"Merit" Trouble
Let me join Alan Viard in beating up on Jared Bernstein for the undefined term "merit" in his first basic principle:
Let's Talk "Crunch": Economic outcomes are generally thought to be fair, in the sense that market forces dole out rewards to those who merit them. But that’s not always the case. Power, whether it’s based on political clout, wealth, class, race, or gender, is also a key determinant of who gets what.
"Merit" can, I think, mean four things:
--Marginal productivity: the amount by which, given who you are where you are with the resources you happen to own, total collective product would be reduced if you and your resources were to suddenly vanish from the scene.
--Optimal incentives: because we want people to take local actions that advance our global goals, we have set up a system that provides people in the right place at the right time with the right skills with incentives that give them a better life--or at least more stuff--if they take actions that we regard as adding to the total pie.
--From each according to his or her ability: what each would be able to add to the collective pie if he or she had and is the resources to fully realize his or her potential to the extent that that freedom for the one is compatible with that freedom for others.
--To each according to his or her need: what each of us needs, understanding "need" to include not just bare necessities but also conveniences and luxuries, to the extent that provision of what we need to one is compatible with the provision of what they need to others.
These four definitions of "merit" are very different and have very different implications. By definition #4, an individual with Down syndrome merits a great deal of support and resources. By definitions #1, #2, and #3, such an individual merits zero.
Jared doesn't hold with definition #1 or definition #2--that's the work that the "clout, wealth, class, race, or gender" phrase is doing in the latter part of his definition, to shift us down at least to definition #3. Alan, by contrast, wants to use "merit" as meaning what it means in definition #2--in large part, I think, because the world is not as rich as we would like it to be, and getting incentives right to make the pie bigger seems to him a way more conducive to enhancing social welfare and hence more meritorious than highlighting the gaps between what we each can do and thus get and what we each would get if we had been allowed to develop our ability or get others to recognize our need.
Jared wants to take the word "merit" and use it for definition #3 or #4; Alan wants to take the word "merit" and use it for definition #2 (or #1?). American history and culture is, I think, on Alan's side-- though I wish it were otherwise.
Comments (3)
It's a nice rubric, Brad, but it's also a tad simplistic. I don't think that, for all his free-market fundamentalism, even Alan Viard would argue against, say, universal access to primary education. It constitutes a leveling intervention - an implementation of your third idea of merit - but enjoys near-universal support in this country. By the same token, I presume that Jared wouldn't support the confiscation of all wealth and its redistribution according to some abstract measure of unfettered potential. These positions are useful theoretically, but applied to actual politics amount to caricatures.
What we're really debating, I think, is how to blend these various positions. You're right that Americans have typically placed greater stress than, say, Europeans on the first two definitions of merit. But we also have an enormous public bureaucracy, and a vast nonprofit sector, tilted toward the latter two definitions. These concepts exist in tension with one another. Do we allow the marketplace to dole out rewards as it will? Do we take action to steer it toward doling out those rewards on the basis of marginal productivity or optimal incentives - something it conspicuously fails to do, in some cases, left to its own devices? Since the latter two definitions are also important, when are we better off tinkering with the machinery of the market to implement those goals (say, affirmative action) and when redistributing wealth after the market has done its thing (e.g., medicare)? Those are, in some sense, more interesting questions. At least to me.
April 11, 2008 4:09 PM | Reply | Permalink
I have been reading the economic analysis going on by people much smarter and better informed than me. But it seems like too much “rocket science” taking place. Correct me if I am wrong. The American worker is caught between the gradual reduction and losses of wages due to the emergence of the global economy and the continuing increase of oil prices. Both of these phenomena have become dominate during the last 30 years. You can throw in increasing medical costs for desert but that is a different issue.
The global economy is requiring us to compete with third world wages. There’s not much that can be done about that and any politician who campaigns on a “Your going to earn less and have to learn to live with it.” ticket has about the same chance that I have of seeing age thirty again.
NAFTA is a drop in the bucket compared to our trade deficit and lost jobs to China. And there is no way out of this. China (am I correct?) has tied its currency to the $US instead of letting it float on the international currency market. This prevents their currency from appreciating and adjusting the trade imbalance. The U.S. can’t force them to float their currency. They hold too much of our national debt, giving them an effective veto power over everything from boycotting the Olympics to intervening in Darfur.
The increase in oil prices at the gas pump can be dealt with by individual consumer decisions but this will take place over the next decade or longer. The generalized inflation that radiates through the economy due to higher energy costs is unavoidable in the medium run and will have to be lived with.
So us working class types are just going to have to tighten our belts and work (creatively) for a better world for our children.
April 11, 2008 6:27 PM | Reply | Permalink
China has pegged the yuan to the dollar, but lately have been fiddling with the range for the peg. As a result, the yuan is now relatively stronger (quite a bit actually) than it was five years ago, for instance.
April 12, 2008 4:03 AM | Reply | Permalink