Mankiw on Just Deserts

Andrew Lister

From Greg Mankiw’s “Joe the Plumber” essay (see also his “Defending the One Percent“) on alternatives to utilitarianism:

“Let me propose the following principle: People should get what they deserve. A person who contributes more to society deserves a higher income that reflects those greater contributions. Society permits him that higher income not just to incentivize him, as it does according to utilitarian theory, but because that income is rightfully his. This perspective is, I believe, what Robert Nozick, Milton Friedman, and other classically liberal writers have in mind. We might call it the Just Deserts Theory.”

Mankiw goes on to say that a competitive market equilibrium is not just efficient but fair, since it gives people what they deserve:

“[T]he Just Deserts Theory… gives a new normative interpretation of the equilibrium of a competitive market economy. Under a standard set of assumptions, a competitive economy leads to an efficient allocation…

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