Monday, February 15, 2010

Value vs. Merit

I usually post on news, not commentary, but the following makes an important point.

From Reason Magazine, Shikha Dalmia notes that you get paid for value, not merit.

In a functioning market, Hayek insisted, financial compensation depends not on someone's innate gifts or moral character. Nor even on the originality or technological brilliance of their products. Nor, for that matter, on the effort that goes into producing them. The sole and only issue is a product's value to others.


But markets don't just expand and democratize the concept of merit; they render it moot. No longer does it matter what great qualities reside in you. What matters is if you can make them work for others. The concept of merit is replaced by that of value. Merit is intrinsic, concentrated, and atomistic; value is relational, decentralized, and social.

To the extent that academia rewards merit rather than creating value, we're teaching our students the wrong things.

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