Sunday, 24 January 2016

Desert bases and market income

So far in this series of blogs I have argued that there are serious problems when starting a theory of economic desert from either market incomes or the traditional desert bases. In this post I want to suggest that there is a link between the common desert bases and market income, even though it is not feasible to claim any simple and direct link between the two.

If we consider the three desert bases outlined previously we can see that they will, in most circumstances, have a strong influence on someone’s income.

Effort: If someone puts in more or less effort across their working life then we would expect their lifetime income to rise accordingly. This will be particularly true of people who are self-employed or paid for piecework, but we would even expect it for people in salaried jobs as their harder work may be noticed by superiors who will be keen to retain or even promote them.

Contribution: This desert base is often considered to be directly related to market income and so it is not controversial to claim that greater contribution will bring about greater market incomes.

Compensation: The labour market should also lead people to be rewarded more if they sacrifice more. People who work in more stressful, dangerous or unpleasant jobs get paid more than those with similar skills and talents doing less difficult work. In the UK an investment banker will get paid more than someone in the human resources department of a bank, a deep sea diver will be paid more than a teacher and a bin-collector will get paid more than a labourer.

The point is not universal. There may be people who put in lot of effort but in an undirected manner and would be more successful if they relaxed and slept more or slowed down and reflected more. Similarly, people’s sacrifices may sometimes go unrewarded, for example if they are the hardest working person in a large team where the rewards are shared out equally or where a lot of people only have less enjoyable work available to them such that wages are low.

Contributions to the economy (and certainly society in a wider sense) do not always result in market rewards. Some people may contribute a lot in a way that is not recognised by the market—such as charitable work or caring. Additionally, there may be people who obtain a very high income without contributing very much at all—such as those who find a legal loophole which they can exploit to make money.

However, while it is not a universal rule that income goes up for those who act according to each desert base, for the most part the person will be rewarded in the market for their activities.

What I wish to highlight in this blog is that there is a link between market rewards and all of the economic desert bases. The link is sometimes quite weak, since market incomes depend upon supply and demand rather than acts in accordance with desert bases. Nevertheless I think it is important to note this and how this fact should lead us to reassess our views of the desert approach to economic justice.

1.       Has the link caused some to find the pro-market aspect of the desert approach more plausible than it is?
2.       Has the link caused some people who are pro-market to seek to find a desert base that supports their preferred view?
3.       Does the link mean that anti-capitalists who take a desert-based approach to justice should be more pro-market than they are?
4.       Does the link imply that the most plausible desert base will take account of (or make use of) market pricing, though not be identical with it?

Along with these, there may also be other interesting questions that follow from the relationship I’ve highlighted between desert bases and the market. However, I will focus on the fourth of the above in my next blog, where I will construct a more complex alternative desert base which I believe is much more plausible than the approaches I’ve presented so far.


Physiocrat said...

Interesting but the possibility of receiving rental income at no effort from land ownership trumps all talent and effort.

You can have all the talent and work 100 hours a week but you will still end up paying rent to the owner of a land title, who receives that rent at no effort on his part.

When are you going to get to grips with this?

dougbamford said...

Hi Henry, supporters of a desert theory of justice would want to tax unearned gains at 100% as they wouldn't be deserved! I'm therefore not sure what your point relates to.

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