Why Profits Are Deserved

Abstract

Over the past decade and a half, considerable work has been done on distributive justice. However, it is somewhat surprising that philosophers have paid little attention to distribution theory in economics. The latter explains how and why people earn what they do in a market economy. On the face of it, it seems that this aspect of economics ought to be relevant to questions of distributive justice in market societies. What I should like to do in this paper is to examine the category of profit in the light of contemporary distribution theory. Specifically, I want to argue that, in general, those who win profits in a market system deserve them. How considerations of desert fit into a theory of justice or ethical theory in general is far from clear.1 However, it seems reasonable to suppose that, if someone deserves something, that is a prima facie reason why he ought to receive it. Thus if it can be shown that, in general, those who get profits deserve them, it will not follow that they ought to have them, all things considered. It would, however, be one reason in favor of that. I shall begin by sketching a theory of the nature of profit in a market economy. Following that will be a general account of how desert claims are justified in institutional contexts. Finally, I shall apply these results to the question of whether profits are deserved.