid per hour of normal effort.
shouldn’t a surgeon get paid for all those years of schooling, as compared to a
nurse or a janitor, say, who has less schooling?
Whatever the level of effort and sacrifice the years of schooling entailed, the
surgeon should be paid for that while schooling herself. Later, the surgeon
should be paid in accord with the effort and sacrifice expended at work just
like the janitor in the hospital should. In this event, each person should be
rewarded according to the same norm – paid according to effort and sacrifice
expended at a worthwhile job that contributes to society.
then no one will be a surgeon, is the reply. Folks will prefer being a janitor.
Imagine you are just out of college. You now have to choose – will it be medical
school for six years followed by being a doctor for forty, or would you prefer
being a janitor in the local hospital for the full forty-six years. More
exactly, how much do you have to be paid to go to medical school instead of
being a janitor for the first six years, in light of the quality of life you
will have then and later? Or, vice versa, how much would you have to be paid to
opt to be a janitor for the first six years rather than to go to medical school?
And then, how much would you need to be paid to do either of the jobs as
compared to the other for the remaining forty years?
ask these questions is to answer them and to reveal that the motivational
effects of payment according to effort and sacrifice are exactly right if we are
discussing a world in which people are free to choose their jobs without
encumbrances from history or limiting institutions. Of course not everyone will
seek these specific jobs, but the thought experiment is easy to translate to all
short, other things equal and all options open, you need and deserve more pay to
provide you the incentive to do that which requires greater effort and
sacrifice-way more to be a janitor than a student. But you don’t need nor do you
deserve more pay to do something that is more fulfilling, more empowering, or
yields more output, assuming it doesn’t require greater effort and sacrifice-you
need less to be a doctor than a janitor.
Reward is that those who put out more effort and sacrifice at a needed set of
tasks for society get more income. Those who put out less for society, get less
income. That’s the goal we propose for a participatory economy: Just Rewards or
payment according to effort and sacrifice.
what if someone can’t exert due to health or other reasons?
wage slave economies recognize that in such cases there ought to be remuneration
anyway. Reasonable people could differ about how much, of course, but the
average income in a just society would seem proper.
what if someone has some ailment requiring expensive treatments, or suffers some
calamity – natural or otherwise, that destroys their holdings?
course, a just society addresses these needs socially, insuring against them for
everyone, socially, and not leaving individuals to suffer them alone.
what about children who can’t/shouldn’t work? Are they dependent on the income
of parents so that parents with three children have less per person than those
with one child or none?
children’s income is like that of anyone else who is unable to work, it is
average and rewarded socially, simply for being human.
in light of the above examples, we have a caveat: the goal is Just Rewards,
which is payment according to effort and sacrifice or according to need when
effort cannot be expended or need is excessive due to disease or other calamity.