Toward Merit Economy

19 Pages Posted: 8 Mar 2020

Date Written: February 13, 2020


A number of economists, including Smith, Veblen, Keynes and others believed that status seeking plays dominant role in motivation to work. Contemporary research supports the notion and finds that people generally desire status not as a means, but as a goal in itself. Evidence further suggests, that the proportion of resources used for status signaling is commensurate with one’s income level. Referring to the global phenomenon of volunteering and evidence from fields like anthropology or labor economics, we argue that as equally effective motivators as status can be signals mediated by non-pecuniary awards, like verbal praise, impact indices in the academic domain, or reputation scores on crowdsourced internet portals. Based on these observations we propose a new type of work reward, where the motivationally salient psychological signal is separated from the exchange value, has its value determined by the market and is granted in a symbolic, non-tradable form. The exchange value of reward is commensurate with actual effort, measured in units of labor time. We claim that an economic system with such remuneration mechanism can be both efficiency improving and instituted bottom-up.

Keywords: status, merit, efficiency, equality, volunteering, signaling

JEL Classification: D6, E42, E5, J22, J3, P4

Suggested Citation

Zatko, Alexander, Toward Merit Economy (February 13, 2020). Available at SSRN: or

Alexander Zatko (Contact Author)

Independent ( email )

No Address Available
United States

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