Passive inequality and the dilemma of meritocracy

Abstract In meritocratic societies, inequality is considered just if it reflects factors within but not outside individuals’ control. However, individuals often benefit differentially from other people’s efforts. Such passive inequality is simultaneously just and unjust by meritocratic standards, confronting meritocrats with a dilemma. We conducted an experiment with a representative US sample to investigate how people deal with this dilemma. In the experiment, impartial spectators redistribute payments between pairs of individuals. We vary whether initial payments result from luck or effort and whether spectators redistribute between individuals who worked themselves or individuals who benefited from the work of real-life friends. We find that spectators treat inequality based on the efforts of individuals’ friends as if individuals had worked themselves, and very different from inequality resulting from differential luck. This indicates that most people accept inequality if it is merited at some stage, which may explain opposition to redistributive policies.