Philosophers Annual is a highly prestigious and 45-year-running anthology of the 10 best philosophy papers published each year. The collection for 2025 was recently released and #1 on the list (though I’m not sure there’s any particular order) is Desert and Economic Interdependence, by Evan Behrle.
In the paper, Behrle is disputing a particular justification for economic inequality: the idea that workers deserve to be paid according to their productive contributions.
This argument is popular and intuitive. One worker can justifiably make more than another by taking longer hours, offering higher skills, or enduring worse conditions. Billionaires are widely reviled, but income inequality within the working class, say between lawyers and laborers, is less scandalous even among the left. They are simply being paid in proportion to what they contribute.
By this argument, income inequality is justified because it is rewarding each worker in proportion to the productive contributions they make to the rest of the economy. Conveniently, markets enforce this moral principle through competition. If a man or machine adds $100 to the revenue of a widget factory, competing employers can profitably outbid each other until the input is paid a wage equal to the value of the extra goods it produces, i.e. its marginal product.
Despite its popularity and intuitive appeal, Behrle argues that this justification for income inequality is wrong. Admirably, he does not take the standard tack of denying that market wages measure productive contribution, nor does he remind us that some determinants of productive capacity are set unfairly by nature or circumstance. Instead, Behrle seeks to defeat this argument on its own terms.
Behrle’s Argument
Behrle begins by considering the argument for paying workers their marginal product in the first place:
A worker’s marginal product is the difference between output with the worker and output without them … Marginal revenue product has us compare the actual world, at a given time, with a possible world in which an individual worker is absent.
The justification for crediting workers with their marginal product is based on counterfactual impact. Were it not for the labor of Worker W, total output would be lower by $200k. Therefore, Worker W deserves $200k of total output.
But how does W produce that $200k exactly? Alone on a desert island W could only produce a few dollars worth of coconuts at best. In a modern economy there are dozens of groups without whom W could not produce a cent. To make their marginal product W needs coworkers, managers, truckers, electricians, plumbers, pharmacists, and police. Formally, there exists a Group G such that, were it not for the labor of that group, Worker W’s marginal product would be $0 instead of $200k.
Therefore, by the same counterfactual impact argument that justifies W’s claim on $200k of output above, Group G has a claim to W’s marginal product. Were it not for the labor of Group G, W’s marginal product would be lower by $200k. In Behrle’s words “G makes a difference to the difference W makes.”
Note also that Group G’s claim to W’s marginal product goes beyond mere causation. One might say that W’s marginal product also relies on the demand of consumers for the goods they create, or on the flap of a butterfly’s wings ten thousand years ago which set the world on its current course. But, far more saliently than these other causes, Group G causes W’s marginal product in the same way that W does, namely by contributing their labor.
If W deserves credit because their labor is necessary for this $200k difference, why should other workers receive no credit when their labor is likewise necessary for that very difference?
And, Behrle proactively responds, it is the case that these essential groups receive little to no credit for the difference they make. Take G to be truckers, for example. Together, they produce a service that’s essential for the whole economy and certainly for W’s $200k marginal product. But because there are already millions of truckers, adding or removing one doesn’t change any other worker’s marginal product or output much, so each one commands only a small wage. The sum of these wages is much less than the total value that would be lost if all trucking disappeared.
To rectify the difference between what G deserves (on the same basis as W) and what G gets (the sum of each member’s marginal product), W’s income must be split and shared with group G.
There are dozens of such groups in the economy. Thus, Behrle concludes, the distribution of desert is far more equal than the distribution of income created by paying workers their marginal product.
Response
There are several ways to respond to Behrle’s argument here. You might point out that even if marginal product payments don’t assign everyone exactly what they deserve, they do induce efficient behavior and so maximize the amount of value produced in the economy. Growing the size of the pie has been a far more effective lever for getting people what they deserve than fighting over how exactly to distribute the slices, so we’d do better to not kill the golden goose.
Alternatively, you might take a Nozick-style property rights view and just observe that at every step in the sequence of transactions that led to the income distribution that Behrle impugns, everyone simply made voluntary trades of their own labor and resources they legitimately own. No other justification for the income distribution is needed.
But neither of these responses engage directly with Behrle’s arguments. Must we accept his takedown of the counterfactual impact justification for marginal cost pricing and accept merely instrumental or axiomatic defenses of income inequality?
No. First, note that all of Behrle’s discussion of interdependence is merely an unusual way to say something that all economists already agree with. Namely, that there are lots of groups of inputs that are essential for economic output i.e. strong complementarity is widespread throughout the economy. The most common model of a production function, Cobb-Douglas production, combines inputs multiplicatively so that if any single input is zero, all of output is zero.
Marginal product already rewards inputs for this complementarity. In a simple Cobb-Douglas economy where output Y = K^α*L^(1-α), labor’s marginal product (∂Y/∂L = ((1-α)K^α*L^(-α)) rises with the capital stock, reflecting that labor makes a difference to the difference capital makes. If an input G increases W’s marginal product by $200k, then that’s added in to G’s marginal product as part of their counterfactual impact of joining the economy.
The problem Behrle has is not that any individual is being under-credited for the differences they make to output and to other's productivity. His problem is that groups of individuals are being under-credited for the differences they make only as a group.
He observes that the total value of truckers, say, is immense, but the marginal value of truckers, which sets their wages, is small, and sees this as an injustice. The injustice is not that any individual trucker makes a big impact to the economy that their wage doesn’t reflect. The injustice is that none of the trucker’s wages, nor their sum, reflect the massive economic impact of all truckers stopping work at once.
Behrle’s dispute with marginal product pricing, therefore, is just a reframing of the diamond-water paradox. Collectively, water is responsible for all life on earth and all economic output. But the price of a gallon of water may be thousands of times less than a diamond, all of which could disappear without catastrophic consequences. Why should diamonds deserve so much when their value depends on the continued existence of water?
The answer to this paradox, of course, is that scarcity is a source of value. Water would be far more valuable than diamonds if there was very little of it and every drop made the difference between life and death. But as it is, water is abundant, so any given gallon that might save your life is easily replaced with another that does the same.
Behrle’s view that desert should reflect the total value of a group of inputs rather than the marginal value of each one requires that somehow adding more workers or more gallons of water to the economy shouldn’t lower their value but should raise it because the group’s total impact goes up. It requires that every plate of food should be credited for the bite that saves your life in a famine. Or that every nurse should share the reward for the only one on staff at midnight on Christmas.
In fact, the value of something, its counterfactual impact, falls as the number of alternatives and substitutes grows. The workers of group G aren’t compensated for their collective role in W’s marginal product because they are each replaceable where W is not. Perhaps all together they are not replaceable, but they can all replace each other and that decreases the value of each one. If they band together to extract their total surplus, that’s called a monopoly or a cartel. I wonder whether Behrle would like all of the world’s oil companies to collect more credit for their role in powering the world economy.
The workers of G don’t deserve any of W’s marginal product because each of them, on the margin, is unessential for it. That W would suffer if G and all its substitutes disappeared together shouldn’t credit the members of G any more than the fact that food is worth everything in a famine should make the prices at the grocery store go up.
Truckers as a group may be necessary for the functioning of the modern economy, but rewarding any individual trucker for this interdependence is giving them credit for the value of truckers in a world where we have very few. In fact, in our world, we have millions of truckers, so the counterfactual impact of each one is low. Thus, the low marginal product of truckers is not a denial of their necessity as a group or an under-payment, it’s just a consequence of the fact that scarcity is a source of value.
There are other problems with Behrle’s claims and further proofs by contradiction one can point to, but this is the central response: The counterfactual impact of an entire group is not a source of desert for its members because the substitutability of the members within that group is a legitimate constraint on their value.
Thanks, Max, for the post, and to everyone for the comments.
I think that the objection in the post is a good one. Indeed, I think it's probably the best one. That's why I considered it in the paper: it's what I have in mind on pp. 273-4 (in the published version, 24-5 in the preprint). Those pages were inspired by the diamond-water paradox.
1. Before I reiterate my response to that objection, it might be helpful to present a simpler version of my main argument. Compare two toy economies. In the first, Worker 1 makes all the difference to output—their MRP=Y—but their labor wouldn't make any difference in the absence of the labor of Worker 2. Worker 2 makes all the difference to the difference that Worker 1 makes. And this will show up as Worker 1's MRP: making a difference to the difference that Worker 1 makes is itself to make a difference to output. So reward according to MRP has them split output evenly. In the second two economy, Worker 1 again makes all the difference, but this time depends not on a single other worker but on a group of workers, and what they only together do. Their individual MRPs, suppose, are very small. So reward according to MRP has Worker 1 take home almost all of output. My central claim is that the distributive outcome in this second economy is unfair. That claim does not depend on a failure to appreciate the diamond-water paradox; it does not require denying the obvious fact that the individual labor of Worker 1 is more valuable than the individual labor of Worker 2 through Worker n, which fact, we can suppose, is explained by the former's scarcity.
2. In the paper—on the pages mentioned above—I write: "While a worker’s marginal revenue product depends on both that worker and on groups of others, that worker is an individual; the groups are groups. In particular, the groups are unstructured or diffuse collectives—roughly, collectives that are not agentially united. (A classic example: “polluters.”) And what unstructured collectives make happen, the thought goes, in no way bears on what their members deserve." Max writes: "The workers of G don’t deserve any of W’s marginal product because each of them, on the margin, is unessential for it. That W would suffer if G and all its substitutes disappeared together shouldn’t credit the members of G any more than the fact that food is worth everything in a famine should make the prices at the grocery store go up." A common view in philosophy is that it is at least sometimes the case that members of unstructured collectives have reasons for action, and can be rendered deserving, on the basis of what the collective makes happen. This is why an individual polluter, for example, can be blamed even if their marginal contribution to the harms produced by that kind of pollution (not: their marginal contribution to the amount of pollution) is zero.
3. It is not obvious that this common view is correct. There is a famous challenge to it, which the philosopher Julia Nefsky dubbed "the inefficacy problem": How can these individuals be rendered deserving by an action that by hypothesis makes no difference? It's very weird! My argument presupposes that one of the extant solutions to the inefficacy problem can be solved, such that the "common view" mentioned above is vindicated. In the blog post, as I understand it, Max rejects this view. That is a reasonable position, but it is less a straight-on objection to my argument than a denial of one of its presuppositions.
4. Suppose that you do indeed think that the notion of individuals being rendered deserving on the basis of what a collective makes happens is implausible. Here is just one observation that might move you. It is not the case that, in the second toy economy above, the entire story of "value" in that economy is a story of individual difference-making. The collective value of the group's labor does not disappear: it shows up in the individual value of Worker 1's labor, in the straightforward sense that, in the absence of that collective labor, the value of Worker 1's labor would (by construction) be zero. This is what I had in mind when I wrote, in the Jacobin summary of my paper: "For economists tempted to dismiss this as an unproblematic and trivial consequence of the fact that wages are set by marginal and not total or average products, the point is that the marginal productivity of the one worker is itself partly determined by the total product — of the other workers." This sentence was also meant to anticipate the invocation of the diamond-water paradox. (I've been waiting for a blog post like this since I wrote the paper.) This is not a knockdown argument, but I do hope that it has some force for those who accept the view that it is only the value of individuals' labor that matters morally. Why is it okay for Worker 1 to in effect get credit for the collective value of the labor of Worker 2 through n, when Worker 2 through n don't themselves get credit?
A few commenters have wondered whether any economists have read the paper. They have, including an economist at Columbia, whose department was mentioned above. I've also presented the sequel paper to a room of mostly economists. As I mentioned, the best objection that I consider in the paper was inspired by the diamond-water paradox, although I was aware of that paradox before talking to any economists about the paper.
More generally, the paper was partly motivated by what I think is a bad (normative) response to the role of scarcity in the marginalist theory of distribution; here I think Max and I agree. You often hear people dismiss reward according to MRP out of hand by saying: MRP doesn't reflect your "contribution," it reflects the scarcity of your labor. But as Max points out these are not competing claims; all else equal scarcer labor makes a bigger contribution. On this note, to repeat, I am nowhere denying that the workers Max thinks perform more valuable labor in fact perform more valuable labor; my claim is about whether they can take all the moral credit for that value.
I think that economics is important, and that more political philosophy should engage with it. With the help of an economist friend and claude, I've been learning econometrics in part for this reason, but also so that I can read econ papers for myself. If there are any economists reading this who are interested in talking more, please email me. I'm especially interested in feedback on the sequel paper: https://ebehrle.github.io/scc.pdf. If you didn't like the first paper, I think you're going to hate this one... But I also welcome corrections to the first paper, though it's already published. (One of the commenters suggested that an LLM identified some big problems. I asked one of the Claude models to come up with objections last month and didn't find any of them compelling.)
I wonder if the editors of The Journal of Philosophy asked any economists to review the article before publishing. My guess is that the real reason for its popularity is not its cogent logic, but that the author has claimed to undermine the moral legitimacy of markets.