June 12, 2012 columns

Libertarianism and Merit: A Response to Bryan Caplan

Does it matter whether the free market rewards merit? Should libertarians argue to skeptics that free markets reward merit? Over at the Library of Economics and Liberty, Bryan Caplan has responded to my post, Bad Arguments for Libertarianism: Merit. Bryan’s post also has links to a fascinating exchange on the same subject between him and Shikha Dalmia (here, here, here, and here), as well as a Cato Unbound essay by Roderick Long and Bryan’s response.  

Bryan’s critiques give me a welcome occasion to expand on my original post, which contains many philosophical holes. Originally, I wrote:

If merit comes from striving, effort, or overcoming adversity, then a free market works to diminish the amount of meritorious action in order to increase productivity. Efficiency is preferred over toil. If holes need to be dug, then they should be dug in the most efficient manner possible, not in the most meritorious manner. Digging a hole is hard work, and digging a hole with only one arm is even harder work, but it would be odd if we determined the value of hole-digging based on these considerations.

Bryan responds:

Simple answer: All else equal, the efficient use of resources is meritorious.  This is hardly an eccentric Objectivist invention.  Common-sense morality praises people who use their time wisely, who save for a rainy day, and who calmly weigh their options instead of running around like chickens with their heads cut off.  Of course these aren’t the only things that common-sense morality praises, but they are on the list.

In short, Bryan argues that “the correlation between market success and merit is imperfect, [but] still fairly high.” Great success can come to the lucky and lazy, but they tend to be the exceptions rather than the rule.

I agree. I respect those people who have risen to the top, and I understand that very few of them got there through pure luck. Even for those imbued with natural intelligence and other advantages of birth, success doesn’t just happen.

But the correlation between merit and success is less exact for those who are not successful—that is, there are many people who have worked very hard, have been unlucky, and are not successful. I’m thinking of undiscovered bands, brilliant entry-level workers who had apathetic mentors, and would-be superstar executives who simply didn’t have the right friends. There are also countless people who put in years of good, hard work at companies that eventually failed and who are now over-50 and struggling to find a job in a horrible economy.

But whatever the relationship is between success and merit, it is not integral to the case for the free market, and, if pushed too strongly, it may in fact be harmful to libertarian arguments. The intent of my original post was not only to ask whether libertarians lead with our chins if we decide to include merit in our pro-market rhetoric, but also to ask whether the relationship between markets and merit is a reason we should believe in free markets.    

For me, merit has essentially nothing to do with why I believe in free markets. Insofar as market success imperfectly correlates to what I believe is meritorious, I regard it as almost a coincidence.

Let’s look at some related counterfactuals:

  1. If everything that Bryan pointed to was false—if only a smattering of those who are successful could be described as meritorious under any definition of the word—would there still be a convincing case for the free market?
  2. If someone had an idiosyncratic view of merit—perhaps that “invisible hand” motives are an immoral using of others’ needs and wants to fulfill selfish desires—should that person still believe in the free market?

Yes and yes.

Admittedly, it may be a tougher sell, but even in the face of such obstinacy a successful case for the free market can be made based on the Hayekian/Austrian argument against central planning and the concept of individual rights. These arguments have the added virtue of being both less subjective than opinions about merit and less potentially demeaning to those who, right or wrong, feel cheated by the market.

Depending on your moral philosophy, opinions about merit may not be entirely subjective, but they do come quite close to being merely matters of taste. Many criticisms of free markets ultimately derive from such matters of taste: for example, the idea that the market is not adequately rewarding some characteristic—such as the ability to create innovative and boundary-pushing music rather than bubble-gum pop hits—to the degree that is deserved. Academics, in particular, are susceptible to this wrong-headed thinking about markets, particularly when it comes to whether the market adequately rewards academics. My recent review of Michael Sandel’s What Money Can’t Buy: The Moral Limits of Markets highlights many of Sandel’s preferences masquerading as political theory.

By using arguments based on merit, libertarians open themselves to arguments based on matters of taste. This is true whether or not Bryan’s observation that the “All else equal, the efficient use of resources is meritorious” is just a “matter of taste.” If the fact that markets tend to reward hard work and high skill is a reason to believe in markets, then anyone who doesn’t value hard work or high skill can disagree with markets for the same reason. These people may not be as uncommon as Bryan supposes. Many movements in twentieth-century art and music were based on a conscious rejection of skill, practice, and many other meritorious virtues traditionally associated with quality art. While the market may not adequately reward such art according to the subjective standards of merit held by the practitioners, those artists can still believe in the market because it fosters the productivity that allows them to exist at all.