Between market and merit : how unequal should incomes be?
The distribution of the benefits from co-operation represents one of the central problems of distributive justice. At the core of my thesis stands an argument based on the division of labour in our society that calls for an equal division of these benefits. This line of reasoning avoids the shortcomings of the two traditional approaches pursued by those who are critical of income inequalities, namely egalitarians and their more sophisticated cousins, liberal egalitarians. Straightforward egalitarianism, I suggest, turns out to be a default position once other considerations, like choice or merit, are taken into account. My disagreement with the liberal egalitarian centres on the question whether the scope of justice should encompass natural and social contingencies like talent or family background. I argue that the impact of these endowment factors on income distribution, though undeniable, is small compared to the influence of the market system in distributing income. This position also puts me at odds with libertarians, who accept the normative authority of the market distribution. Enter the argument from division of labour. The specialisation it entails leads to a surge in individual productivity and a substantial surplus compared to the counterfactual situation of autarky. On the plausible assumption that the interdependence between the parties to the division of labour is mutual, there is a case for dividing the surplus equally. This argument, so my claim goes, severely limits the scope of the central libertarian tenet of self-ownership. In practice, surplus is produced and distributed at various levels of co-operation; my focus lies on the economy as a whole, the firms that operate in it, and the insights from imperfect competition about the connection between these two levels. I close with some considerations about the transformation of unjust distributive structures.