Just Rewards

Michael Albert

In a desirable economy what income does each actor get to enjoy? What is the basis for remuneration?

Rewarding Property?

I doubt that many folks reading this commentary think people should be rewarded due to owning property. This is called profit…and in this case individuals own means of production and pocket profit based on the output of those means of production. This leads to someone like Bill Gates having more wealth than the entire GNP of Norway, or, if you prefer, 475 billionaires together having more wealth than half the world's population. Being born rich due to inherited property doesn't reward a person for something worthy that he or she has done nor even provide incentive to do something he or she otherwise might not have done. There is thus no moral or economic rationale for it other than aggrandizing the few.

Rewarding Power?

Folks reading this probably also don't think people should be rewarded based on their ability to extort a greater share of society's product due to their power. A thuggish economic actor - using racism or sexism or a monopoly on some asset - shouldn't be able to translate that power into income. Sure, in an economy where extortion is a norm we wouldn't want to say that that unions shouldn't be allowed to demand and use their power to win higher wages against the power of owners and others. But in a good economy where everyone is subject to new norms and not battling for advantage, surely we agree that we wouldn't want owners or unions or any other actors to be gaining income based on relative power. Rewarding power is no more moral ethical or economically efficient than rewarding ownership.

Rewarding Output?

Leftist controversy over what is "Just Reward" arises, if at all, regarding the possibility of rewarding output. A perfectly sensible and humane person reading this essay might think, roughly, each economic actor ought to get back a share of output equal in value to what they themselves produce for the economy. This has even been the slogan of very radical movements-the Wobblies, for example. And it seems fair: If you don't put much into society's economic product, you shouldn't take much out. If you put a lot in, you should take a lot out. Otherwise, someone else gets value you put in, or you get value someone else put in, instead of each of getting back only the amount of our own contribution.

But, suppose Sally and Sam are picking oranges. Sally has a good set of tools. Sam has a crummy old set. They go into the fields for eight hours. They work equally hard. They endure the same conditions. Sally's pile when the day is done is twice as big as Sam's. Should Sally get twice Sam's income? If she does, we have rewarded her luck in having better tools. Is that moral or, efficient?

Suppose Sally is very large and strong and Sam is much smaller and weaker. They have the same tools. They again go into the fields for eight hours. They again work equally hard. They again endure the same conditions. Sally's pile is again twice Sam's. Should Sally get twice Sam's income? If she does, we have rewarded her luck in the genetic lottery: her size and strength. Is that moral or efficient?

Now suppose we compare two people doing mathematics investigations, or creating works of art, or doing surgery, or doing anything else socially desirable. They work equally hard under the same conditions. One has more of some relevant natural talent and the other has less of it. Should the former be rewarded commensurately more than the latter? Clearly, there is no moral reason to do so. Why reward someone for genetic luck on top of the benefits the luck already bestowed them? More controversially and interestingly, there is also no incentive reason to do it. A potential recipient of bounty for innate talent cannot change her natural talent in response to the promise of higher pay. The natural endowment is what it is, and being paid for it won't cause us to change our genes to increase it. There is no positive incentive effect.

But how about education, or learned skills? Shouldn't our improving our productivity be morally rewarded, and also to promote it? That seems reasonable - but not in proportion to the output the education permits, rather in proportion to the effort and sacrifice it required. We should reward for the act undertaken, such as "enduring" schooling. We should provide proper incentive for undertaking that act. But that is very different than looking at lifetime output and saying we will reward in accord with that.

Rewarding Only Effort and Sacrifice!

Suppose we reward effort and sacrifice, not property, power, or output. What happens? Well, if jobs were like now, those doing the most onerous or dangerous or otherwise debilitating work would be highest paid per hour of normal effort. Those with the most comfortable conditions and circumstances would be lowest paid per hour of normal effort.

But shouldn't a surgeon get paid for all those years of schooling, as compared to a nurse or a janitor, say, who has less schooling?

Sure. Whatever the level of effort and sacrifice the years of schooling entailed, the surgeon should be paid for that while schooling herself. Later, the surgeon should be paid in accord with the effort and sacrifice expended at work just like the janitor in the hospital should. In this event, each person should be rewarded according to the same norm - paid according to effort and sacrifice expended at a worthwhile job that contributes to society.

But then no one will be a surgeon, is the reply. Folks will prefer being a janitor.

Why? Imagine you are just out of college. You now have to choose - will it be medical school for six years followed by being a doctor for forty, or would you prefer being a janitor in the local hospital for the full forty-six years. More exactly, how much do you have to be paid to go to medical school instead of being a janitor for the first six years, in light of the quality of life you will have then and later? Or, vice versa, how much would you have to be paid to opt to be a janitor for the first six years rather than to go to medical school? And then, how much would you need to be paid to do either of the jobs as compared to the other for the remaining forty years?

To ask these questions is to answer them and to reveal that the motivational effects of payment according to effort and sacrifice are exactly right if we are discussing a world in which people are free to choose their jobs without encumbrances from history or limiting institutions. Of course not everyone will seek these specific jobs, but the thought experiment is easy to translate to all other realms.

In short, other things equal and all options open, you need and deserve more pay to provide you the incentive to do that which requires greater effort and sacrifice-way more to be a janitor than a student. But you don't need nor do you deserve more pay to do something that is more fulfilling, more empowering, or yields more output, assuming it doesn't require greater effort and sacrifice-you need less to be a doctor than a janitor.

Just Reward is that those who put out more effort and sacrifice at a needed set of tasks for society get more income. Those who put out less for society, get less income. That's the goal we propose for a participatory economy: Just Rewards or payment according to effort and sacrifice.

And what if someone can't exert due to health or other reasons?

Even wage slave economies recognize that in such cases there ought to be remuneration anyway. Reasonable people could differ about how much, of course, but the average income in a just society would seem proper.

And what if someone has some ailment requiring expensive treatments, or suffers some calamity - natural or otherwise, that destroys their holdings?

Of course, a just society addresses these needs socially, insuring against them for everyone, socially, and not leaving individuals to suffer them alone.

And what about children who can't/shouldn't work? Are they dependent on the income of parents so that parents with three children have less per person than those with one child or none?

No, children's income is like that of anyone else who is unable to work, it is average and rewarded socially, simply for being human.

So in light of the above examples, we have a caveat: the goal is Just Rewards, which is payment according to effort and sacrifice or according to need when effort cannot be expended or need is excessive due to disease or other calamity.