More Desert Theory Confusion

Elizabeth Stoker has a wonderful piece in The Week about the recent hubbub surrounding one of Pope Francis' top advisors remarking upon the incompatibility of libertarianism and Catholicism. She defends that view, detailing church orthodoxy on the matter of resource distribution over the centuries, Augustine in particular.

In the piece, I was drawn to this interesting quote from Kevin D. Williamson:

Those who put distribution at the top of their list of priorities both make the error of assuming the existence of some exogenous agency that oversees distribution (that being the Distribution Fairy) and entirely ignore the vital question of what gets produced and by whom.

There is of course an "agency that oversees distribution" (it's not exogenous though). That agency is the state. You can spot them doing this on a daily basis. Look for the cars with lights on the top of them and the people wearing bits of metal on their clothes. Look for the courts and the jails. The agency called the state, just as a factual matter, is constantly overseeing distribution by threatening to use aggressive violence against all of the people who do not wish to follow the distributive rules the state has established. We can get rid of this by moving into the Grab What You Can World, but unless we do that, the Distribution Fairy is very real.

What Williamson appears to be doing in this paragraph is not denying the existence of an agency that oversees distribution. Rather, he is clumsily asserting his own secular moral view about what principle should govern the distribution of resources. In particular, he seems to buy into a secular desert theory view that says societies should impose distributive institutions that follows the principle: to each according to what they have produced. As Stoker points out, this secular idea is not the distributive principle promoted by Christianity. Nonetheless, it is one commonly advocated.

What I love about this desert theory ethic is that it is anti-capitalist and anti-libertarian if you actually follow it to its conclusion, as I've explained before. At every single factor of production—nature, labor, capital, and total factor productivity—desert theory renders the conclusion that capitalism distributes things immorally.

Nature

The distributive principle "to each according to what they have produced" means nobody can rightly claim the value of nature. No human being produced raw materials like land, oil, trees, minerals, metals, and so on. No human being can rightfully claim them to the exclusion of others.

Non-religious people believe nobody created those things and, under the desert principle, nobody can be entitled to them. Thus private ownership in natural resources, as we get in capitalism, is inconsistent with desert.

Christians believe, as Proudhon famously did, that God made the natural resources of the world. It follows from then that:

we should know no better than before who has a right to exact payment for the use of the soil, of this wealth which is not man’s handiwork. Who is entitled to the rent of the land? The producer of the land, without doubt. Who made the land? God. Then, proprietor, retire!

Capital

Capital allows people to receive income that they have not produced. You can click your mouse a few times and dump a big pile of money into an account and then have tons of money flow to you each quarter even though you haven't produced anything. Hell, you could have even been in a coma during the time and somehow received millions.

We might say that capital like machines and buildings are themselves productive, but that is not the same thing as saying that their owners are productive. The owners are not productive. They use their legally constructed and enforced ability to violently exclude others from those things to extract rents. This may be good or bad from a utilitarian perspective, but it undeniably contravenes the principle that each should get what they produce. If you believe in desert, capital income must go.

Labor

In joint ventures under capitalism, workers are not compensated according to their personal productivity, i.e. what they personally produce. They are compensated according to their marginal productivity, i.e. the extra output a capitalist venture can hope to produce by adding the worker. Even the idea that they are paid according to their marginal productivity is one that obtains only in theory under assumptions that don't exist in reality. Nonetheless, slow-witted economists from J.B. Clark and on downward have desperately mixed up personal and marginal productivity, leading to serious confusions.

Those confused about the meaning of marginal productivity think that there is some identification between the addition of a marginal unit of resources and the marginal output. But, as Amartya Sen notes: "There is nothing in the marginalist logic that establishes such an identification. Marginal product accounting, when consistent, is useful for deciding how to use additional resources so as to maximize profit, but it does not “show” which resource has “produced” how much of the total output."

In a joint production, it is impossible to say which unit of labor has produced what part of the overall output. The principle that each be compensated according to what they have personally produced is therefore not followed under a capitalist system that compensates according to marginal productivity.

Total Factor Productivity

Even if we stick to marginal productivity as the way to compensate economic inputs, we still don't get anywhere near to capitalism. The biggest factor in production is not nature, labor, or capital, but in fact accumulated technology and knowledge that comes to us as an unearned inheritance from the past. The marginal productivity of that unearned inheritance accounts for the majority of our economic output. Imagine you held everything else equal in the economy, but then ticked off electricity technology (which nobody alive has produced). By how much would the economy shrink? A ton.

The amount by which it shrinks is what we would call the marginal productivity of electricity and nobody alive has a desert-based claim to it. It's not just electricity of course. Just think of all of the technology and knowledge that goes into the national output each year that nobody alive produced.

Conclusion

If the "vital question" about distribution is "what gets produced and by whom," then we've got ourselves some serious problems. Nobody produced nature, but people receive the windfall value of it by excluding others from it. Around one-third of the national income each year flows to capital, the owners of which did not produce anything. Laborers do not get their personal productivity in compensation. Finally, the majority of what is produced each year comes from the marginal productivity of accumulated technology and knowledge that only dead people have some desert-based claim to.

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