Here is an argument you might hear about fair wages for workers, usually made by a certain kind of tough sounding conservative. It is in response to a common observation made by progressives and socialists, that CEOs often have an enormous income compared to the least or average paid worker in their company. The conservative will respond by going on about how much the CEO risked, and how many long hours and weekends the CEO spent to get the thing off the ground. Often enough, the CEO is the hardest worker on the job, as they have the most to gain financially and as a matter of self worth. The CEO deserves that money.
This sounds like a nice defense of free market capitalism. It is just hilarious that it is loosely based on the labor theory of value, which is basically the foundation of socialist economic theory. This is roughly the idea that the value of a product is based on the amount of “socially necessary” labor that went into producing it. Socialists argue that because workers toil away for hours while the bosses sit upstairs and smoke their cigars, each worker is entitled to a lot more of the revenue of the firm than the boss (if indeed the boss deserves any of it). The conservative sometimes argues that the leftist has no idea how much the boss really works, and that the boss is clearly entitled to so much more because of it. But in making such an argument, they have already accepted the labor theory of value as a premise.
In reality, people wield different levels of economic potential for the same amount of effort. It is very likely true that CEOs tend to work a lot more than the people they employ. But as the leftists point out, the difference in income can be a thousandfold. It is a little silly to argue that anyone could possibly work a thousand times harder than an average full time employee. What actually justifies their income are the uniqueness of their talent and the value of the thing being produced. This is in line with the subjective theory of value. This theory is usually used by economists these days, and can be used by pro-market people to make a sort of moral argument (at least, when they are not using the labor-theory argument above).
Truth be told, though, the question of what somebody “deserves”, in the mind of a conservative or libertarian, is a bit fuzzy. It is not really a principled concept. I would argue that it is really a combination of instincts derived from both the labor theory of value and the subjective theory of value. If there is a person who is an exceptionally hard worker but has very common skills and produces something of low market value, I think the instincts of most pro-market people would tell them that that person “deserves” to make a decent living, even if the market fails to supply him with it. The worker has done everything in their power, after all, and nobody can say this person is lazy. However, the subjective theory of value still plays a role here, as pro-market people probably would not tend to say this person “deserves” to be rich. On the other hand, somebody who strikes a gold vein in their back yard will be handsomely rewarded by the market, and I suspect nobody of any political persuasion would consider that this person “deserves” to be rich, even if libertarians and conservatives agree they are entitled to it.
