Money and Recognition: The Two Axes of Compensation

(The following observation is mine but not novel as noted at the end of the essay. The text/references came from Kagi's Research Assistant)

Compensation has two parts that work like directions on a plane. One direction is money. The other is recognition. Every job pays out along both, but the mix is different for each one. It's a 2-vector. Getting the mix right matters.

Examples abound. A doctor earns good money and high respect. Both directions are strong. A ballet dancer earns little money but receives great prestige. The recognition direction does almost all the work. A soldier may earn modest pay but gains deep honor, especially in moments of sacrifice.

Money and recognition are different goods for different kinds of merit. Paying someone in the wrong way causes problems. A wealthy person does not need more money. A person who cannot buy groceries does not care about awards. The right reward is the one that addresses what the person actually lacks.

This is an old idea, with concepts going back to at least Aristotle. He saw that honor (not "recognition") and money were separate goods. He tied each to a different kind of contribution. He warned that mixing them up causes political trouble. The passages below trace his argument.

Concept	Aristotle's Words	Source
Honor and profit are two distinct currencies of reward. In unequal friendships, each party should receive more — but not more of the same thing: the superior receives the larger share of honor; the needy party receives the larger share of material gain.	"both parties should receive a larger share from the friendship, but not a larger share of the same thing: the superior should receive the larger share of honor, the needy one the larger share of profit; for honor is the due reward of virtue and beneficence, while need obtains the aid it requires in pecuniary gain."	Nicomachean Ethics VIII.14
Honor and property are independent axes of competition. People compete for them separately, and inequality along each axis produces discontent in opposite directions: the masses resent unequal property; the upper classes resent equally distributed honors.	"civil strife is caused not only by inequality of property but also by inequality of honors, though the two motives operate in opposite ways—the masses are discontented if possessions are unequally distributed, the upper classes if honors are equally distributed."	Politics II.7 (1266b)
"Merit" is not a single dimension. Different political traditions measure it differently — by free birth, by wealth, or by virtue — so what counts as a fair reward depends on which axis of merit is being applied.	"all men agree that what is just in distribution must be according to merit in some sense, though they do not all specify the same sort of merit, but democrats identify it with the status of freeman, supporters of oligarchy with wealth (or with noble birth), and supporters of aristocracy with excellence."	Nicomachean Ethics V.3
Paying along only one axis gives poor outcomes. Each group is partly right but wrong when it claims the whole.	"All those who dispute about the forms of constitution assert a part of the just principle."	Politics III.9 (1281a)

This article's two-axes presentation is not original. For example, Nancy Fraser, in Redistribution or Recognition?, proposes a two-dimensional theory of justice in which economic redistribution and cultural recognition are distinct, irreducible axes. Her redistribution and recognition map directly onto the money and prestige axes described here.