Entrepreneurs, Profits, and Deserving Market Shares

Abstract

The question I wish to take up in this paper is whether competitive markets, as mechanisms that initiate the distribution of scarce goods, allocate those goods in accordance with what participants in those markets deserve. I want to argue that in general people do not in fact deserve what they get from market interactions, when “what they get” is determined by the competitive forces coming to bear on the market (the laws of supply and demand). This more general claim is meant to apply to all participants in the market (workers and their wages as well as capitalists and their profits). However, my strategy here is to focus on the particular case of the role of entrepreneurs, as I will define them, and whether they deserve the profits they reap in a competitive capitalist market. In particular, I will argue that the claim that entrepreneurs deserve their profits, when spelled out precisely, is indeed not plausible. Generalizing from this claim, I want to suggest how moral desert is inappropriate as a justification of market shares whenever competition determines the magnitude of those shares.I should stress, though, the particularity of my central claim: it is that “(strictly speaking) entrepreneurs do not (strictly speaking) deserve their (strictly speaking) profits.” This is not to say that, forotherreasons (for example, reasons of entitlement or utility), people should not receive the rewards doled out by a market. My claim is only that desert has nothing directly to do with it.I am deviating significantly here from the usual strategy for denying the relevance of desert claims to principles of distributive justice.