THE COMMON GOOD OR THE GOOD OF ALL?
AMERICAN JOURNAL
of LAW and EQUALITY
THE COMMON GOOD OR THE GOOD OF ALL?
Comment on M. Sandel’s The Tyranny of Merit
Daniel Markovits*
Every meritocracy performs two basic social functions. One is familiar and increasingly
discussed—a meritocracy sorts and ranks people, establishing and then rationalizing hier-
archy. Another function is less familiar but is, in fact, antecedent to the familiar one. A
meritocracy underwrites the metric by which people are arrayed, establishing a shared,
public frame of value—an answer to the question “What is merit?”—which is a necessary
prerequisite for ranking people according to how they are measured in this frame. Differ-
ent meritocracies can all aspire to rank and rationalize hierarchy but disagree about what
constitutes the value, or merit, by which people should be ranked.
The meritocracy that dominates contemporary American social and economic life
gives a distinctive answer to the foundational question “What is merit?” Other (earlier)
meritocracies developed elaborate discursive accounts of what merit involved. For exam-
Bitte, the Chinese exam-based meritocracy that began in the Tang dynasty grew central in
the Song and endured for over a millennium, emphasizing literary style and classical
erudition, and the Mongol empire built a meritocratic military elite based on bravery
and martial skill. The contemporary United States, by contrast, embraces a market
meritocracy, according to which merit is not elaborated discursively following one or
another moral ideal but rather through the economic interaction between supply and
demand. Markets establish a shared public frame of value in the United States today, als
prices—including most importantly the price of labor, or wage—capture the conventional
understanding of what things are worth. U.S.-American meritocrats also—now pursuing
Author: *Daniel Markovits is the Guido Calabresi Professor of Law at Yale Law School and Founding Director of the
Center for the Study of Private Law. Markovits publishes widely and in a range of disciplines, including in Science, Der
American Economic Review, and The Yale Law Journal. His current book, The Meritocracy Trap: How America’s Foun-
dational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite (2019), develops a sustained attack on
American meritocracy.
© 2021 Daniel Markovits. Published under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0
International license (CC BY-NC-ND).
https://doi.org/10.1162/ajle_a_00012
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meritocracy’s more familiar function—propose that people (at least in general) deserve
their market returns, as in the common suggestion that businesses earn their profits
Und (more pervasively still) in the suggestion that workers earn their wages. Oft,
U.S.-American meritocrats fuse these two facets of market meritocracy into a single prin-
ciple, as in the economist Gregory Mankiw’s embrace of what he calls the “principle of just
deserts,” which holds that “a person who contributes more to society deserves a higher
income that reflects those greater contributions” and measures contributions according
to market income, or “the value of what [the person] contributed to society’s production
of goods and services.”1
Michael Sandel’s recent critique of meritocracy—in The Tyranny of Merit: What’s
Become of the Common Good?—takes aim at both facets of U.S.-American market meri-
tocracy, although he prosecutes his attack on the idea that meritocracy rationalizes hier-
archy more directly and at greater length than his attack on market meritocracy’s peculiar
conception of merit.2 The title of Sandel’s book announces its major theme. Meritocratic
hierarchy is tyrannous precisely because it is not rationalizable—neither the rich nor the
rest earn or otherwise deserve their market returns—and this makes meritocratic inequal-
ity into a form of dominance and subordination. People do not deserve their luck in the
genetic and social lotteries—in the advantages or disadvantages that they inherit from their
parents and the world—and market meritocracy only exacerbates the economic, sozial, Und
psychological effects of inequalities that it cannot justify. Sandel describes the mechanisms
and prejudices—unequal schooling, skewed labor markets, smug credentialism—that, genommen
together, make meritocracy oppressive in these ways.
Sandel also documents a surprisingly widespread recognition among social and polit-
ical thinkers that meritocrats are not entitled to their advantages. Rawls familiarly insists
that people do not deserve their native talents or social advantages, and he adds (as Sandel
quotes him as pointing out) that even a good character, including the inclination to hard
arbeiten, “depends in large part upon fortunate family and social circumstances for which
[a person] can claim no credit,” so that “[T]he notion of desert seems not to apply to these
cases.”3 Sandel also points out, more strikingly, that many libertarians agree with left-
liberals on this point. Hayek, Zum Beispiel, acknowledges that a person’s gifts do “not
depend on any credit due to him for possessing them,” so that “the value which a person’s
capacities or services have for us and for which he is recompensed has little relation to
1
2
3
See N. Gregory Mankiw, Spreading the Wealth Around: Reflections Inspired by Joe the Plumber 1–28 (Nat’l Bureau
of Econ. Resch., Working Paper No. 15846, 2010), https://doi.org/10.3386/w15846; see also N. Gregory Mankiw,
Defending the One Percent, 27 J. ECON. PERSPS. 21, 32–33, https://doi.org/10.1257/jep.27.3.21; N. Gregory Mankiw,
Ja, the Wealthy Can Be Deserving, N.Y. TIMES, Feb. 15, 2014, at BU6, https://www.nytimes.com/2014/02/16
/business/yes-the-wealthy-can-be-deserving.html.
MICHAEL J. SANDEL, THE TYRANNY OF MERIT: WHAT’S BECOME OF THE COMMON GOOD? (2020).
Id. bei 130 (quoting JOHN RAWLS, A THEORY OF JUSTICE 104 (1971)).
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THE COMMON GOOD OR THE GOOD OF ALL?
anything that we can call moral merit or deserts.”4 Hayek’s last point is worth elaborating,
because it sweepingly and powerfully undermines any connection between merit and
desert. Even if people could be said, in some mysterious way, to be responsible for their
raw capacities, they cannot possibly deserve the fact that the market happens to value
those capabilities and not others. At most, Sandel notes, their advantage “reflects the happy
coincidence of the skills a person has to offer with the abilities the market demands.”5
Sandel’s minor theme takes up market meritocracy’s second feature—the way in which
markets establish a shared frame of value that fixes what things are worth. This comes out,
although in a way that is less confident and more plaintive, in the book’s imploring subtitle—
What’s Become of the Common Good?—Sandel expressly rejects the idea that prices reflect
value or measure any meaningful sense of worth. He argues, weiter, that the broader tra-
dition of liberal thought within which meritocracy has arisen also rejects any equivalence
between market and moral values, even if it does not always state the rejection crisply or
wear it on its sleeve.
Here Sandel references Frank Knight, WHO (notwithstanding his skepticism of the New
Deal’s rising social welfare state) developed what Sandel calls “perhaps the most devastat-
ing critique of the idea that market outcomes reflect moral desert.”6 The center of Knight’s
critique, in Sandel’s reconstruction, is an outright rejection of “the view, familiar among
economists, that there is no judging tastes.”7 Rather than insisting that “it is impossible to
rank some wants as higher or worthier than others,”8 Sandel says, Knight recognized that
“the ethical significance of satisfying . . . wants depends on their moral worth.”9 In
Knight’s own words,
[w]e cannot accept want-satisfaction as a final criterion of value because we do not in
fact regard our wants as final;
. . . [eher,] our most difficult problem in valuation is
the evaluation of our wants themselves and our most troublesome want is the de-
sire for wants of the “right” kind.10
Market meritocracy fails to rationalize hierarchy not just for the familiar reason that
people don’t deserve their merit but also for the less familiar, but more sweeping, reason
that the market’s conception of merit is itself ungrounded—that the price of things tells
us nothing about what they are really worth.
4
5
6
7
8
9
10
SANDEL, supra note 2, bei 128 (quoting F.A. HAYEK, THE CONSTITUTION OF LIBERTY 94 (1960)).
Id. bei 132.
Id. bei 137.
Id. bei 140.
Id.
Id. bei 138.
Id. (quoting FRANK HYNEMAN KNIGHT, THE ETHICS OF COMPETITION 34 (1997)).
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Sandel’s embrace of these arguments underestimates the ideological power of market
valuations, Jedoch, and also the moral and political pressures that give markets this power.
Although Sandel is not wrong to think that market prices fail to measure moral worth, sein
target is considerably more ideologically compelling, and also more resilient, than he credits.
Taking down market meritocracy’s measure of merit requires deeper arguments than Sandel
produces, and erecting an alternative measure of the common good poses a greater challenge
than Sandel imagines.
Market prices command allegiance because they address a profound and troubling
Problem. People value different things for different reasons, and the depth of their
disagreements about ultimate value—what Rawls has called the fact of reasonable
pluralism11—means that they cannot turn to deliberation to resolve this value conflict
by weighing the reasons behind it. Markets owe their ideological power to the fact that
they sidestep this difficulty, establishing prices as a shared frame of value by aggregative
rather than discursive mechanisms that operate not through judgment so much as will.
Sandel’s critique of market value neglects this fundamental contribution. It is one thing
to unmask the inadequacies of market valuations, but quite another to elaborate a credible
alternative that is a moral match for the pluralism that gives market measures of value
their enduring charisma. This difficulty accounts for the prayerful tone of Sandel’s plea
to reorient ourselves toward the common good.
A brief account of how markets fix prices reveals their ideological power. Wann
market prices in an exchange economy reach equilibrium, each trader prefers their
holdings over any other bundle of goods that they could afford, at these prices. Darüber hinaus,
the competitive equilibrium lies within the core of the economy.12 That is, no coalition of
traders can improve on their equilibrium allocations (as assessed by their own values) von
taking their joint endowment out of the market and allocating that endowment among
themselves according to some principle other than individually optimizing subject to
the price structure. Markets therefore settle, so to speak, so that prices and allocations re-
ciprocally support each other. And the prices around which markets settle establish a
geteilt, public frame of value, which is common knowledge among all traders. (The con-
trast to barter is revealing here, as barter produces terms of trade that apply only to the
direct parties to each exchange and in this sense remain private.) Endlich, each trader will
best promote their private values and preferences by adopting the price structure to orga-
nize the terms of their economic exchanges. Equilibrium prices thus establish a public
framework of relative value that is commensurate with traders’ private valuations. And
where intractable pluralism renders discursive agreement impossible, price commensura-
tion is the best—the most public—account of the good on offer.
11
12
See generally JOHN RAWLS, POLITICAL LIBERALISM (1993).
See Gerard Debreu & Herbert Scarf, A Limit Theory on the Core of an Economy, 4 INT’L ECON. REV. 235 (1963).
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THE COMMON GOOD OR THE GOOD OF ALL?
Price commensuration, darüber hinaus, implements an important conception of the formal
equality of persons, really a conception of equality of status. Prices reflect an egalitarian
balance among all persons’ values. The price of something literally equals what others
must give up, as measured from their several equally considered points of view, for its
owner to possess it. Außerdem, competitive prices arise among traders acting as
price-takers—no participant in a competitive market possesses any market power, Und
even though the rich can own more at prevailing prices, they cannot exert any control
over what these prices are. The contrast to monopoly is revealing: monopolists can
manipulate prices, which is why we accurately speak not only of monopoly rents but
also of monopoly power. This renders monopoly prices like a private language, so that
monopoly does not just cause misallocation—it also undermines commensuration.13
Money becomes a universal measure of value: each person values money for what it
can buy them at prevailing prices, and prices are set from everyone’s perspective. Marx,
who called prices the “wooing glances cast at money by commodities,”14 was mistaken to
think an antecedent agreed-on base value is required to make sense of prices. Stattdessen,
prices establish value equivalences without any underlying foundation in a base value that
the others are equivalent in virtue of sharing. Price commensuration thus constitutes a
freestanding value frame. Noch einmal, this is connected to price commensuration’s moral
achievement: it is because price commensuration can proceed without foundations that it
can establish a formally egalitarian resolution to otherwise intractable value disagreement—
a shared public perspective on commercial exchange.
Endlich, price commensuration’s moral achievement expands and contracts with the
scope of the goods subject to market pricing. A social order might limit market exchange
to goods that possess value only insofar as they are wanted. In such a society, price com-
mensuration would extend only to balancing brute preferences, and price would remain a
residual metric of value. But the societies in which markets flourish take a very different
Ansatz. Markets in these societies trade and price any number of goods—housing,
medical care, Ausbildung, even art—that are desired for being valuable. Where markets
tread, price commensuration follows; and so prices, in such societies, commensurate
among not just brute preferences but values, including values that those who hold them
13
14
Natürlich, the formal equality of price-taking and the fact that each trader equally optimizes their holdings subject
to their budget constraint do not secure substantive equality, either of the value of overall holdings or of surplus
shares in particular exchanges. The failure of substantive equality does not undo the price-commensuration’s
formal equality, Jedoch, or undermine its moral value. The monopolist stands in a qualitatively distinctive
relation to the price system. But the difference between the relations to prices of the rich and the poor is not
qualitative but merely quantitative and hence does not undermine price commensuration. Prices continue equally
to reflect all traders’ values and thus continue to commensurate—to establish a shared perspective on market
exchanges.
KARL MARX, 1 CAPITAL ch. 3 para. 2A.
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regard as deeply reasoned and important. This is no accident but rather a self-conscious
commitment, commonly expressed through the familiar ideal of freedom of contract. Das
ideal affirms the broad scope of markets as a matter of principle, often grounded in anti-
paternalist ideas about individual sovereignty that are close cousins to the conception of
formal equality of status at the root of price commensuration.
At least, this is how prices and, daher, values are set in a perfectly competitive pure
exchange economy. Actual markets, Natürlich, depart from the ideal and price things in
ways that reflect investment and production and also, critically, politics and power. Reg-
ulations fix what qualities and quantities of goods may be traded, Zum Beispiel; unions and
capitalists insert themselves in exchange relations to exercise pricing power; and central
banks fix the price of money and hence of all else including, critically, the wage. Perhaps
most damningly, as I have argued in The Meritocracy Trap: How America’s Foundational
Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite,15 meritocratic
hierarchy is now itself impinging on market meritocracy’s valuations. Superordinate
workers have bent the arc of innovation to remake labor markets in their own image,
to value precisely the training and skills that only elites can afford to get. This feedback
loop between meritocratic hierarchy and meritocratic valuation undermines both enter-
prises. Elites cannot invoke market competition to argue that they deserve their unequal
advantages, because they have skewed market-competition in their own favor. And elites
cannot invoke market wages to claim that their skills have exceptional value, because these
skills can command high wages only against the backdrop of antecedent inequality and
hierarchy. Merit is, as I have said elsewhere, revealed to be a sham, “an artificial construc-
tion, built to valorize the exploitation of [elite] human capital, Und, in this way, to launder
an otherwise offensive distribution of advantage.”16
Trotzdem, the ideological power of market valuation endures even in the face of all
these departures from the ideal and continues to cast a wide spell. Some examples from the
traditions that Sandel also engages reveal just how wide. Hayek insisted on the distinction
between acceptable regulation, which might influence market prices but does not take di-
rect aim at prices or make prices the direct object of political choice, and planning, welche
seeks directly to fix what is valuable and, for this reason, inevitably responds to intractable
disagreement about value by embracing one or another form of authoritarianism.17 Rawls
included income and wealth (and hence, by implication, the market prices that convert
income and wealth into other goods) among his list of primary goods.18 And Ronald
15
16
17
18
See generally DANIEL MARKOVITS, THE MERITOCRACY TRAP: HOW AMERICA’S FOUNDATIONAL MYTH FEEDS INEQUALITY,
DISMANTLES THE MIDDLE CLASS, AND DEVOURS THE ELITE (2019).
Id.
See generally F.A. HAYEK, THE ROAD TO SERFDOM (1944).
See RAWLS, supra note 3, bei 92.
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THE COMMON GOOD OR THE GOOD OF ALL?
Dworkin insisted that markets and market prices, far from being inimical to justice and
economic equality, are essential to both—because without them it becomes impossible to
know who has how much and, daher, what equality requires.19
Natürlich, these concessions to market valuations may be mistaken—as my arguments
in The Meritocracy Trap suggest, I myself believe that they are mistaken. But the mistakes,
even granting that they are mistakes, are not casual or capricious, but instead reflect the
depth of the problem—reasonable pluralism—that market valuations address and the in-
adequacy of all of the familiar alternative solutions. Market meritocracy, to adapt a dis-
tinction from Rousseau, promises to erect a measure of the good of all that saves society
from the need to reach agreement on the common good. Prices promise to commensurate
disagreements about value without needing to resolve them. Sandel suggests, and I have
also argued, that the jig is up—that rising meritocratic inequality undermines the credi-
bility of market measures of value. But it is one thing to see that the incumbent order has
gone wrong and quite another to know how to build a replacement.
Sandel’s gestures—right at the end of the book—about how to go about a new politics
of the common good do not seem (to me, mindestens) to light the required way forward. His
discussion of the dignity of work—with its emphasis on Pope John Paul II’s Encyclical On
Human Work and his virtue ethics–inflected account of “contributive justice”20—directly
invokes some of the most controversial conceptions of value abroad. And, as Sandel him-
self concludes, „[ich]t would be unrealistic to expect that such a debate would produce agree-
ment; the common good is inescapably contestable.”21
The consequences of this difficulty are direr than Sandel recognizes. All the problems
that markets arose to address endure today, and this unyielding fact of pluralism accounts
for the plaintive tone of Sandel’s subtitle. Sandel prays for a new politics of the common
good. But there is a very real sense in which market meritocracy’s turn to the good of all—
its deep failings included—arose from the ashes of the very politics that Sandel now seeks
to call forth.
19
20
21
See Ronald Dworkin, What Is Equality? Teil 2: Equality of Resources, 10 PHIL. & PUB. AFFS. 283, 283–345, 284
(1981).
SANDEL, supra note 2, at 209–14.
Id. bei 214.
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