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Sunday, April 24, 2011

Earned On Merit: The Brits Figured It Out, When Will We?

"If it is now the belief of my fellow men, who call themselves the public, that their good requires victims, then I say: The public good be damned, I will have no part of it!" ---Hank Rearden, Atlas Shrugged

Just Deserts.

Individual Responsibility. Earned On Merit. Achievements by effort, talent or dedication.

Policy Exchange, Prime Minister of Britain David Cameron's "favorite idea outlet" has polled the question of fairness. The results show that the people of Britain have learned the answers to the questions America is still debating.

The quite unequivocal reply that was received (with breathtakingly enormous majorities in some forms) came as no surprise to this column. To most voters, fairness does not mean an equal distribution of resources and wealth, or even a redistribution of these things according to need. It means, as the report's title – "Just Deserts" – implies, that people get what they deserve. And what is deserved, the respondents made clear, refers to that which is achieved by effort, talent or dedication to duty: in other words, earned on merit.

The poll itself shows that four in five voters believe that those that receive welfare should actually work for the money they receive from the government.

The poll, however, shows that a startling 80 per cent of all voters thinks that people who have been out of work for 12 months should have to do community work before they get benefits - as long as they are physically and mentally capable of working.

Furthermore, half of all voters (50 per cent) think that someone on JSA should have to spend between three and eight hours a day searching for work in order to get welfare payments.

Tough sanctions - again going further than anything ever proposed by any British government - also win support, with 49 per cent saying that those on JSA who refuse job offers or interviews should lose half their benefit.

Some 21 per cent say they should lose it all.

With the news reports that the Brits have finally figured the error of the class warfare game, it is only fitting and perhaps could be called ironic that the battle between classes is also being reported and still being fought here in America between conservative and liberal pundits.

We see Arthur C. Brooks is president of the American Enterprise Institute, explaining why the war against the rich is completely unfair and Yglesias, a liberal, trying to argue that the rich being penalized for being rich, should be taxed even more than they already are (which is higher than anyone else) is excused with the justification that it would "improve overall human welfare."

Most important, if we reject the ideals of opportunity and meritocratic fairness, we will end up with a system where outcomes are simply based on luck or political power — it would become a self-fulfilling prophecy. In a 2005 study published in the American Economic Review, economists at Harvard University and the Massachusetts Institute of Technology studied 29 countries and showed that a belief in luck over merit was strongly linked to the level of taxation and spending on social programs. Furthermore, they showed that the more citizens believed in a merit-based system, the more their public policies produced such a system.

In contrast, when populations believed that outcomes are a product of luck, birth, connections, or corruption, the people demanded more distortions to the free-enterprise system and ended up with a system that only affirmed their anxieties.

When politicians argue that, for the sake of fairness, we must raise taxes on the entrepreneurial class — and make those “millionaires and billionaires” bring us a few state-subsidized beers on the beach — they are unwittingly undermining the possibility of achieving the opportunity society they regret not having.

We are not a perfect opportunity society in the United States. But if we want to approach that ideal, we must define fairness as meritocracy, embrace a system that rewards merit, and work tirelessly for true equal opportunity. The system that makes this possible, of course, is free enterprise. When I work harder or longer hours in the free-enterprise system, I am generally paid more than if I work less in the same job. Investments in my education translate into market rewards. Clever ideas usually garner more rewards than bad ones, as judged not by a politburo, but by citizens in the marketplace.

The Brits are finally understanding that production, merit, achievements by effort, talent or dedication are what keeps the economy growing, and thriving and handouts to those not willing to work for the money they need to live are draining the economy.

When will America learn the same lesson?

My attitude on "Common good" and punishing the rich, goes back to well before I started this blog in 2006 and I stand by those statements today.

"Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it. "--Francisco d’Anconia from Atlas Shrugged