Elena Granaglia | Structural Change and Economic Dynamics
Justifications of market inequalities can appeal to several values. The main ones include efficiency, freedom, and meritocracy. This article focuses on meritocracy and highlights three limits of the meritocratic justification of market inequalities. First, markets cannot be meritocratic: if we abandon the simple economies of independent producers and homogeneous goods, market competition is inevitably lacking, giving rise to non-meritocratic rents. Second, market evaluations of merit present some ethical shortcomings, even if competition could unleash. Third, rewarding merit, no matter where this principle is applied, underrates the element of luck that is present in the individual merit as well as some undesirable consequences of meritocratic rewards. Acknowledging these limits does not deny that merit may have some role in justifying market inequalities. It means, however, to abandon the meritocratic justification.