Libertarians are often accused of advocating for a merit-based society. The free market, the argument goes, produces a distribution that more-or-less corresponds to how meritorious the people are. If you’re poor, you likely deserve to be poor; if you’re rich, the same. To mess with the market is to mess with that moral order.

Even worse than those who pigeon-hole libertarians into that argument, however, are those libertarians who actually make this argument. Bad arguments for libertarianism not only harm the cause of liberty over all, they divert attention from the arguments that deserve the most consideration. Moreover, because we tend to better remember the bad arguments for ideas we oppose, bad arguments get recycled by our opponents more than the good ones.

Merit should have nothing to do with why libertarians advocate for free markets. At any given time-slice in a free market some people are up and some people are down. Why they are up or down is beyond the ken of both the market and those who support markets.

The first question to ask, of course, is what merit is. This question proves quite difficult, but it seems, at a minimum, that merit refers to the characteristics that make an activity praiseworthy rather than the characteristics make it valuable. The free market “determines” value through a freely flowing price system that quickly accounts for changes in supply and demand. Merit, however, looks beyond the market value to assess the quality of the individual action.

For example, someone may become incredibly good at a video game, and they may do so despite overwhelming odds (vision or tactile impairment, perhaps). Many would consider this a meritorious accomplishment, but it is one that has little value in the marketplace. Similarly, someone may become quite wealthy despite expending little effort or cleverness. This may be meritorious or not, but the market cares little.

A properly functioning free market does not reward people based on merit; it rewards people based on output. If someone produces goods or provides services that are valued by others, then she will be rewarded for it. Perhaps this comes easily to her, or perhaps it’s difficult. There are some born with innate talents while others struggle to learn viable skills. Still others are born into propitious circumstances that make success easier, while others begin life in situations that hinder their future success.

We are all bundles of hindrances and abilities. Some of these may be the product of nature, the product of our family life, or just a learned skill. It is because of these complex backgrounds and subjectivities that the market must rely on objective criteria such as output, rather than subjective criteria such as merit. By focusing on the objective criteria of output, we avoid subjective determinations of value. We also encourage productivity, which ultimately broadens the possibilities for success and makes wealth available to more people.

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.

Still, some libertarians, particularly of the objectivist bent, may align market success with merit. Many characters in Rand’s novels, after all, are heroes whose successes in the marketplace are indications of their virtue and merit. If you wish to admire the character traits that lead someone to become a steel tycoon, that’s fine. But it does not follow that those who failed to become tycoons are less meritorious. The singer-songwriter who makes a decent living crafting excellent songs and playing small venues can also be praised as meritorious. Most importantly, we can point to the wealth produced by the free market as the primary reason why singer-songwriters can even make a living.  

Wealth is not a sign of merit, and poverty is not a sign of failure. As I’ve argued before, we should champion the free market as a system where productivity allows people to be artists, record store clerks, or even bums. We can personally praise or chastise anyone for their life-choices and values, but we should not argue that the market is there to do it for us.