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It’s about Value

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I know a couple of those assholes.

Steve Horwitz

One way classical liberals have done ourselves no good is to talk about market economies as if they were some sort of meritocracy where people with more skill, or better values, or who work harder get rewarded for it. The worst version is to blithely associate being rich with moral merit.

This is completely wrong, and dangerously so. The best discussion of this might still be in chapter 6 of Hayek’s *Constitution of Liberty*.

Markets do not reward “skill.” They don’t reward “hard work.” They don’t reward “moral merit.” They reward the creation of value for others. Period. In a genuine market, the path to material wealth is by doing things that others value. Your wealth is a reflection of the ways in which you’ve improved the lives of those who have paid you for what you produce. Mutually beneficial exchange – value for value.

You can be an asshole and still make people’s lives much better off. If you have a great idea, you might not have to work very hard to bring it to fruition. Your labor might not be especially skilled if you’re willing to do work that others value but are unwilling to do. Your wealth is not a sign of your moral worth as a person. It’s a sign that you created value for others. Now that’s morally praiseworthy in my book, but there’s also a bunch of other dimensions to being a moral person that you might lack.

Markets don’t reward merit. And wealth is no indicator of such merit. The sooner we get away from that misunderstanding the better. The rich aren’t better people. In a genuine market, they’re just better at creating value for others.

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