Wednesday, August 11, 2004

Why We Deserve What We Earn

I'm lucky because I have a high IQ. I didn't earn it, it just happened to me. So what? I had to do something with it, right? I did do something with it, but not as much as I could have because I couldn't take the stress that's required to be truly rich and/or politically powerful. So I kicked back a bit, made a good living, and retired to a comfortable but far from lavish existence.

There are many, many, many people whose IQs are lower than mine but who have earned far more than me and who live far more lavishly than me. Do I begrudge them their earnings and lavish living? Not a bit. Not even dumb-as-doorknob Hollywood liberals whose idea of an intellectual conversation is to tell each other that Bush is a Nazi.

By the same token, there are a lot of people whose IQs are higher than mine, and I'm willing to bet that some of them didn't do as well financially as I did. So what? Should they have done better than me just because they have higher IQs? I don't know where that rule is written. I'll bet that there's not a Democrat to be found who would subscribe to it.

Everyone deserves what they earn as long as they earn it without resorting to fraud, theft, or coercion. Members of Congress, by the way, resort to coercion when it comes to paying themselves. Yes, there's the constitutional provision that congressional raises can't take effect until the next session of Congress, but incumbents are almost certain of re-election, and most incumbents run for re-election. So the constitutional provision is mere window-dressing.

Back to the topic at hand. Tell me again why I am where I am because of luck. I had to do something with my genetic inheritance. I did what I wanted to do, which wasn't as much as I might have done. Others, less "lucky" than me did more with their genetic inheritance. And others, more "lucky" than me did less with their genetic inheritance.

Well, I could go on in the same vein about looks, athletic skills, skin color, parents' wealth, family connections, and all the rest. But I think you get the picture. "Luck" is a starting point. Where we end up depends on what we do with our "luck".

Not so fast, you say. What about family connections? Suppose Smedley Smythe's father, who owns General Junk Food Incorporated, makes Smedley the CEO of GJFI and pays him $1 million a year. If Smythe senior is the sole owner of the company, that's his prerogative. The million is coming out of his hide or, if consumers are willing to pay higher prices to defray the million, out of consumers' pockets. But no one is forcing consumers to buy things from GJFI; if its prices are too high, consumers will turn elsewhere and Smythe senior will rue his nepotism. Suppose GJFI is a publicly owned company? In the end, it amounts to the same thing; if the nepotism hurts the bottom line, its shareholders should rebel. If it doesn't, well...

Now what about those who are born poor, who aren't especially bright, good looking, or athletic, and who are, say, black rather than white. Do they deserve what they earn? The hard, cold answer is "yes" -- if what they earn is earned without benefit of fraud, theft, or coercion. Why should I want to pay you more because of the circumstances of your birth, your IQ, your looks, your athleticism, or your skin color. What matters is what you can do for me and how much I am willing to pay for it.

But what about people who are poor because they have been unable to "rise above" their genetic inheritance and family circumstances. What about those people who are poor because they have incurred serious illnesses or have been severely injured? What about those people who didn't save enough to support themselves in their old age? And on and on.

Those are hard questions. Such people may be helped, privately, out of compassion or duty or guilt. Such people may be helped through coercive government programs that draw on compassion, duty, guilt, and large measures of political opportunism and economic illiteracy. But the fact that they are helped in no way negates the truth that -- except for criminals and Congress -- we deserve what we earn.

(Inspired by Will Wilkinson's Tech Central Station article, "Meritocracy: The Appalling Ideal?".)