Merit and the marketplace, free choice etc

Horwitz has an article on the “myth of merit”

In his various chapters and essays on the “mirage” of the concept “social justice,” F. A. Hayek makes a claim that is very often overlooked by those who support the market. He argues that markets generally do not reward “merit.” That is, the people who become wealthy in the marketplace do not do so, for the most part, because they are somehow “better” people than those who are not as wealthy. The wealthy are not necessarily more intelligent, more moral, or even harder-working than the rest of us. However meritorious we think those attributes are, they are not what the market rewards. The market rewards the creation of value in the form of providing goods and services that other people want. Period, end of sentence.

Paraphrasing one of my comments, the free market is not a meritocracy.

O&M has a post on “cognitive dissonance.”

[Chen] basically demolished 45 years of experimental results in social psychology that claim to have discovered cognitive dissonance in choices. According to this literature, it is among the best-documented results in psychology that people change their preferences after making a choice so as to rationalize the choice and make themselves feel better about their decision. Chen argues — persuasively — that essentially all these results are statistical artifacts. At a much more sophisticated level, social psychologists have fallen victim to the igon value effect.

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  • Varuna  On November 21, 2009 at 11:34 am

    This is so true, and I have often marvelled at it and at the fact that even a village idiot somehow manages to earn a living. But people are so impressed by money and by those who earn a lot of it that somehow the myth never dies. Money confers status. And people are just not willing to believe that the rich man might be an idiot in many ways. Conversely that there might be truly intelligent, gifted people who somehow lack the talent to earn money. We despise poverty and the poor man.

    • Aristotle The Geek  On November 22, 2009 at 1:01 am

      # “We despise poverty and the poor man.”
      I won’t go that far.

      This article is meant as a warning to those free marketers who try to defend the market on the grounds of merit, just like those who protest against quotas on similar grounds. A wants something, B provides it to him and collects his payment. That is all there is to the market.

      And yes, not all gifted/ talented people roll in money. They may be talented in other ways, but not in the art of making money, meeting the needs of the consumer. This reminds me of that man without a name, from The Fountainhead, Henry Cameron’s agent. He died, and Cameron lost everything. His talent didn’t save him from destruction.

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