“To clarify my comment, objectivism says you only deserve to get what you work for from other people. That is, you don’t in any way deserve to receive from others what they didn’t already agree to pay you in exchange for your work.”
Although it might work as a system of ethics (or not, depending on your ethics), this definitely doesn’t function as a system of economics. First of all, it makes the question of wealth creation a chicken-and-egg problem: If every individual A only deserves to receive what individual B agrees to pay them for work X, how did individual B obtain the wealth to pay A in the first place?
The answer is probably that you can also work for yourself, creating wealth that did not exist without anyone paying you. So your equation, as you’ve expressed it, does not quite balance. You’re missing a term.
Wealth creation is very much a physical thing, which makes it hard to tie to an abstract system of ethics. The wealth created by work X is the value of X; whether it’s the food grown from the earth, or the watch that has been assembled from precisely cut steel, glass, and silicon. That is the wealth that is added to the pool by labour and ingenuity, regardless of how it gets distributed or who deserves to get paid for it. And that wealth remains in the system, until the watch breaks or the food spoils (or gets eaten; it’s harder to calculate the value of consumed food). It might lose its value quickly, or it might remain a treasure for centuries after the death of every individual involved in the creation of that wealth, like a work of art. It might also be destroyed by random chance well before its predicted value has been exploited.
Who deserves to benefit from the wealth that was created by the work of, and paid for by, people who have been dead for generations? The question of who deserves to benefit from the labour X, and how much, becomes very tricky when the real world is taken into account...
One might argue that that is what Wills are for, but a Will is usually a transfer of wealth in exchange for no work at all. Does an individual morally deserve their inheritance, even if they didn’t work at all for it?
It also gets tricky when the nature of humans as real people and not abstract entities is taken into account. People are born helpless, have finite lifespans, and their lifespans are in some way a function of their material posessions. A child is not physically capable of executing much labour, and will die without access to food and water. If children are treated as individuals, then no child deserves to live, because no child can perform the work to pay for their upbringing. Unless they are signed into a loan, but this would need to be done before they have the decision-making capacity to enter a contract.
But the mortality of people is still an issue. A human cannot physically survive zero wealth for more than a few days. So a human on the edge of poverty cannot realistically negotiate a contract either, because the party that offers them pay has infinite bargaining power. One might argue that they don’t need bargaining power if there is competition between multiple individuals offering contracts, which will drive the contract toward something reasonable. But again that abstraction ignores reality—this individual will die after a few days of no food, and even the process of competitive bidding for contracts takes time.
In this case, a person with little wealth will do work X in exchange for very little pay, much less than the value of X, and in practice just enough to keep them alive enough to continue to do X the following day. But simply because that is what they agreed to receive (due to their inability to reject the deal), does that mean that is what they morally deserve to receive?
Finally, some goods are just too difficult (computationally) to manage as contracts between individuals. The value of the resource might not even be presently known by science, although it exists (for example, the economic value of an intact ecosystem). The trespasses and exchanges might be so frequent and poorly documented that the consumption of the resource cannot be managed by legal contracts between owners and licensees (for example, the air we breathe).
“To clarify my comment, objectivism says you only deserve to get what you work for from other people. That is, you don’t in any way deserve to receive from others what they didn’t already agree to pay you in exchange for your work.”
Although it might work as a system of ethics (or not, depending on your ethics), this definitely doesn’t function as a system of economics. First of all, it makes the question of wealth creation a chicken-and-egg problem: If every individual A only deserves to receive what individual B agrees to pay them for work X, how did individual B obtain the wealth to pay A in the first place?
The answer is probably that you can also work for yourself, creating wealth that did not exist without anyone paying you. So your equation, as you’ve expressed it, does not quite balance. You’re missing a term.
Wealth creation is very much a physical thing, which makes it hard to tie to an abstract system of ethics. The wealth created by work X is the value of X; whether it’s the food grown from the earth, or the watch that has been assembled from precisely cut steel, glass, and silicon. That is the wealth that is added to the pool by labour and ingenuity, regardless of how it gets distributed or who deserves to get paid for it. And that wealth remains in the system, until the watch breaks or the food spoils (or gets eaten; it’s harder to calculate the value of consumed food). It might lose its value quickly, or it might remain a treasure for centuries after the death of every individual involved in the creation of that wealth, like a work of art. It might also be destroyed by random chance well before its predicted value has been exploited.
Who deserves to benefit from the wealth that was created by the work of, and paid for by, people who have been dead for generations? The question of who deserves to benefit from the labour X, and how much, becomes very tricky when the real world is taken into account...
One might argue that that is what Wills are for, but a Will is usually a transfer of wealth in exchange for no work at all. Does an individual morally deserve their inheritance, even if they didn’t work at all for it?
It also gets tricky when the nature of humans as real people and not abstract entities is taken into account. People are born helpless, have finite lifespans, and their lifespans are in some way a function of their material posessions. A child is not physically capable of executing much labour, and will die without access to food and water. If children are treated as individuals, then no child deserves to live, because no child can perform the work to pay for their upbringing. Unless they are signed into a loan, but this would need to be done before they have the decision-making capacity to enter a contract.
But the mortality of people is still an issue. A human cannot physically survive zero wealth for more than a few days. So a human on the edge of poverty cannot realistically negotiate a contract either, because the party that offers them pay has infinite bargaining power. One might argue that they don’t need bargaining power if there is competition between multiple individuals offering contracts, which will drive the contract toward something reasonable. But again that abstraction ignores reality—this individual will die after a few days of no food, and even the process of competitive bidding for contracts takes time.
In this case, a person with little wealth will do work X in exchange for very little pay, much less than the value of X, and in practice just enough to keep them alive enough to continue to do X the following day. But simply because that is what they agreed to receive (due to their inability to reject the deal), does that mean that is what they morally deserve to receive?
Finally, some goods are just too difficult (computationally) to manage as contracts between individuals. The value of the resource might not even be presently known by science, although it exists (for example, the economic value of an intact ecosystem). The trespasses and exchanges might be so frequent and poorly documented that the consumption of the resource cannot be managed by legal contracts between owners and licensees (for example, the air we breathe).