Hayek on desert

Elizabeth Anderson does a fine job of demolishing, on Hayekian grounds, the idea that people deserve their incomes. And Tyler Cowen gives an excellent reply. The one thing that’s missing are some direct quotes from Hayek himself. Let me fill the gaps.

There’s this from volume II of Law, Legislation and Liberty (p71-72 in my copy):

[The function of the price system] is not so much to reward people for what they have done as to tell them what in their own as well as in general interest they ought to do. …To hold out a sufficient incentive for those movements which are required to maintain a market order, it will often be necessary that the return to people’s efforts do not correspond to recognizable merit…In a spontaneous order the question of whether or not someone has done the ‘right’ thing cannot always be a matter of merit.

And this from page 74:

It is probably a misfortune that, especially in the USA, popular writers like Samuel Smiles and Horatio Alger, and later the sociologist W.G.Sumner, have defended free enterprise on the ground that it regularly rewards the deserving.

And this from page 64:

It has of course to be admitted that the manner in which the benefits and burdens are apportioned by the market mechanism would in many instances have to be regarded as very unjust if it were the result of a deliberate allocation to particular people. But this is not the case. Those shares are the outcome of a process the effect of which on particular people was neither intended not foreseen by anyone when the institutions first appeared – institutions which were then permitted to continue because it was found that they improve for all or most the prospects of having their needs satisfied. To demand justice from such a process is clearly absurd, and to single out some people in such a society as entitled to a particular share evidently unjust.

Nor was Hayek opposed to redistribution as insurance. This from page 87:

There is no reason why in a free society government should not assure to all protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need to descend. To enter into such an insurance against extreme misfortune may well be in the interest of all.

Nor even was Hayek opposed to proportional – as opposed to progressive - taxation. He wanted a rule that would stop the former shading into the latter. From page 323 of the Constitution of Liberty comes this:

The most reasonable rule of the kind would seem to be one that fixed the maximum admissible (marginal) rate of direct taxation at that percentage of the total national income which the government takes in taxation.

The UK now obeys this rule.

Professor Anderson is therefore spot on – there’s nothing in Hayek to justify the claim that people deserve their incomes. (There’s nothing in Nozick either, but that’s another story.)

My only concern is that Professor Anderson is attacking a straw man. Surely no-one is stupid enough these days to seriously claim this. We must distinguish between serious political debate and emotional spasm.

Comments

[Blimpish]

That second quote's the key one - my recollection is that Hayek was very wary (in a way that his political followers sometimes aren't) of discrediting the liberal economic order by insisting that its outcomes were just.

But you're right - it's a bit of a strawman. Only the odd (in both ways) Randian would insist that all fruits of capitalist production are just. For Hayek, the question is more one of efficiency (i.e., market distribution on the whole contributes to prosperity) and politics (i.e., intrusive and arbitrary redistribution is inimical to liberty).

[dearieme]

I deserve my income in the sense that I play the game by the rules: I don't mug old women or otherwise use coercion, I don't run cartels or monopolies, or evade my taxes, or set my own pay to loot my shareholders. (I'm not sure that our MPs could make the equivalent boasts.)

I don't deserve my income in the sense that it is no sign of moral merit in me that I happen to have gifts that allow me to earn the income that I do.

No prob: all you have to do is elevate the discussion of "deserve" above the level of the primary school playground.

[Robert Schwartz]

Is Ms. Anderson a dominatrix? Does she beat her customers with whips and tell them they are worthless vile wimps who deserve nothing, not even to lick her feet? Does she look hot in a leather corset?