The Vedanta Sutras, commentary by Sankaracharya (SBE34), tr. by George Thibaut  at sacred-texts.com
35. If it be objected that it (viz. the Lord's having regard to merit and demerit) is impossible on account of the non-distinction (of merit and demerit, previous to the first creation); we refute the objection on the ground of (the world) being without a beginning.
But--an objection is raised-the passage, 'Being only this was in the beginning, one, without a second,' affirms that before the creation there was no distinction and consequently no merit on account of which the creation might have become unequal. And if we assume the Lord to have been guided in his dispensations by the actions of living beings subsequent to the creation, we involve ourselves in the circular reasoning that work depends on diversity of
condition of life, and diversity of condition again on work. The Lord may be considered as acting with regard to religious merit after distinction had once arisen; but as before that the cause of inequality, viz. merit, did not exist, it follows that the first creation must have been free, from inequalities.
This objection we meet by the remark, that the transmigratory world is without beginning.--The objection would be valid if the world had a beginning; but as it is without beginning, merit and inequality are, like seed and sprout, caused as well as causes, and there is therefore no logical objection to their operation.--To the question how we know that the world is without a beginning, the next Sûtra replies.