What would happen if wealth were distributed based on how hard each person tried to contribute to society?

Interesting idea; Its almost like a socialist/communist model with ...

I think the whole thing would break down. The truth is, nobody cares how hard you work, as long as you have good results. This might sound wrong, but if you think about it, that's the only way society can operate. Imagine you are having a heart attack; would you rather be treated by a lazy doctor that because of his talent, ends up being a great doctor (like Dr House), or would you rather be treated by the hardest working doctor in the world; which due to limitations such as low confidence or not enough time to study, is not such a great doctor ? Besides, the very concept of "working hard" is very vague. I myself came from a poor background, but after a lot effort was able to increase my income by manifold  But I still have many childhood friends in poverty, so I've been trying my best to help then. Believe me when I say, these guys work REALLY HARD (in terms of working hours and intensity). A lot harder than I work actually. I tell them that if they work as hard in studying IT, they will be very wealthy very soon; but for some reason they can't apply themselves to it. I noticed that if you ask one of them to work for 12h per day for months they will do it, no problems. Ask them instead to read 1 book by the end of the month, and you never heard back from them. I realized that deep down they believe themselves to be dumb. I don't think they really are, but I can't find a way to prove it to them. Reading books they don't understand reminds them of how "stupid" they are, so it becomes a very painful experience. Working 12h + is not as bad experience, they feel useful and have a sense of achieving something. I am mentioning it because that raises the it of what "hard working" really means. If it means working long hours and/or intensely, then my friends are indeed very hard workers and unfairly paid. But if it means focusing of what is really their career bottleneck, no matter how psychologically painful it might be, then my friends are very lazy indeed. Capitalism reward the later interpretation of "hard work", whereas your thought experiment would reward the first interpretation.

The problem with that idea is that it requires a single, economically omnipotent entity controlling all commerce and production. Capitalist companies can't afford to give paychecks for effort, they stay in business because they produce things that people are willing to pay for. If you're paying a lot of money to hard-working employees who produce little, you'll be out of business.   Then there's the problem of control and directions. In this scenario, production couldn't be run by companies (as pointed out earlier) it would have to be run by state-owned factories. Even if we assume the government officials weren't corrupt (and that kind of power tends to breed corruption), who determines how much of each good to produce? In a capitalist system, scarcity of any product means that prices increase, which means that there's economic incentive to build more factories so you can make more money. In this system, there's no incentive to start a new company. As long as you're working as hard as you can, you don't make more money for taking initiative or taking risks. And is it public money being spent to build new factories? Who has the right to make those decisions? They'd better be fully incorruptible and universally wise, or we're going to have big problems.   In essence, this is a big part of the reason communist governments tend to fail. Economies don't just need hard work, they need direction and proper guidance. Capitalism accomplishes that by rewarding those who take the right risks and make the right decisions. A system that disconnects those decisions from a financial reward leaves people with no reason to do anything different than they've always done. That not only kills innovation, but it makes the economy completely unable to deal with changing conditions. And conditions always change.   BTW: There's a story told that early steam engines moved so slowly that children were hired to turn the valves back and forth at the beginning and end of each stroke. One little boy got very bored of this and wanted to go play with his friends, so he figured out an arrangement of ropes that would make the engine turn its own valves, and went off to play. Thus was the self-regulating engine born.   Now, that's probably apocryphal, but the principle is true. Intelligent laziness, the desire to get the greatest award with the least effort is at the forefront of invention and human development. It's entirely selfish, but ironically benefits the whole world. If dumb, plodding labor is valued more highly than clever innovation, what behavior are we promoting?

One person digs a hole in 3 hours, the other a same sized hole in 1 hour. Which one worked harder? The first. Which one is more efficient? The second. Which one would you employ to dig holes for you? The second. Society rewards the output, not the input. It rewards the efficient over the effective. Hard work should be rewarded only to the extent that it is efficient.