Good parents are one kind of luck. Studies have emerged showing that life is easier for beautiful women and tall men who don’t lose their hair. And even if you’re short, bald and unattractive, you can still game the system. We have all had lazy colleagues who have brown-nosed their way to some success, with less merit than us.
Since equality of opportunity is not universal, doesn’t this invalidate — or at least weaken — the romantic notion of meritocratic fairness? Of course not. You’re living in a dream world (or you have tenure) if you really believe merit doesn’t matter. Everyone can think of times when things went well as a direct result of hard work. We can also come up with cases in which we were punished at work or in life for laziness, incompetence, free-riding or stupidity.
And even if only a portion of the outcomes in life were due to merit, we should still gear our system to the part that is under our control. Otherwise, we have no incentive to be industrious, honest, innovative and optimistic — and there’s no reason to teach these values to our kids, either.
Most important, if we reject the ideals of opportunity and meritocratic fairness, we will end up with a system where outcomes are simply based on luck or political power — it would become a self-fulfilling prophecy. In a 2005 study published in the American Economic Review, economists at Harvard University and the Massachusetts Institute of Technology studied 29 countries and showed that a belief in luck over merit was strongly linked to the level of taxation and spending on social programs. Furthermore, they showed that the more citizens believed in a merit-based system, the more their public policies produced such a system.
In contrast, when populations believed that outcomes are a product of luck, birth, connections, or corruption, the people demanded more distortions to the free-enterprise system and ended up with a system that only affirmed their anxieties.
When politicians argue that, for the sake of fairness, we must raise taxes on the entrepreneurial class — and make those “millionaires and billionaires” bring us a few state-subsidized beers on the beach — they are unwittingly undermining the possibility of achieving the opportunity society they regret not having.
We are not a perfect opportunity society in the United States. But if we want to approach that ideal, we must define fairness as meritocracy, embrace a system that rewards merit, and work tirelessly for true equal opportunity. The system that makes this possible, of course, is free enterprise. When I work harder or longer hours in the free-enterprise system, I am generally paid more than if I work less in the same job. Investments in my education translate into market rewards. Clever ideas usually garner more rewards than bad ones, as judged not by a politburo, but by citizens in the marketplace.
There is certainly a role for government in this system. Private markets can fail due to monopolies (which eliminate competition), externalities (such as pollution), the need for public goods (such as education, which is indispensable in an opportunity society), corruption and crime. Furthermore, most economists agree that some social safety net is appropriate in a civilized society. When the government focuses on these things, it assists the free-enterprise system.
But when a government that has overspent for years turns to tax increases instead of spending cuts simply for the sake of “fairness,” it weakens free enterprise, lowers opportunity and impoverishes us in many ways.
And that is simply unfair.
Arthur C. Brooks is president of the American Enterprise Institute and author of “The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America’s Future.” He will be online on Tuesday, April 26, at 11 a.m. ET to chat. Submit questions or comments before or during the discussion.
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