F. Hayek, Reward according to merit is impossible

The inborn as well as the acquired gifts of a person clearly have a value to his fellows which does not depend on any credit due to him for possessing them. There is little a man can do to alter the fact that his special talents are very common or exceedingly rare. A good mind or a fine voice, a beautiful face or a skilful hand, and a ready wit or an attractive personality are in a large measure as independent of a person’s efforts as the opportunities or the experiences he has had. In all these instances the value which a person’s capacities or services have for us and for which he is recompensed has little relation to anything that we can call moral merit or deserts.

Our problem is whether it is desirable that people should enjoy advantages in proportion to the benefits which their fellows derive from their activities or whether the distribution of these advantages should be based on other men’s views of their merits.

Reward according to merit must in practice mean reward according to assessable merit, merit that other people can recognize and agree upon and not merit merely in the sight of some higher power. Assessable merit in this sense presupposes that we can ascertain that a man has done what some accepted rule of conduct demanded of him and that this has cost him some pain and effort. Whether this has been the case cannot be judged by the result: merit is not a matter of the objective outcome but of subjective effort.

The attempt to achieve a valuable result may be highly meritorious but a complete failure, and full success may be entirely the result of accident and thus without merit. If we know that a man has done his best, we will often wish to see him rewarded irrespective of the result; and if we know that a most valuable achievement is almost entirely due to luck or favorable circumstances, we will give little credit to the author.

We may wish that we were able to draw this distinction in every instance. In fact, we can do so only rarely with any degree of assurance. It is possible only where we possess all the knowledge which was at the disposal of the acting person, including a knowledge of his skill and confidence, his state of mind and his feelings, his capacity for attention, his energy and persistence, etc. The possibility of a true judgment of merit thus depends on the presence of precisely those conditions whose general absence is the main argument for liberty.

It is because we want people to use knowledge which we do not possess that we let them decide for themselves. But insofar as we want them to be free to use capacities and knowledge of facts which we do not have, we are not in a position to judge the merit of their achievements. To decide on merit presupposes that we can judge whether people have made such use of their opportunities as they ought to have made and how much effort of will or self- denial this has cost them; it presupposes also that we can distinguish between that part of their achievement which is due to circumstances within their control and that part which is not…

Not only would it be impossible for us to reward all merit justly, but it would not even be desirable that people should aim chiefly at earning a maximum of merit. Any attempt to induce them to do this would necessarily result in people being rewarded differently for the same service. And it is only the value of the result that we can judge with any degree of confidence, not the different degrees of effort and care that it has cost different people to achieve it…

A society in which the position of the individuals was made to correspond to human ideas of moral merit would therefore be the exact opposite of a free society. It would be a society in which people were rewarded for duty performed instead of for success, in which every move of every individual was guided by what other people thought he ought to do, and in which the individual was thus relieved of the responsibility and the risk of decision. But if nobody’s knowledge is sufficient to guide all human action, there is also no human being who is competent to reward all efforts according to merit.

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