Matt Yglesias writes on the cricket labor market and its wider implications, citing an IMF paper by Shekhar Aiyar and Rodney Ramcharan:

I think the idea of a purist who believes that career success is due solely to luck is strong man view, so I’ll take this as confirming my basic opinion that are society is structured around an idea of meritocracy that’s largely mythical and to a considerable extent impossible. Progressive taxes and more and better public services.

Not surprisingly, it’s not obvious to me that “progressive taxes and more and better public services” necessarily follows. With regards to luck, it’s not clear to me that the concept as as useful as luck egalitarians imagine. The strong luck egalitarian view maintains, coherently in my view, that the capacity and the willingness to engage in hard work is itself morally arbitrary, insofar as it is unevenly distributed across individuals thanks to some combination of genetic endowments, cultural context, parenting, and much else besides.

My sense is that Matt’s conclusion that we ought to have ”progressive taxes and more and better public services” doesn’t follow. He is disavowing the view that career success is due solely to luck, yet he suggests that the idea of meritocracy is “largely mythical and to a considerable extent impossible.”

I’m perfectly happy to concede that the idea of meritocracy is “largely mythical,” not least because, like all good Hayekians, I’m skeptical of the idea that we can construct a coherent metric for merit or desert; this is part of the case for decentralized markets: it reflects the pluralism of highly complex societies. The argument for decentralized markets is in large part a negative argument: while we can imagine a wide array of schemes for assigning a coherent metric for merit or desert, it is far harder to imagine a scheme that wouldn’t unravel under the real-world pressures of evolving tastes, values, and perceived social needs.

The argument for “more and better public services” is by definition limitless: if we have no principled reason for believing that we’ve ever reached an adequate level of tax-financed public services, it is vitally important that at the very least we pay careful attention to balance — can the growth of tax-financed public services, and the cultural expansion of the wants involved, be accommodated by the growth of the wider economy, the substrate on which tax-financed public services depends?

One could argue — as Dylan Matthews has recently argued, with admirable clarity and sincerity — that Americans could stand to pay higher taxes. But surely we should have some rough-and-ready theory as to why we want more and better public services and to what end. Is it because meritocracy is a myth? This argument from strong luck egalitarianism could lead us to a quasi-Rawlsian conclusion, i.e., that economic distinctions that don’t serve the interests of the least well-off — a group that could include those who, by virtue of genetic proclivities or cultural context, choose not to engage in remunerative labor — are presumptively illegitimate.

Or we could tilt to a very different view, namely that we should try to define some kind of decent social minimum and orient our welfare state towards meeting it in a cost-effective, sustainable way. Above and beyond that, we accept a degree of arbitrariness as the price of an open, dynamic, evolving culture.

During the late 1990s, a variety of web properties — pioneers in electronic greeting cards, Pets.com, etc. — were given outsized valuations. Billions of dollars were transferred from credulous investors to entrepreneurs who ranged from savvy to completely clueless. These fortunes have been plowed into other businesses, into politics — left-wing politics in many cases — and countless monuments to the egos and ambitions of the unexpectedly rich. And in other less fizzy eras, really brilliant, hard-working entrepreneurs who’ve gone on to create tremendous intangible value for millions of people have reaped rewards that aren’t nearly as eye-poppingly large. One can characterize this as a grave injustice. One can also characterize it as a phenomenon not unlike the weather. This is a good reason to not assign too much moral weight or significance to the fact that Norman Borlaug did not die a wealthy man while Warren Buffett undoubtedly will. Borlaug indirectly fed hundreds of millions if not billions, and enabled an economic revolution that has lifted roughly a quarter of the world’s population from dire poverty. Buffett moved around lots of numbers on spreadsheets and agitates for higher marginal tax rates for people who aren’t yet rich, thus earning high-fives from earnest liberals. I mean, what is the upshot of all this?

The case for progressive taxes derives from a few different sources, one of which is the powerful idea of diminishing marginal utility. That’s fair enough. Upper-tail wage and wealth dispersion is a funny phenomenon that yields lots of peculiar-looking outcomes. The harder question, as always, is the question of alternatives: do we have a pattern that looks, sounds, and feels better that won’t yield ugly consequences and destroy wealth and enrich rent-seekers who gum up the works of what Baumol called “the free-market innovation machine“?

We could say, well, surely we can make our public services somewhat better and more well-funded at the margin. But again: where does it stop? And who is getting enriched in the process, and to what end? If we’re in this morally murky terrain where merit and desert are contested — I think we are — why is it vitally important to fight for more transfers to the median household in the United States versus the median household on Earth? If the injuries of poverty in this country derive from maladies that aren’t susceptible to cash-based transfers and the work of professional social service providers, isn’t it possible that agitation for cash-based transfers and expanded public sector workforces is more about the economic interests of credentialed middlemen?

Then, of course, there is the extent to which our political conflicts mask aesthetic conflicts: some prefer leisure-heavy, high-density lifestyles that involve lots of dinner parties to work-heavy, low-density lifestyles that involve lots of restaurant meals, and increasing returns to scale in leisure mean that we want our way of life to be dominant. It’s at this point that we layer a series of grand principles over this rather prosaic conflict.