The investor in Facebook, and the one in Pets.com could very well be the same person, making a very mediocre return. If, on the other hand, the investor manages to only invest in successful enterprises, thereby enabling a huge amount of consumer surplus, they should probably be rewarded (and permitted to enable even more consumer surplus in the future).

I agree with the point you're making but I think this is a less than ideal example:

>Did an early investor in Facebook do more work than an early investor in Pets.com?

It's quite possible that an investor who does more research, spends more time networking with smart young people, etc, would have to do more work in order to invest in better things.

And even if not, meritocracy means rewarding the quality of work, not just the quantity. Making smart investments should pay better than making dumb ones, even if it's not more work.