September 14, 2011

The Top-Down Handout Economy and the Threat to Individual Merit & Freedom

Water the Ground, Not the Tree Top!

Consider the delusion-pretense of process as the be-all as dangerously complete when Business Brahmins from McKinsey begin to preach that the very concept of individual merit and achievement is bogus:

The Baseline Scenario

Is Meritocracy Good?

with 153 comments

By James Kwak

Two years ago I wrote a post arguing that smart, well-educated, hard-working people did not deserve to make more money than other people, at least not as a normative (as opposed to a utilitarian) matter.

Last night I was re-reading A Theory of Justice by John Rawls. This is what he has to say on the matter (§ 12, pp. 73–74):

“[The liberal conception of the second principle of justice] still permits the distribution of wealth and income to be determined by the natural distribution of abilities and talents. Within the limits allowed by the background arrangements, distributive shares are decided by the outcome of the natural lottery; and this outcome is arbitrary from a moral perspective. There is no more reason to permit the distribution of income and wealth to be settled by the distribution of natural assets than by historical and social fortune. . . . Even the willingness to make an effort, to try, and so to be deserving in the ordinary sense is itself dependent upon happy family and social circumstances.”
There is, of course, much more to individual merit and achievement than the dismissive "happy family and social circumstances" that the quoted article claims. And there is work to be done on equality of opportunity. But my point and focus here is different:

Artificially strengthening Business Organizations with Top-Down handouts, namely even more tax breaks and Govt procurement contracts, will further strengthen their delusion that they merely need some Employee Nos. at the roots, and can treat, pay, promote them as they please, because "their merit or individual capabilities dunn matter". This makes for a vacuous Top-Down economy, not much different from the USSR. In fact, even worse: In the American ‘system’, the handout recipients are private entities (not Government Departments), so the hand-outer Government cannot even dictate how the handout will be utilized – how much for remodeling CEO’s commode, and how much utilized for creating new jobs. If the USSR entrenchment-handout-ocracy collapsed, where our "nominally Capitalist World" is headed on the same inspiration is much more dangerous. Only an achievement economy is a robust one, stamping out individuality and individual achievement on one's talent + hard work - is not a recepy for a strengthful society or economy. But this is not to disagree that there's more to be done towards equality of opportunity.

Corporate Trees need to be designed to collect their own sunshine and suction up and distribute water competently absorbed by the roots. Public programs need to water the ground with money and employment, via strengthening of Disaster Preparedness (damage pre-emptive as well as damage recovery), modernization of schools, roads and bridges, and so on - thereby, create potential customers (purchasing power) for the businesses to attack with capable, well paid, and motivated ground workforces. Showering of money at the top, with unnecessary procurement and tax breaks, sends individual worker merit down the tubes.

The only meritorious! part in the quoted article is that there is no normative case for paying higher for Education, higher income has to be earned by demonstrating utility. Yet It is a societal mistake to scuttle merit and emphasize behavioral suaveness and political navigation through the entrenched power structures - as has occurred under the Corporato Topdown socialism in the last few decades, with its near single minded emphasis on doing well via "Corporate Ettiquetes", "Managing to survive 'Superiors'", while the Government has been seduced to share the responsibility for Corporate Toplines and Bottomlines....More....
A system of Individual Merit and Achievement, combined with Bearable, Progressive Taxation is perhaps the best - wherein with its progressive tax haul, the Gov provides for equality for opportunity, not outcomes. Government should not get itself into the aim to "creating employment via the private sectors". Beyond having fair, equitable taxation -- with the current tax collections at pathetic 17% of GDP, low taxes and loopholes are overdone and desperately need a correction-rationlization to collect more to deliver on Infrastructure, 21st Century schooling and Disaster fighting -- the Government can only do harm to worker dignity, relevance and deserved compensation if it attempts doing any more for the "private sector" employment - especially as Top-down handouts.

Relevant Further Reads on this Blog:
Back to Basics
When Do Businesses Really Create Jobs
Commodity Management

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