Julian Sanchez header image 2

photos by Lara Shipley

Buying Virtue

January 29th, 2007 · 2 Comments

Ezra wants to debunk the “pernicious fallacy” that income is “somehow related to the virtue or necessity of the position, rather than its skill level and the supply of labor willing and capable of filling it.” Well, no dispute here, but whose fallacy is this supposed to be? Sure, there are very crude versions of libertarianism or conservatism grounded in the idea that market outcomes are sacrosanct because people “deserve” what they make in some deep moral sense. But Hayek, for one, took enormous pains to debunk this notion, arguing that market compensation neither can nor should reward “virtue” or “merit.” As economists are fond of pointing out, water (which we’d quickly die without) is infinitely more valuable than diamonds (pretty ornaments) by the standard of human needs; the far higher market value of diamonds is a function of scarcity, not intrinsic worth. For Hayek, the start and end of the moral case for markets was that they tended to allocate resources in ways that promoted growth, which he believed would be in the long term interests of all members of the society, and that they tended to allow greater autonomy than centralized allocations would produce. Nozick would have added that market relations have the morally attractive feature of being uncoerced, “from each as they choose, to each as they are chosen,” but was equally insistent about talking about people’s being “entitled” to their holdings rather than “deserving” them.

Ezra, interestingly enough, seems to want to make income mirror merit.* He writes:

[We may] need to in some other way modify compensation to better accord with our beliefs about the dignity of the work and the just desserts [sic] of the individual….Folks who want to blunt concern over inequality tend to digress onto unrelated ground, like how much better a low income worker does than his paleolithic forebears, or whether they’re “happy.”

So, grok: The point is not that we need to augment the incomes of the badly-off just because everyone deserves some baseline level of well-being as such, or even because of some psychological effect whereby those lower down the income ladder, though reasonably well off, are made unhappy by contemplation of their relative position. Rather, we should be paying more to people who do specific jobs as a reflection of the intrinsic moral dignity of what they’re doing. There are (at least) two rather serious problems with this.

First, from the perspective of liberal neutrality, we ought to be wary of trying to make public, political decisions about the relative moral merit of different vocations. How much of a virtue subsidy do we want to give a maid? A nurse? A teacher? A rabbi? An actor? An artist? A bartender? And how does any of that square with the liberal ideal of a society in which questions about what constitutes “a good life” are supposed to be left, as much as possible, up to the judgment of individual citizens?

Second, you can’t make income serve this merit-rewarding function without screwing with the allocative function in fairly serious ways. I’m perfectly willing to believe that someone who makes a living cleaning houses works as hard, and is as good a person, as the average attorney. (I suppose the second half of that may not sound like a compliment… let’s say “at least as good a person.”) That doesn’t mean it wouldn’t be a total catastrophe to try to equalize their incomes, because you can’t just fiat away skill and scarcity as constraints on the grounds that they’re unreflective of moral merit. If there are a limited number of people with the skill set and training (or disposition to acquire that training) to practice medicine or run a company, you want price signals that tend to steer those people into medicine or business over alternative careers. That doesn’t mean doctors or CEOs are “better” than waiters or construction workers, and it’s certainly a bad thing if anyone draws that conclusion from the sizable difference in what they typically earn. Still, you’ve got to pick: Labor markets can provide incentives for people to exercise their comparative advantages, or they can reflect the Grand Moral Order of Occupations, as perceived by Ezra Klein, public opinion polls, the Aesthetician General, or whomever else you like. They can’t do both.

*Clarification: Ezra IMs to say that’s not what he meant:

The point I was trying to make is that as a society, we may believe work deserves a certain base level of dignity, and so even if waitresses are paid (by market) $6 an hour, and maids 7, they should all have health care, and EITC should bring them up to X amount a year. I see how what I wrote gave the opposite impression, but I very much do not think government should begin deciding what various professions are worth.

Well, that’s a relief. I’ll note, though, that the allocative concerns still poke in here, albeit to a much lesser degree: To the extent that you erase income differences between maids and waitresses (say) you obscure any market signals about the relative demand for those professions (e.g. “we’ve got about as many waitresses as we need, but could use more maids”). And I do still think it’s a mistake to link income with “the dignity of the work” in this way. If you think people, just qua citizens, are due some basic minimum standard of living, then say that. But let’s keep that separate from judgments about their “dignity” or “desert” qua workers, as though the zeroes at the end of your paycheck were supposed to be some kind of aretemeter. Because unless you want to sign on to the kind of massive and disastrous leveling Ezra disavows, that’ll still end up sending exactly the opposite of the intended message.

Tags: Uncategorized



2 responses so far ↓

  • 1 Frank Quist // Jan 30, 2007 at 4:51 am

    Well, no dispute here, but whose fallacy is this supposed to be?

    I’m not sure how common the laid out fallacy is in other circles, but I can’t count the amount of times it comes by when discussing politics or economics online. When managing a sizable politics discussion forum in NL, most self-described libertarian posters actually seemed to have this position. People very easily equate salary with worth, or the cost of a product with its “right to existence”. If a product sells badly on itself, it has no right to existence.

  • 2 Julian Sanchez // Jan 31, 2007 at 11:35 am

    Well, I don’t think it is a fallacy when it comes to products. There’s a huge difference between saying the value of a commodity or product is only its value to other people (as measured by what people will voluntarily pay for it) and saying that the value or dignity of a person (that is, their *moral* dignity and value) is properly measured by market prices. People are different from widgets.