The Millennial generation has been described as hating competition, or at minimum misunderstanding it. According to this theory, they were raised on participation trophies which engendered a “no-one loses” culture.

In an alternative theory, they are so meritocratic that they become hyper-stressed at the sorting, sifting, and ranking by schools, universities, the workplace, and social media that they feel institutionally compelled to strive, perform, and achieve even though they are not comfortable with doing so.

It’s probably futile to attempt to capture the feelings and motivations of an entire generation, which perhaps accounts for the wide disparity in theories. But there is consistent data from surveys and behavioral analysis (such as in voting for Bernie Sanders) that the Millennial generation is warm to the idea of socialism and skeptical about capitalism.

Disparate Information Results In Disparate Outcomes.

F. A. Hayek, in Law, Legislation and Liberty, anticipated Millennials’ discomfort with free markets. The “no-one loses” culture is, he declares, contrary in principle to free markets. The moral energy of the market applies at the individual level. Each of us is free to use the information available to us in order to design our service to others in the pursuit of rewards. Often, this information is not known to others. The individual uses education, and knowledge of time and place and existing circumstances, as well as the history of his or her predecessors in their position, in the process of choosing how to contribute in the marketplace. There are billions of other individuals who have different knowledge, and they are making equally unique choices on the basis of their unique information. The outcome of these simultaneous and interacting choices based on disparate information can not be known.

The Economic Game.

Hayek compares market activity to a game. In fact, he employs the Oxford English Dictionary definition of a game: “a contest played according to rules and decided by superior skill, strength or good fortune.” Like any game, winners and losers are not pre-determined. And outcomes can change as circumstances change, often unpredictably.

In the case of “the economic game”, the players participate because doing so improves the chances of all, and leads to “an increase of the stream of goods and the prospects of all participants to satisfy their needs”. But the outcome for any individual is not guaranteed. And Hayek emphasizes the role of luck: rewards may have no connection with merit, and might therefore be thought – erroneously – to be unjust.

Within this economic game, there is a particularly important role for “negative feedback”. (Hayek points out that economists have recognized the role of negative feedback for a long time, and cites Adam Smith as one of the first to see it clearly.) Negative feedback means that some players in the game will find out that their efforts have been misdirected. Negative feedback tells players what not to do. They are forced to change their tactics and look elsewhere for new means to achieve their goals.

At the same time, some players will find out that things have turned out better than they expected. The disappointed players may resent those whose rewards are higher. But that does not mean there is “injustice”.

The economic game proceeds, as do all games, according to rules and information that guide the actions of all players. The aims, skills and knowledge of those players are different. The consequence is that the outcome will be unpredictable and there will regularly be winners and losers. Some will have to change their mode of play – but they could not have foreseen this in advance. They must adapt. This is not a matter of merit. In spite of the best efforts of which they were capable, and for reasons they could not have known, their efforts were less successful than they had reason to expect. Doing the “right” thing cannot always be a matter of merit – it’s determined independently by the market in a way that the individual can not know in advance.

And for those that win, there is no “unearned” benefit. Each individual’s share of the total product of the market that, in Hayek’s words, “accident or skill assigns to him” will be as large as we, as a population all playing the game, know how to make it. The determination of the magnitude of one individual’s reward “does not depend on anyone’s will and desire, but on circumstances which nobody knows in their totality”.

It is easy to imagine that a generation brought up on “participation trophies”, not understanding the role of competition, might be uncomfortable in these circumstances. Because they are hyper-sensitive to sorting, grading and ranking, they might want to be protected against what Hayek calls “an unmerited descent from the material position to which they have become accustomed”. On the contrary, the obligation is to “abide by the results of the market when it turns against us”.

In The Economic Game, There Is No Such Thing As Social Justice.

Many Millennials are often identified as Social Justice Warriors. Hayek’s conclusion is that we must resist all thinking about so-called “social justice”. In fact, he calls the chapters of Law, Legislation and Liberty from which the foregoing quotes have been drawn The Mirage Of Social Justice. The word justice is inapplicable to a game where the knowledge, skill and luck of the players are different. He sounds very modern when he says:

It seems that among the younger generation the welfare institutions into which they have been born have engendered a feeling that they have a claim in justice on “society” for provision of particular things which it is the duty of that society to provide.

Such a claim is meaningless. First, there is no such thing as society. This personification suggests that society has a will, and can act to direct outcomes in a specific way, which is not the case. The market creates equal chances for individuals to play the game, not certainty as to which of them will benefit from the outcome. If it were otherwise, if government is used as a method to determine outcomes, it will result in “the destruction of all values of a free civilization”. Why? Because only a totalitarian government can attempt to exercise this kind of control. Freedom means that, in some measure, we entrust our fate to forces we do not control.

Hayek feels so intensely about this that he uses very strong language to make his point. The idea of social justice, he says, is the product of “primitive thinking”. It is “vacuous” and “naïve”, and the concept is “empty” and “meaningless”, and even “fraudulent”. And the possibility of its translation to coercive acts of government is “the greatest threat” to civilization.

The Millennial generation’s desire for participation trophies, and fear of sorting, sifting and ranking, is the source of that threat.