Personally I don’t care either that used car salaesmen earn more than I do, but I do care that the ‘MARKET’, understood as a rhetorical device, is increasingly being deployed as a reason for denying purposive political and social activty, and is also being used to rip up important social and political rights that exist precisely because the ‘great unwashed’ preferrred that they didn’t enter into a ‘market’ composed of themselves and their families.

If it can be remedied I’m quite happy to get concerned about used car dealers earning more than nurses and teachers. But it’s a fairly intractable problem to deal with – so we live with it like I live with my odd aches and pains. All the alternatives look worse.

It (undervaluation of teachers and nurses not my aches and pains) can be remedied a bit with political and cultural action to try to value teachers and nurses more – economically and socially. But there will remain all sorts of unproductive activities in markets and markets will provide larger rewards to activities we won’t think are all that owrthy. And markets are as good an institution as we’ve got for a lot of social and economic tasks – and we don’t have any way of curbing some of the problems we see that don’t take us into territory that we have reason to be suspicious of.

Perhaps a welfarist utilitarian, who says that advancing the wellbeing of everyone should be regarded as equally important, should be classified as a Centrist welfarist, although in terms of policy recommendations it can be argued that utilitarianism tends to favour relatively egalitarian social and economic actions that would generally be described as Leftist political measures relative to the political status quo.

I think people who would normally be described in mainstream political debate as Leftists or Conservatives tend to give a higher priority to promoting wellbeing (versus freedom) than people who would might be described as Liberals.

Then there’s the debate about the best means to achieve the philosophically desired ends. The general Leftist preference for substantial social democratic or democratic market socialist actions (such as strong government spending on healthcare; cash social security payments; and education, training and transport, especially for the disadvantaged) makes sense if these actions enhance overall wellbeing, perhaps with some priority being given to advancing the wellbeing of the less well off. And I think the evidence supports this judgement.

As for government controls on social security recipients driven by strictly paternalistic considerations, liberal purists should oppose them. And welfarists should support them if and only if, enough social security recipients engage in less self-harming activities when given commands by the government than when left alone to outweigh the harm done to those penalised for breaching paternalistic social security rules and the nuisance caused to others who did not behave more prudently as a result of government interventions.

Some people may also value individuals getting what they deserve, but for reasons given in an earlier comment I don’t think that attempting to achieve this goal is justified. People normally described as Conservatives in political debate would, I think, tend to be more attracted to this deservingness goal than Liberals or Leftists. Also, if we were to compare Conservative supporters of rewarding deservingness and Leftist supporters of rewarding deservingness you would find they have different concepts of deservingness, with Leftists conceptions tending to produce better outcomes for the less well off than Conservatives conceptions.

For example, a Left (Useful) Effort Meritocracy, where people were rewarded for autonomous socially useful effort would be better for the less well off than a Right (Useful) Effort-Plus-Ability Meritocracy, where people were also rewarded for their natural ability. While you might be able to make some sort of argument that – subject to numerous caveats (see comment above) – market wages reward people “in line”

First, people have no control over their natural ability and hence do not deserve to be rewarded for this. In the same way that people aren’t responsible for the social class into which they are born, people aren’t responsible for their genetic inheritance. Second, rewarding people for (hard) work can’t be intrinsically justified unless people have freewill and the case has to be made that people do have freewill. We can’t simply assume this. Third, people can’t do anything without access to natural resources, most obviously breathable air, so you need a credible theory of how natural resources should be distributed before you can contemplate developing a potential theory of individual deservingness.

Fourth, I don’t think you can say that (hard) work is intrinsically virtuous. You can argue for rewarding some work to some extent on grounds of social utility, but that’s a separate issue. If you ignore social consequences, is someone who chooses to work more deserving than someone who doesn’t? If so, why so? What justifies this moral judgement? If we make it, what is there to prevent us making various other illiberal judgements and basing rewards on these judgements? Perhaps those who prefer Proust to porn should be rewarded

And I’m pretty sure there aren’t many people losing sleep over the fact that some used car dealers are earning more than left wing sociologists — even when the sociologists have higher IQs and work harder (I can’t say it worries me).

Personally I’d side with Hayek over Saunders on this issue. We need markets but markets don’t need people to believe that they distribute rewards according to some criteria of moral merit. We should be happy with procedural fairness alone.

Once we’ve recognised that markets aren’t fair in a distributive sense then we can think clearly about what governments ought to do outside of the market (and that’s where I disagree with Hayek).

As I’ve argued elsewhere, different principles can apply within different institutions. For example, access to higher education can be on academic merit (not moral merit), access to healthcare can be on need, lotteries on chance and markets on whatever outcomes emerge from rule governed exchange.

I doubt that it’s possible to get a majority of people to agree to a distributive justice principle which applies to the distribution of all goods and burdens within society.

It may be that Saunders’ rebuttal of Hayek requires an addtional qualification, namely that the income-earning activity be lawful. But perhaps he regards that point as so obvious as not to require explicit statement. As for any additional qualification that retention of public confidence in the market economy requires some mechanism in addition to market forces to determine the relative moral worthiness of various lawful occupations and ascribe differential wage levels to them in accordance with that moral judgment (e.g. as between nurses, teachers and sex workers), I don’t see anything in Saunders’ argument that requires any such qualification. Maybe Saunders overstates the starkness of the distinction between his position and that of Hayek. It may well be that most people if asked would (as Don suggests) say that good teachers or nurses should earn more than sex workers (although I’m not sure of that), but I seriously doubt that the fact that this isn’t the case in the real world actually undermines public confidence in the market economy. I don’t think very many people lose sleep over the fact that used car dealers earn more than nurses either. To the extent that Saunders doesn’t explicitly qualify his argument to acknowledge that Hayek was correct at least to that extent, you’re probably correct.

Personally, I don’t consider “conservativism” a political philosophy. More a preference for yesterday and a preference for slow change. Socialists always want public healthcare. Libertarians always want private health care. Conservatives want whatever they had yesterday.

But with some on the left jumping over to the conservative side and then deciding to try and justify their beliefs, they created a new thinking-man’s conservative political philosophy. It is perhaps a natural outcome from the failing marriage of classical liberals and conservatives.

I would describe Saunders as a moderate libertarian or classical liberal. He gets a few things wrong (e.g. child subsidies) but he’s mostly on my side. :) I certainly wouldn’t class him as conservative (as described above), and I don’t think neoconservative fits either. I imagine he has considerable sympathy with a Hayek world.

The reason I’m getting frustrated is that there’s a part of Peter’s argument that just doesn’t make sense to me. Even after his responses here I still don’t know how to make sense of the argument. It could be that the problem is the way I’m interpreting Saunders’ reasoning. Let me set out the argument as I understand it.

1. Hayek’s critique of meritocracy. In his 1999 Bert Kelly Lecture Peter says that he is rejecting Hayek’s arguments against meritocracy. So what did Hayek say?

Most people will object not to the bare fact of inequality but to the fact that the differences in reward do not correspond to any recognizable differences in the merits of those who receive them. The answer commonly given to this is that a free society on the whole achieves this kind of justice. This, however, is an indefensible contention if by justice is meant proportionality of reward to moral merit. Any attempt to found the case for freedom on this argument is very damaging to it, since it concedes that material rewards ought to be made to correspond to recognizable merit and then opposes the conclusion that most people will draw from this by an assertion which is untrue. The proper answer is that in a free system it is neither desirable nor practical that material rewards should be made generally to correspond to what men recognize as merit and that it is an essential characteristic of a free society that an individual’s position should not necessarily depend on the views that his fellows hold about the merit he has acquired (p 94).

Hayek argues that markets should embody procedural justice rather than distributive justice. In other words people need to be satisfied with a fair process rather than an outcome which conforms to some pattern (eg equal shares, distribution according to need, reward for merit).

It’s important to get two things clear:–

(i) When Hayek used the word ‘merit’ he meant moral deservingness.
(ii) Hayek rejected the idea that the distribution of incomes in a free market society would conform to any standard of merit.

2. Saunders’ critique of Hayek. Peter responds to Hayek by saying:

While he is to be admired for his honesty, Hayek was an economist and a legal philosopher, not a sociologist. A sociologist would heartily disagree with Hayek’s conclusions. As Durkheim said 100 years ago, in order for any society to work and function with stability, it has to have a clear sense of how it justifies its arrangements to those who live in it. Hayek’s ‘like it or lump it’ stance is unproductive because it will never provide legitimation and justification for a free capitalist society. It does matter why people end up where they do and with the resources they end up with. The reasons are important, and the questions must be answered. Neither the egalitarian nor the liberal position can function as an alternative to meritocracy because ultimately they both offend a sense of what is appropriate and fair…
…the liberal position is offensive when it says I don’t care why you’ve got your money, I don’t care whether you deserved it, and I’m not going to make an effort to rectify what, as Hayek himself says, appears to be a gross injustice. The fact that really hard working, honest people don’t get rewarded, and that this situation is not worth rectifying is offensive to popular sentiment.

The rebuttal of Hayek’s argument rests on three claims:–

(i) The public will not be satisfied with differences in income just because they are the result of fair process — people will only accept these differences if the outcomes conform to some standard of fairness (ie some principle of distributive justice).
(ii) The only standard (distributive justice principle) which can claim majority support is meritocracy — reward for ability + effort.
(iii) Societies like Australia’s and Britain’s are reasonably meritocratic in this sense — far more meritocratic than many sociologists claim.

If Peter’s claim at (ii) was correct then this would logically imply that a majority of people would accept that it was morally justified for a prostitute or drug dealer to earn more than a nurse or teacher provided they had more talent and worked harder. I think that is demonstrably false. I’m pretty sure that if you explicitly asked this question in a survey a majority of people would not agree.

Peter’s definition of merit doesn’t take into account whether the person’s activities harm others or even whether their business is legal. Yet, at the same time, Peter argues that Hayek’s position is offensive because it says "I don’t care why you’ve got your money, I don’t care whether you deserved it".

If Peter’s claim at (i) was correct then his thin definition of merit as reward according to ability + effort is obviously inadequate. On its own, it cannot provide the kind of moral justification for market incomes that he says the public demand.

3. Am I confused? It’s possible that I’ve misinterpreted Peter’s argument. For example:

(i) He has misread Hayek’s argument. It may be that Peter misunderstood what Hayek meant by ‘merit’. Rather than referring to moral merit he thought that Hayek meant ability + effort.
(ii) He doesn’t actually disagree with Hayek at all. It may be the Peter regards the fact that income distributions tend to track ability + effort as evidence that the system is procedurally fair.
(iii) He really does think that most of the public would accept that talented hardworking drug dealers are more deserving that less talented and hardworking nurses and teachers.
(iv) … I’m out of ideas. What interpretation have I missed?

One thing it’s easy to forget during these discussions (I know, because I often forget myself, and get discouraged as a result) is that for every closed-minded commenter who contributes just to score a petty debating point, there are 20 or 30 readers who don’t respond but are absorbing both sides of the argument with appreciation and interest. I’m certainly in that category in this discussion (which should be apparent to Peter from comment 19 above).

Ronald Dworkin came up with a thought experiment (in Taking Rights Seriously) designed in part to maximise societal equality of opportunity while also rewarding merit, initiative and hard work. Everyone gets to bid at a life auction, with an equal amount of money, for the bundle of resources that most nearly allows them to fulfil their life aspirations/ambitions. However, they don’t know what talents and abilities they possess to enable them to realise those ambitions (it’s a bit like John Rawl’s Veil of Ignorance in that respect). To deal with this non-material/innate inequality of opportunity they also get to use part of their bidding funds to purchase insurance against the possibility that they’ve been dealt a bad hand in the poker game of life (either genetically or in terms of the parenting abilities and attitudes of their mum and dad). The premiums are used to compensate them for the disadvantages that aren’t their fault (both genetic and nurturing).

It’s a nice idea. But how do you separate and measure factors deserving of compensation from those worthy of blame for which one should suffer the consequences of one’s choices? It’s impossible, I suggest, and even if it wasn’t you would end up with a society of a type that would be impossibly intrusive to live in.

There is certainly more that we in Australia could and should do to enhance equality of opportunity. Fred Argy’s proposals on early childhood interventions are the most obvious examples of things we should be doing. However, in general I’m also persuaded to a fair extent by Peter Saunders’ arguments that places like Australia (and probably the UK) don’t stack up too badly overall in meritocratic terms. Perfect meritocracy is impossible to achieve, in part because it’s impossible to define and in part because you will inevitably reach a point of diminishing and even negative returns.

For example, Noel Pearson argues that current schemes for free school breakfasts, lunches etc for Aboriginal kids on Cape York, while boosting school attendances and childhood nutrition in the short term, run the risk of actually making things worse in the long term because they exacerbate parental opting out of responsibility and its wholesale transfer to the State, which is neither desirable nor viable in the long term. I think he has a point, just as I think Peter Saunders has.

In that sense I don’t actually have a problem with interventions that would compellingly pass a cost-benefit analysis test (like early childhood intervention).

My point was merely that the presumption against intervention and for property rights shouldn’t and needn’t rest on some idea of moral desert as there were other more compelling reasons for such presumptions (systemic government failures being one you identified) – this is a proposition that Hayek would have wholeheartedly agreed with but not Kristol. As Don has identified spot on in his post, this is the difference between Hayekian liberals and neoconservatives and what makes neoconservatives what they are – the search for some link between moral desert and the outcomes of capitalism.

On the one had you argue that society needs a way of legitimating inequality and suggests that reward for merit is the principle with the greatest level of public support. This requires a MORAL definition of merit.

On the other hand in your empirical research you use a definition of merit that strips it of morally relevant features. On your definition, hard working and intelligent tobacco lobbyists — or even illegal drug dealers — have a greater claim to merit than nurses or firefighters. I can’t see how a principle that produces results like that can legitimate inequality.

For me this tension seems so obvious that I find it hard to accept I’m arguing with someone who is being open and honest about their position and their reasons for holding it. I really do wonder whether you’re marketing an justification you think will sell but don’t find entirely convincing yourself.

http://catallaxyfiles.com/?p=588

So in a sense it is myth-making, whether sincerely espoused or not. I certainly agree that Peter is fully sincere in what he says.

You refer to a UK study of occupational mobility. The evidence on income mobility is much more stark (see my AI paper) – but let us leave that aside and accept your results as you have presented them. If my arithmetic is right, they show that some 17% of occupational variance CANNOT be explained either by IQ or hard work. That’s a hell of a lot of people!

How then can you go on to conclude that “modern capitalist societies do not fall far short of any reasonable meritocratic standard”

(a) you believe in meritocracy as an ethical ideal;
(b) you think that it is legitimate for governments to take action to make society more meritocratic;
(c ) you have empirical evidence that western capitalist societies are reasonably meritocratic.

I strongly agree with your argument that children’s beliefs about the causes of success and failure have a powerful influence on outcomes. Children who falsely attribute failure to external causes outside of their control can become fatalistic and fall short of their potential.

But equally, if children attribute their lack of success to an innate lack of ability you’ll get the same result. In her research, psychologist Carol Dweck has found that many children believe that ability is fixed while others believe that it can be increased through effort and persistence. The first group display a ‘helplessness pattern’ while the second display a ‘mastery pattern’.

The helplessness group are easily discouraged. When they come across something they can’t do they "denigrate their abilities and blame their intelligence for the failures." As a result, they tend to avoid difficult tasks. In contrast, the mastery group treat difficult tasks as a challenge. They try harder, they look for new strategies, and they keep trying. This group enjoy challenges and seek them out. It’s not hard to guess which group is most likely to reach its full potential.

You condemn ‘leftist propagandists’ because they convince working class kids to give up before they’ve even had a go. But claiming that countries like Australia are largely meritocratic can have the same effect. When children from economically disadvantaged families see children from better off families outperforming them, should they assume that this is because the better off children are smarter? If the system was genuinely meritocratic and both sets of children were equally motivated then this would be a logical conclusion.

As I think you’ve acknowledged, children from better off families are able to outperform equally intelligent children from disadvantaged families. And this effect persists into the labour market.

It seems to me that simplistic claims about Australia being a meritocratic society are likely to discourage social mobility for children from disadvantaged backgrounds in a similar way to ‘leftist propaganda’ about class barriers and racism. Parents, teachers, employers and policy makers come to believe that children from some backgrounds are born with lower levels of ability or have culturally inherited traits that make them lazier and less motivated. Kids get the message and suffer the consequences.

All of this overlooks the powerful effects of the early childhood environment on cognitive development. When children arrive in the classroom they’re carrying more than just their genetic endowments — at the age of 5 or 6 they can already be struggling from the effects of a disadvantaged environment.

If you really do believe both (a) and (b) then I’m puzzled why you aren’t a stronger supporter of government interventions aimed at supporting children and families during the early childhood years.

You’ve attacked Fred Argy’s arguments but it seems to me that he’s the one who has concrete proposals for making Australia more meritocratic and for enabling all Australians to reach their full potential.

I don’t know if neoconservatives like Kristol were ever worried about a “working class revolt against capitalism.” In an essay about equality Kristol wrote that bourgeois society “is not nearly so fragile as its enemies think or its friends fear.”

What really worried Kristol was idealistic new leftists. He thought that people yearned for something more than a peaceful and prosperous bourgeois society could deliver. Affluence might make people materialially comfortable but it would not make the best of them spiritually relaxed (Clive Hamilton is probably the closest thing we have to the people Kristol was talking about).

There’s an interesting interview with Daniel Bell in a recent volume of Thesis Eleven (Peter Beilharz spoke with him in 2004). Bell talks about the way people turn to religion because they “need something beyond the mundane.” Like Saunders he draws on Durkheim’s work.

I tend to agree with Fred as well. Saunders is only a “neocon” even in the limited sense you define if we assume that he really doesn’t believe that market economies are meritocracies but wants to prevent the proles from finding out.

However, even if Saunders IS a neocon in that sense, I don’t see any real sign of the Straussian neocon amoral panic, that the masses might desert capitalism if they discover that it doesn’t reliably reward merit, taking hold generally among Australian conservatives. I suppose some aspects of the History Wars might be attributed to some such fears, and similarly with current Howard government campaigns about the teaching of English literature in our schools and the imagined malevolent influence of critical theory.

But that’s about the extent of it as far as I can see. Neocon thinking really hasn’t taken root in Australia to any significant extent, either in academia or among the conservative political classes. Maybe that’s in part because things actually aren’t all that bad or unfair in Australia, despite 10 years of the Howard government. Income inequality is still significantly better in Australia than the US and hasn’t worsened since the Howard government came to power (at least according to ABS, although NATSEM puts a slightly different interpretation on the figures), and we also have significantly better social mobility (see this paper by Andrew Leigh). We certainly don’t have a huge underclass of working poor like the US, nor are we likely to acquire one in the near future, especially if Howard continues to water down WorkChoices in the face of

I think you’re right that Saunders does deny that there is unequal opportunity in Australia. And in some of his best known British work he denies that there’s a serious problem in Britain as well (see his attacks on John Goldthorpe’s research).

When he says that ‘we need to make meritocracy work’ what he seems to mean is that researchers like you should stop pointing out how little equality of opportunity there is in places like the US and UK.

For this purpose let me ignore the issue of foreign policy intervention and distinguish between three sets of home-grown moral values:
- social justice values