True Fairness Means Rewarding Merit, Not Spreading the Wealth

President Obama apparently aims to turn fairness into the theme of this election year. He used the word "fair" or "fairness" nine times in his State of the Union address, and fourteen times in his Osawatomie, Kansas speech the month before.

This goes beyond mere rhetoric. Take the so-called "Buffett Rule," a proposed special tax hike just for families making over a million dollars in a year.

Though the Congressional Joint Committee on Taxation estimates the Buffett Rule would raise only about $47 billion over a decade--roughly the amount Americans will spend on Halloween and Easter candy over the same period--the White House has spent an exorbitant amount of time the last few months plugging this idea. This is not because it would do anything meaningful to address our fiscal imbalance, but because it would be "fair."

But here's the problem: The president never defines what he means by "fair." And this is for a simple reason: his definition is simply not recognizable to most Americans.

There are two main ways to define fairness: fairness in terms of opportunity, and fairness in terms of outcomes. The first means leveling the playing field, and the second means spreading the wealth around. The first means lifting people up on the basis of merit, and the second means bringing successful people down.

By focusing on raising taxes on the wealthy rather than pursuing meaningful policies to reduce unemployment or encourage economic growth, the President is using this second definition of fairness.

Fortunately, most Americans understand that the president's definition is completely off base. They believe that true fairness means rewarding merit, not spreading the wealth. Consider the following question from the 2006 World Values Survey. A large sample of Americans were asked to envision two secretaries of the same age doing the same job, but where one secretary was more efficient and reliable than the other secretary. Respondents were asked if it was fair that the better secretary was paid more than the other. Over 88 percent of respondents thought it was fair.

Of course, this is only fair if the better secretary got her skills through hard work. Americans would say she most likely did. The idea that hard work and success are closely, if not perfectly, related is a core American value, and one that we've held for a long time. For almost 40 years, the General Social Survey has been asking Americans whether "hard work" or "lucky breaks and help from other people are more important" in determining whether people set successful. Every time the question has been asked, between 60 and 70 percent of Americans have said "hard work." The highest percentage of respondents to say "lucky breaks" is 16.

In a 2005 Syracuse University poll, researchers asked a cross-section of Americans if they believe that "everyone in American society has an opportunity to succeed, most do, or only some have this opportunity." Some 71 percent of respondents said that all or most Americans can get ahead.

This is consistent with most of our experiences. It's almost impossible to argue that American success is not earned. We can all think of times when our hard work has gotten us ahead or when we've been punished at work or in life for making poor decisions. Even if America's not perfectly meritocratic, we all see how hard work pays off.

Now, of course, America is far from perfectly fair. But that's because life isn't fair. For instance, all other things being equal, taller men and prettier women make higher salaries than their shorter, plainer counterparts. Believe it or not, there are studies that show these things (as if we needed them). More seriously, some people have substandard elementary education or childhood nutrition, which creates a lifelong disadvantage. Worse still, some children are born into families that don't emphasize the values that beget opportunity: honesty, hard work, and education.

We need to address these inequities. Still, we shouldn't abandon the idea of meritocratic fairness just because not everybody has completely equal opportunity. But this is what the president appears to be asking us to do.

America is built around the shared values and aspirations of mobility, opportunity, and merit. Even if only, say, half the outcomes in our life are due to merit, that's still the half within our control. We should focus on increasing the role of merit, not dismiss the idea because it's imperfect. Without a belief in meritocratic fairness, we have little incentive to work hard, be honest and optimistic, and create value in our lives and the lives of others. Fatalism and envy are simply not American values.

Besides, what is the alternative? There's only one: a society based solely on luck or power. In other words, we can fashion a society around the idea of merit, however imperfect, or just give in to a society of bank bailouts and corporate cronyism.

So how do we become a fairer society? We have to rely more on the institutions that support merit and less on policies that reward naked power. Policies that allow and support free enterprise and entrepreneurship make it more likely that we'll have a meritocratic society based on hard work, ingenuity, and responsible risk taking.

We've seen too many instances of cronyism masquerading as free enterprise and meritocracy. When companies get ahead because of friends in Washington or by gaming the regulatory environment, that's not meritocratic. And we should all stand up to these excesses and call them out, and we should work to limit the ability of politicians to play into these games. There's nothing meritocratic about bailouts or special tax breaks for favored industries.

And to the extent our society falls short of its meritocratic ideals in ways we can control, we should seek to rectify the causes, not the symptoms. That means both dealing with the root of alterably unequal opportunity and decreasing the ability of the politically connected to make up rules for their own benefit.

Most Americans believe that we are an opportunity society, albeit imperfectly. We may have differences of opinion about the policies that best support opportunity. But we should have no doubt about the goal, and we should acknowledge that the vision of an opportunity society, warts and all, still lies at the heart of the American dream.

America is not perfectly fair, because life is not perfectly fair. We should focus on building a fairer America based on opportunity and merit, not envy and anger.

That is, after all, what true fairness is all about.

Arthur Brooks is president of the American Enterprise Institute and author of The Road to Freedom: How to Win the Fight for Free Enterprise (Basic Books). Learn more about making the moral case for free enterprise and why it matters at arthurbrooks.aei.org.