"Markets don't reward merit; they reward value"

Originally published on Los Thunderlads, 9 November 2010:

This article by Shikha Dalmia makes some of the points I tried to express in the notes I posted here a few weeks ago under the title “The Economic Argument.” Two key passages are these: “Markets don’t reward merit; they reward value—two very different things.” And “The idea that there is no god (or some secular version of him) meting out cosmic justice through the market’s invisible hand is unsettling, even to market advocates, but it shouldn’t be. It opens up the possibility of a defense of markets that is, as it were, more marketable.” In other words, when economists say that market competition tends toward rationality they are not saying the same thing Plato says when he imagines a form of learning that culminates in a vision of absolute truth. Efficient social structures may emerge from market competition, but there is no guarantee that these structures will exemplify justice or reveal the secrets of the cosmos.