My Three Standards

• Contributive Standard: The contributive standard distributes income based on a person's contribution to production. Those who produce more valuable goods receive more income. Suppose, for example, that Alicia Hyfield, a fast food employee, contributes $5 worth of taco production each hour to Waldo's TexMex Taco World. In contrast, Harold "Hair Doo" Dueterman, a professional baseball player, contributes $10 million worth of entertainment production each year for the Shady Valley Primadonnas baseball team. The contributive standard means each receives income equal to their contribution to production. Alicia receives $5 per hour and Hair Doo receives $10 million per year.


• Equality Standard: The equality standard distributes income equally to every person in society. Everyone--every man, woman, and child--receives exactly the same income--no more, no less. Suppose, for example, that a hypothetical nation like Northwest Queoldiolia has a population of 1 million people and produces $10 billion worth of goods and services (and thus generates $10 billion worth of income). The equality standard means that each person in the country receives $10,000 of income ($10 billion divided by 1 million). Everyone receives exactly the same income--no more, no less.


• Needs Standard: The needs standard distributes income based on how many goods and services members of society require. Some people need more goods and services, and thus need more income. Others need less. Suppose, for example, that Dan Dreiling spends eight hours a day installing drywall in residential homes, apartments, and office buildings--a physically demanding job, especially for a muscular 6' 4" man like Dan. He burns a lot of calories and needs a lot of food. In contrast, Maryann Mattingly, a petite 4' 10" administrative assistant, spends her working days seated at a desk shuffling papers from one file folder to another. She burns far fewer calories than Dan. The needs standard is in effect if Dan receives proportionally more income that Maryann to purchase the necessary extra food.

A Mix of Standards

• As a market-oriented capitalist economy, the United States uses the contributive standard as a default for most income distribution. More productive people generally receive more income. Hair Doo receives more income than Alicia because he contributes more to production.


• However, the equality standard also comes into play. In some cases, policy makers enact income redistribution programs based on the conclusion that the rich are too rich and the poor are too poor. This view provides the basic logic behind a progressive income tax system, in which tax rates are higher for people with more income.


• The needs standard also surfaces in particular circumstances. This, for example, is the basis for the welfare system of income transfers to the poor. Income is redistributed to families, mothers, and children based on their needs. For example, Lisa Quirkenstone, a single mother of five, receives a larger monthly welfare check than Pollyanna Pumpernickel, a single mother of two.

Beware the Imperfections

A Normative Distribution