Hi 4321,
I wholly agree with what was once called the Protestant work ethic. People ought to work, if they can and jobs and/or capital are available to them.
Even so, the equation which imputes outcomes as the controlled consequence of one's own inputs breaks down in the face of reality. In fact, results are often only loosely related to one's efforts, just as demand is independent of supply.
1. We depend upon shared social goods to achieve success. So we rely upon the extent to which these are available. A haulage business wouldn't do too well in the absence of public highways. A bank wouldn't be too efficient if there was no money to exchange or save.
2. Luck is every bit as important an actor as hard work in the world's economic drama. I daresay Bill Gates would have done less well if he had been born into a Yanomamo culture.
3. Surely, no one can pretend that markets operate perfectly. So the "all things being equal" qualification in microeconomics is surely the most important thing in the discussion. Incumbents influence governments so that markets are tilted in their favour.
4. Not all costs are borne by the people that should bear them. The coal industry externalises its pollution effects which gives it an apparent advantage over cleaner forms of energy - this enriches the owner of the mine at the expense of society.
5. Where capital is scarce, owners of capital are able to extract terms which only seem fair as a result of the scarcity of competing resources. In a society characterised by highly concentrated wealth, it is really hard for innovators to break through because the cost of capital is extremely high.
etc.
Once you understand that - in reality - markets are not efficient allocators of resources in the way that classical economists have defined them - which should be blindingly obvious after the tech bubble and the property market failure - then you kinda have to follow the logic towards the conclusion that rewards aren't "just" merely because they occur as they do.
It's our job to soften the edges of the inequities which the market generates. This doesn't remove the obligation to work hard. It doesn't say that successful folks shouldn't retain a good sized chunk of what they earn. It doesn't mean we should conclude absolute equality is the best policy. It just says: make the disparity between success and average income slightly less extreme. Acknowledge that we owe something to society - something which isn't called charity, but is in fact an obligation which we discharge via progressive taxes.
Society educates its children through public programs on the assumption that when those children become adults, they will support their elders. The notion that what I make belongs entirely to me ignores the fact that we are all products of a society which invested in us.
Whereas what we have seen for the last thirty years in particular is the increasing concentration of wealth amongst folks who - in many instances - have achieved this by influencing government policy. Or perhaps they have been lucky, or whatever. One way or another, they like to think they earned what they have as a result of their independent effort and little else; and they don't want to pay out their wealth in taxes to help support the next generation, or those who have been less fortunate or the people who end up with emphysema because the air's no good.
OWS reflects upon this concentration of wealth and says - it must stop. I agree with them. Not just because it is immoral. Not just because it is no reflection of a single person's efforts. But also because concentration of wealth is inefficient.
I want kids to get educated and entrepreneurs to be able to save enough that they can start their own businesses. This is how society continues from one generation to the next. In the absence of this, in the end a society will collapse.
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