Bryan Caplan  

What About the Bloggers?

Ralph Nader and Campaign Finan... WHINE...
One objection to my meritocratic view of the market (work backwards from here) that I haven't heard: "What about the bloggers?"  Some bloggers are great, some aren't, yet almost all of them earn the same wage - zero.  You could just as easily ask, "What about the garbagemen?"  They're mostly unskilled, but earn a lot more than equally able, hard-working people in other occupations.  The economist's explanation, of course, is compensating differentials.  The supply of labor partly depends on the fun/misery of the job.  When the job is fun enough - like blogging - market forces drive the wage down to zero.

If you define reward in narrowly financial terms, compensating differentials seem to undermine market meritocracy: "In a just world, how can garbagemen earn more than bloggers?"  But there's no reason to prefer the narrow definition.  There's nothing magical about money; it's just one dimension of compensation.  Some people get paid in premium coffee, some in fame, others in shorter hours, others still in discretion over how to spend their time.  Looking at the whole package, bloggers are reasonably well-paid - and better bloggers earn far more than the typical blogger even if both report zero earnings to the IRS.

In other words, if we count fun and misery properly, they don't undermine the market's meritocratic order.  They're part and parcel of it.

P.S. Two or three books down the line, I think I might like to write a book on the economics and philosophy of merit.  Reactions?

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COMMENTS (7 to date)
Tom West writes:

Bryan, I think you're in grave danger of moving into non-falsifiable territory by factoring in non-monetary aspects until 'merit' wins out. Besides, I'd die a lot faster for lack of garbage men than lack of bloggers.

To be honest, I find trying to equate economic success and merit slightly ridiculous. Does something become less meritorious simply because someone else is doing it and increasing the supply? Does providing a desired service for poor people rather than rich make it less meritorious simply because the economic return is less?

That the correlation between merit and economic success is positive is about all I think you can safely say. Going further simply means redefining merit (a nebulous term anyway) or redefining success.

RL writes:

Note, Bryan, that several of your parameters are not independent. Those with larger salaries often are more likely to also have fame and probably have a greater access to premium coffee at the workplace.

Isn't it more pertinent to point out that not all bloggers work for free? Don't you receive some financial compensation for your blogs at econlog?

Josh Weil writes:

“Information about prices—whether it be wages in different activites, the rent of land, or the return to capital from different uses—is not the only information that is relevant in deciding how to use a particular resource. It may not even be the most important information, particularly about how to use one’s own labor. That decision depends in addition on one’s own interests and capacities—what the great economist Alfred Marshall called the whole of the advantages and disadvantages of an occupation, monetary and nonmonetary. Satisfaction in a job may compensate for low wages. On the other hand, higher wages may compensate for a disagreeable job.” - Milton Friedman, Free to Choose pg 20

Greg Ransom writes:

Bryan, just tell us that you are making arguments with the net down.

Then we can just read this for what it is -- entertainment.

Justin Martyr writes:

P.S. Two or three books down the line, I think I might like to write a book on the economics and philosophy of merit. Reactions?

I think that would be a fine idea. Most of the literature on dessert is dominated by liberal egalitarians who do not truly understand the pros and cons of markets. I would be interested to see what an empirically grounded economist would have to say.

azmyth writes:

This is exactly why Austrians put qualifiers like "radical" in front of subjectivisim. Most people don't get that all value is subjective, including the value that actors get from "objective" amounts of money. It's not the nominal wage that matters, but the subjective value each person places on the wage they earn that matters for decision making.

Tom West: The application of Popperian falsifiablity is inappropriate when it comes to explaining individual choices. Compensating differentials have strong empirical support and each person has different preferences.

Nicolaie Ionut writes:

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