Economic Inequality and Merit: Not Just a Question of Starting PointS

The aim of this article is to reflect on the relationship between inequality in labour income and merit starting from what Einaudi wrote about the impossibility of talking of individual merit when income differences depend on inequality in starting points. The main thesis argued in the article is that in order to speak fully about the merit of inequality, attention must be paid to three factors: i) how Willingness to Pay is formed in various markets; ii) competition in the forms in which it manifests itself, iii) the characteristics of technology. Examination of these factors suggests that much non-merit inequality is formed in contemporary markets, contrary to the prevailing view, and that effective results in countering nonmerit inequality can be achieved by fostering conditions of greater openness and competition in markets, adopting a more general and less controversial approach than that of aiming at equality of starting points.