Saving Capitalism: For The Many, Not The Few

by Robert B. Reich

People are “worth” what they’re paid in the market in the trivial sense that if the market rewards them a certain amount of money they must be. Some confuse this tautology for a moral claim that people deserve what they are paid. One of the most broadly held assumptions about the economy is that individuals are rewarded in direct proportion to their efforts and abilities—that our society is a meritocracy.2 But a moment’s thought reveals many factors other than individual merit that play a role in determining earnings—financial inheritance, personal connections, discrimination in favor of or against someone because of how they look, luck, marriage, and, perhaps most significantly, the society one inhabits. “If we are very generous with ourselves,” economist Herbert Simon once said, “I suppose we might claim that we ‘earned’ as much as one fifth of [our income]. The rest is the patrimony associated with being a member of an enormously productive social system.”