Despite their diverse structures and motivations, all our various forms of social organization aim to achieve the same ideal: meritocracy. Meritocracy is the idea that everyone in a society gets what they merit, or, in other words, what they deserve. Of course, the question of what exactly a person deserves is left deliberately vague in this definition, and how you answer it more or less determines your political philosophy. Some people believe that all human beings merit a basic standard of care and support from their society. Others believe that we deserve only what little joy it is possible to squeeze from the clutching hands of this cold dead world. And yet others believe that our merits can be measured by what our labors earn, or by our contribution to society, or by some other metric. But while they disagree on what it means to deserve something, all these viewpoints agree on the near-tautologous claim that society should be structured such that everyone gets what they deserve. 

With this in mind, let’s turn to consider economics. An economic system is a society’s way of distributing goods and services to its members. This distribution method could take the form of a free marketplace, centralized government distribution, or any number of other options. But no matter which option we choose, the decision is made in an effort to attain a merit-based distribution of goods. As such, economics is intrinsically tied to the idea of a meritocracy, since a good economy is one that distributes goods in accordance with what people deserve, and a bad economy is one that distributes goods to the undeserving while refusing them to those who merit them. It is thus impossible to judge an economic situation or system without also making a judgment, implicitly or explicitly, about who deserves what.

Of course, when people casually talk about the economy, they rarely debate questions of moral deservingness, despite this obvious and intrinsic link between the two. This is because contemporary economics as a discipline has an embedded standard of deservingness that it uses in all its judgements: marketplace competition. In a market economy, success in the marketplace is used to determine the merit of the economy’s members. Turning a high profit is not just good business – in this paradigm it makes you more deserving of society’s goods and services. 

With this implicit value judgment in place, contemporary economics studies the art of making a profit, and labels all discussion of alternative values as ‘political science’, ‘philosophy’, or ‘ethics.’ In doing so, economics ensures for itself a veneer of scientific objectivity by taking for granted a set of unscientific and morally laden value judgements and refusing to consider any debate on those key principles (indeed, all sciences do this, but that’s a topic for another day). This is especially evident if you consider the early history of economics, where, before the field was established in its current course, questions of morality, value, and merit were not uncommon.

Knowing then that marketplace competition is the prevailing standard by which merit is measured in today’s society, we can ask ourselves – is this standard a good one? That is, does it accurately measure human merit? 

The idea of determining merit through competition does have some obvious appeal. After all, the winner of a race deserves a prize for being the fastest. In the context of racing, being the fastest in that particular kind of race is the only merit that matters, and winning proves that you do in fact have that merit and thus deserve the prize. It’s not a wild idea to apply this same model to the competitive marketplace – here, winning a race is selling a product, and the prize is the financial profit you get from doing so. By selling the product, you establish that your product is better, since other people are making a free and uncoerced choice to choose yours over others. Thus the meritocracy of the market ensures that the prize (money, profits) goes to those who are most deserving (those with the best products). As a corollary, those who do not get money must have bad products and are thus undeserving. Overall, the result is an easy and impersonal way to divide the world into winners and losers so that we can all sleep a bit better at night, unbothered by the suffering of others. 

But let’s examine this model a bit more closely. First, note that every competition, if it is to meaningfully measure merit, must have rules. If we have a foot race and you bring a car, you will probably win. But you wouldn’t be deserving of the prize because you cheated. If we apply this logic to the market, the consequence is that if sales and profits are to measure the merit of products, the act of selling must be tightly controlled. Sellers should not be able to lie about their products, for example, or really to use any factors outside the quality of the product to influence a sale. So even if we accept marketplace competition as an accurate barometer of merit in our society, it can only be because of the tight controls put on the market by the government. A totally free market, where people just do whatever they can to make the sale, will only measure people’s ability to lie, cheat, and extort. To ensure that money goes to the best product, we have to make sure that it is the product’s quality alone that impacts the sale, just as it should be footspeed alone that determines the winner of a foot race. 

Similarly, note that every competition only measures the ability of participants to achieve the competition’s goal. In a foot race, the goal is to cross the finish line. How kind a person you are, your contribution to society, or how good you look – none of those things matter. They simply don’t enter into the equation if we are thinking about who deserves the race’s prize.

If you bring this observation to the market, this means that a system that uses profits and sales as its measure of merit will exclude all other factors. Being kind, being a good person, supporting the welfare of others, none of it matters unless you can sell it. These factors simply aren’t part of the market-based measure of merit. Instead, goods and services are deserved by those most able to part others from their money. All other factors can at best contribute to that skill, but have no value in themselves. From this perspective, when people say “it’s just business” they aren’t talking about some subset of their lives – they’re talking about their whole life. If we measure merit using the competitive marketplace, then business, and success in it, is the only thing that determines human worth.

Next, let’s take this footrace analogy and stretch it out a bit across time. After all, if we see every sale as a race, then in a real market people are running hundreds of races a day. But there is an important difference between foot races and sales. Foot races are essentially independent events in that winning one doesn’t really give you much advantage in the next one. But this isn’t the case in the market. There, the money from one sale allows you to reinvest in your product so that the next sale comes easier. Or it lets you take a loss on the next sale so that you can undercut your competition to win a repeat customer. It’s as if every time you win a race, you get a head start in the next one. If we kept racing like that, pretty soon there’d only be a handful of people who could meaningfully expect to win, and the race would be over for everyone else before it even begins. In the real world we see exactly this happening in the form of wealth inequality, the accumulation of capital in fewer and fewer hands, and the tendency toward monopoly that has plagued capitalism since the time of Adam Smith. WIth regard to market competition as a measure of merit, this means that the race to sell almost immediately becomes an unfair one, and thus a poor metric to use in measuring human worth.

And it’s not just a matter of getting a head start. If you have enough money you can start bribing the judges or talking to organizers to change the rules of the race. And indeed you have every motivation to do so since all that matters, the only measure of human merit, is this specific race. If changing the rules helps you win, then it increases your merit – a win is a win and it’s not cheating if you make the rules. This of course correlates with the intrinsic tendency of capital to influence and infiltrate government. Every business, just like every voter, has a vested interest in the rules of the race they spend all day running, and they will do their best to get those rules changed to favor them. It’s just that some businesses have a lot more money and power than others and so can be more successful, thus ensuring that their product sells more and creating an unfair environment for others.

What all this amounts to is simple: the distribution of goods and services through marketplace competition fundamentally fails to create a genuine meritocracy. It fails not due to abstract considerations of morality, but on its own terms. There is no intrinsic connection between high sales and a good product – it is up to strict regulations to create this connection. And even if such a connection is created, over time high sales lead to unfair competition and manipulation of these regulations to favor whoever happens to have made the first set of high sales. Marketplace competition creates deeply unfair competitive environments that cannot be seen as effective arbiters of merit. At best, they require constant vigilance by governments, especially since all participants are motivated to undermine and manipulate the government itself. 

But deeper than all this, the fact is that we as human beings are more than mere producers, whose lives can be valued by the quality of our products. A competitive marketplace for goods and services simply fails to motivate or measure real human virtue, instead promoting deception, manipulation, and anything that helps make a buck. So next time you hear that the economy is good I hope you will take a moment to ask yourself: can any competitive market economy truly be a good one?