I recently explained how the just desert framework does not actually lead to the conclusion conservatives claim it does. The just desert framework emphasizes compensating people according to how much they produce. Conservatives think that this framework leads to the conclusion that laissez-faire capitalism is the most just economic form. I raise the objection that under laissez-faire capitalism, investors of various sorts draw down sometimes huge incomes without producing anything at all. While this alone undercuts laissez-faire capitalism as a deliverer of just deserts, there are indeed more problems. I seek here to highlight three specific objections Amartya Sen raises to the idea that laissez-faire capitalism necessarily maps on to just deserts.

First, production tends to have a dizzying array of inputs, and it is not possible to figure out how much output each input is responsible for: “There is no obvious way of deciding that ‘this much’ of the output is owing to labor, ‘that much’ to raw materials, ‘that much’ to machinery, and so on.” Imagine for example what goes into the production of a car. An enormous array of natural resources must be extracted from metals, to rubber, to fabrics, to oil for plastics, and so on. A great deal of labor goes into the extraction of those resources, the refinement of them, and the assembly of them into cars. During these processes, workers employ machines to work more quickly, and those machines are themselves products of resource extraction and refinement and other machines. The idea that you can pick out any given one of those tens of thousands of inputs and say the input is responsible for “this much” of the car, and then compensate accordingly, is pure nonsense.

Second, compensation is determined by relative prices that have nothing to do with productivity. Imagine two people who have different jobs but make identical pay. Then, due to shifting demand and labor market conditions, one of them must take a pay cut. The two would still be producing exactly what they were prior to the pay cut, yet the compensation of one would be lower. This poses a problem for desert theory. In these cases, the worker’s productivity and output did not change, just the market conditions that determines the compensation for that productivity and output. If we are to compensate people according to their product, this is unacceptable.

Finally, Sen raises the objection I raised in the post linked at the very top. Desert theorists who endorse laissez-faire capitalism confuse “what a person produces and what is produced by resources that he happens to own.” It is quite possible for a person to never work a day in their life while still enjoying a multi-million dollar income resulting from investment holdings (e.g. trust funds). We can make it even more ridiculous than that. Imagine that in 2009, Mitt Romney had conveyed his blind trust to a pet cat. In 2010, that cat would have “made” $21 million in capital gains from the blind trust. Conservative desert theorists would have to hold that such a cat deserves $21 million due to the productivity of the investment assets the cat owns.

Even if one thought that economic justice required the adoption of a just deserts framework, that framework does not support the laissez-faire capitalist conclusion that right-wing conservatives seem to think it does. When actually applied, desert theory renders unjust the very foundation of capitalist economies: income earned from capital investment.