In my last post, I discussed the desert theory justification for socializing finance. According to desert theory, individuals should receive compensation equal to their economic contribution. The finance industry violates this principle in a variety of ways. Most notably, it allows owners to capture compensation greater than their economic contribution at the expense of workers who capture less. Socializing finance can be justified under desert theory as a way to end this kind of (Marxian) exploitation.
Most leftists (myself included) shy away from desert theory. Although it provides a way to attack finance and other sorts of rents, its emphasis on compensating for economic contribution is problematic. This emphasis feeds into right-populist producerist ideologies that regard the poor and unemployed as parasites. Under desert theory, it would seem that unemployed people, the elderly, the disabled, and others would have very little to no entitlement to anything. That’s not a satisfying conclusion.
In addition to these bad theoretical consequences, the theory is also just very bizarre. It is hard to imagine why distributive justice requires an economic karma system where individual productivity and compensation need to be entirely balanced. It would be technically difficult to implement as well. How can you figure out exactly what percent of the overall product any particular individual has contributed? In a modern economy, making any given product is a massive collective undertaking involving thousands of people and productive inputs. As Amartya Sen wrote, there is no obvious way of picking out “this much” and attributing it to a given individual or factor of production.
Desert theory is generally understood as a right-wing economic justice philosophy. I’ve certainly categorized it as a conservative philosophical framework in the past. Although it is mostly used by right-wing figures, there are leftist desert theories as well. Most notably and most recently, Gar Alperovitz and Lew Daly articulated a leftist desert theory that demands extensive economic redistribution.
Alperovitz’s desert theory points out that inherited knowledge and technology — which no living person made — are the biggest factors in our economic production. Strip out calculus or electricity technology from the modern economy, and imagine what it would look like. Alperovitz and Daly are not the first people to point this out either. Famed economist Robert Solow demonstrated that the most significant factor of production is not capital or labor, but something now-termed the Solow residual. Solow pegged the residual — which includes things like technology, innovation, and so on — as being responsible for as much as 90 percent of the modern economy’s output.
Under desert theory, nobody has a rightful claim to the gains generated by the last thousand years of knowledge creation and technological progress. I did not invent calculus, nor did anyone else currently living. That economic contribution, and countless others like it, come to us collectively as a gift from the past. If people are only entitled to compensation equal to their economic contribution, then as much as 90 percent of our economic production is owed to nobody in particular. That is, it should be socialized.
There are of course efficiency considerations involved in socializing that much of our economic product. But this leftist desert theory provides a very straightforward justification for just about any kind of redistribution we might want to do. All people — be they rich, poor, employed, or unemployed — are primarily living off of the intellectual gifts of prior generations. Distributing the gains of those intellectual gifts in so obscenely unequal ways simply cannot be justified in a desert theory framework.
The point here is that desert theory is not a hopelessly right-wing theory that condemns the poor and unemployed to lives of misery. An updated and plausible take on it generates the exact opposite conclusion, and lays the groundwork for a very left-friendly present and future. In a future world primarily driven by automation and technology — the sort Peter Frase writes so often about — desert theory could provide a very useful normative framework for creating the kind of society most on the left want to see. It is not the only philosophical way to get there (nor in my view the best way), but it is a way.