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Merit, taxes and pornography

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Why meritocracy could be bad news for hotties

Merit is often defined as ability plus effort. But it has to be more than this. There are always hardworking people like avant garde artists who claim that their talent isn’t recognised by others. So the usual proviso is that merit requires a person to apply their ability and effort to achieving things other people value.

Market-loving meritocrats are wary of getting too moralistic about the definition of merit. They don’t like to make judgments about the relative values of abilities. So when people claim that teachers and nurses make more of a contribution to society than telemarketers, junk food advertisers or arms dealers, meritocrats insist that value must be expressed through market prices. If people will pay for something in the market, then that something has value.

In a strict meritocracy it’s impossible to justify inherited wealth. People are meant to earn their rewards and everyone is supposed to get an equal start in life. But preventing people from leaving their family heirlooms, book collections, and homes to their children would be draconian. In any case many of these things have sentimental value rather than market value. So the most workable compromise is a tax on unearned assets. Share portfolios, business assets, and investment properties can all be taxed at their market value. The unmerited advantages of inheritance are reduced but not eliminated.

One of the advantages of a tax on unearned wealth, according to supporters, is that it forces people to put their assets to use for purposes that other people value. If you inherit a stately home, you might be forced to borrow against its value in order to keep it. And to pay off the mortgage you might convert it to conference centre or boutique hotel. The result is a net gain to society.

But if it’s unfair for some people to inherit physical and financial capital why is acceptable for them to inherit human capital? As Friedrich Hayek noted, "A good mind or a fine voice, or a beautiful face or a skilful hand, and a ready wit or an attractive personality are in a large measure… independent of a person’s efforts…" Milton Friedman agreed. He argued that we should treat inherited ability in the same way as we treat inherited property (he didn’t think we should tax either of them).

While some talents are developed through effort and sacrifice, many are not. Not everyone can be a super model, an elite athlete or a chess grand master. Hard work only goes so far. So it follows that if we have a tax on unearned wealth then we ought to have a tax on unearned ability too. And, the same principle would apply about the incentive to put assets to good use.

However, since we’re not being moralistic about merit, this means that any ability which has value in the market should attract a tax. And this includes the ability to turn physical attractiveness into income through activities like pornography and other services in the sex industry. A hot body is a valuable asset in the sex industry. It’s worth money. So too are some physical abnormalities that are appreciated by fetishists (but let’s not go there).

So imagine an otherwise untalented young woman with a highly marketable physique. If the sex industry is doing well and her physical attributes are in short supply then her body should attract a large tax. This will give her two choices. She can enter the sex industry and pay off the tax with her earnings, or she can withhold her inherited assets from society and pay the tax by living in poverty.

Meritocracy suffers from the same problem as other social justice principles like equality. If governments try to enforce them across society as a whole they will end up interfering with individual freedom. As many thinkers have noted, it’s not possible for a free market to be a socially just institution — it can only ever be a procedurally just institution. Free exchange will always disrupt any patterned distribution. A government that tried to dictate socially just outcomes couldn’t avoid interfering in people’s life choices.

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Written by Admin

April 22, 2006 at 5:15 pm

Posted in Uncategorized

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