I’m a big fan of Richard Bookstaber, the author of the important book A Demon of Our Own Design. And while I’m glad to see a rare new post from him, on how to deal with the matter of inequality (as in whether to deal with the problem ex ante, by creating more equal opportunities, or ex post, by trying to reduce disparities of outcomes), I found one of the core parts of his discussion, on merit and meritocracy, to be maddening. In fairness, this isn’t Bookstaber’s fault; he’s working within an established framework of thinking on this topic.
Repeat after me: in complex societies and organizations, merit is a complete illusion. We nevertheless pretend to achieve that for reasons of institutional legitimacy, and also, to the extent we can generally steer people who are fitter on some key axes towards more important or resource-intenisve activities, for reasons of efficiency. Note that this view is also likely to be more satisfying for individuals, since it will encourage those who may be less capable in certain ways that are considered important (intelligence, social skills, empathy) to apply themselves to do better in those areas. So motivated but less “talented” people have an avenue for their energies (il faut imaginer Sisyphe heureux…).
But let’s not kid ourselves that an idea that has all sort of upside as aspiration and ideology actually works. Consider what Bookstaber writes, which one can take as an reasonably orthodox view:
I have written various posts on social policy related to the question of whether and how we redistribute income….
I think of income redistribution as an ex post policy. Another approach is to make ex ante adjustments to level the playing field, and then step away and let the chips fall where they may. When properly executed the ex ante approach is consistent with a meritocracy, and indeed creates a better, deeper and more successful meritocracy than ignoring the differences in essential endowments.
Assume that there is an objective standard for merit, and a test that correctly ranks the subjects in terms of that standard. (For the record, though basing merit on a testing regime is common in many societies, I do not advocate it). Also assume that we can identify the factors that govern success on the test that are within the control of those taking the test, such as how hard they work, as well identify as the factors that are beyond their control. Given these two assumptions, one scheme for the redistribution, suggested by John Roemer (and in this short post I cannot do justice to his argument and stray from it in various respect), is first to define what constitutes the endowment of important characteristics that are outside a person’s control, and then assign people to cohorts based on their levels of this endowment. For example, if the endowment is parents’ wealth and parents’ education, we place people into cohorts based on the level of these two factors, with the cohorts made narrow enough so that we can take all those in each cohort as being the same with respect to the endowment.
The example he later uses is a tennis player, where a mediocre but highly trained and motivated individual beats someone with vastly greater native ability. Bookstaber regards this as a poor societal outcome and proposes ways of thinking about how much to invest in each person that are arguably fairer but also better in terms of overall results.
What bothers me about this level of abstraction is that it ignores the salient element of modern society: an extreme degree of role specialization in jobs. Emile Durkheim discussed this in his book The Organization of Religious Life. He called pre-modern societies “mechanical” because everyone was an interchangable part. Modern societies were “organic” because different people could do different things, based on their inclinations and skills. The community is richer because we have opera singers and sports players and other entertainers, as well as people who are good at their crafts or at running or being in a specialized field.
So what exactly is talent? Educated people like to think of it as intelligence, and that intelligence will be reflected in better educational attainment. But education in America has a lot of credentialing and is mixed in terms of substance (there’s a very strong argument to be made for the educational system that Bonaparte implemented in France, which has sadly decayed beyond recognition, where it made a systematic effort to find smart kids, no matter how poor their background, and track them so that they had as much opportunity to get into the Grandes Ecoles as children who grew up with highly educated parents. Bonaparte is arguably the father of meritocracy as a paramount organizational principle, and that meant uniform delivery of educational “product” throughout French schools. The same lesson would be taught to all fourth graders at 3:00 PM on a particular day all across the country). And “intelligence” is not all of a muchness; it has numerous components that are not well understood or analyzed (testing makes a stab at that on assessing verbal versus mathematical skills). And that’s before you get to the importance of social skills and emotional intelligence. James Heckman stresses the importance of socialization, that students who get GEDs (they pass a test that demonstrates they have mastered the material needed to get a high school degree) do markedly less well than students who complete high school.
So we have a huge range of things that people who have some ability and a reasonable self-discipline might aspire to (and that assumes young people know themselves well enough to gravitate to roles in society that they actually can perform well at). So how can you think about “merit” for jobs as different as computer programming versus writing ad copy versus selling heavy machinery versus being an office manager in corporate cube land?
And achieving meritocratic outcomes within an organization is a hopeless task. As we wrote in The Conference Board Review in 2007:
Consider the experience of OaklandA’s general manager Billy Beane, the hero of Michael Lewis’s Moneyball: The Art of Winning an Unfair Game. The baseball industry has always measured players’ skill and achievements by a handful of well-known statistics, but in recent years researchers have questioned the value of those traditional measures. To make the most of a limited budget, Beane used the new principles to sign low-salaried players whom his analysis showed were dramatically undervalued. The result: The team, with one of baseball’s lowest payrolls, has placed first or second in its division each of the last eight seasons…
Here, then, you have a business where the recruiting is unusually transparent, the basic rules have remained unchanged for decades, competitive encounters are in full view, and the incentives for success are high. This would seem to be the perfect environment for developing good decision rules, yet the entire industry was largely wrong…
OK, so diversity programs may not serve the people they are designed to help. One of the reasons is that these initiatives are assumed to undermine merit-based hiring and promotion. Indeed, as [Stanford professor of neurobiology Ben] Barres points out, citing research, “When it comes to bias, it seems that the desire to believe in a meritocracy is so powerful that until a person has experienced sufficient career-harming bias themselves they simply do not believe it exists.” But the idea that an organization can be truly meritocratic is, alas, a fiction.
On a practical level, the best a company can hope for is that, taken as a whole, the people it hires and promotes are “better” — as defined by the company—than the people it rejects. On an individual level, the role of luck, combined with inherent shortcomings of performance-appraisal systems, make it impossible to have confidence in the fairness and accuracy of any particular staffing decision…
Other factors can thwart an organization’s meritocratic efforts (many of these observations derive from a 1992 paper by Patrick D. Larkey and Jonathan P. Caulkin, “All Above Average and Other Unintended Consequences of Performance Appraisal Systems”). Many people, for instance, run up against conflicts between individual and organizational interests. Implicitly, any employee’s job is to serve his boss, when his check is actually being cut by the company. If the employee views his role as being different than his boss sees it, the boss’s view prevails, whether or not it is correct. In an extreme case, if the boss wants the employee to run personal errands, and the employee refuses, he runs the risk of getting a negative review.
There’s the Peter Principle conundrum that the skill requirements at one level may bear little relationship to the demands of the next. You’ve heard the old chestnut, “Promote your best salesman, and you lose a good salesman and gain a lousy manager.” But this situation puts bosses in a real bind. If you promote the person who is best in a department, his skills may fall woefully short of the requirements of his new role. But if you promote the person you deem best suited for that job, and not the top performer at his current role, you will demoralize his former peers, create resentment against him (undermining his authority and effectiveness), and raise questions about your judgment.
And then there are difficulties in ranking employees across organizational units. Even though organizations want consistent ratings firmwide, it’s a practical impossibility. There are considerable barriers to a manager giving his staff member honest and useful feedback that lead to inflated ratings. They have an ongoing relationship; and thus both sides do not want the review process to create friction. Yet most employees have an inflated view of their achievements, which predisposes them to doubt, perhaps even resent, a truthful appraisal. And since the assessment of a job of any complexity is largely subjective, it’s difficult forthe boss to defend a rating that is at odds with the employee’s self-assessment. In addition, managers consider themselves at least partly responsible for their subordinate’s performance. Thus a low rating reflects badly on them.
The consequences are profound. It means that the typical defense against the failure to achieve diversity, that the company was in fact hiring and promoting based on achievement, is hollow. These systems not only are subjective (inherent to most ratings) but also often lead to capricious, even unfair results.
And there is evidence that subjective processes set a higher bar for minorities and women. For example, a 1997 Nature paper by Christine Wenneras and Agnes Wold, “Nepotism and Gender Bias in Peer-Review,” determined that women seeking research grants need to be 2.5 times more productive than men to receive the same competence score. In 1999, MIT published the results of a five-year, data-driven study that found that female faculty members in its School of Science experienced pervasive discrimination, which operated through “a pattern of powerful but unrecognized assumptions and attitudes that work systematically against female faculty even in the light of obvious good will.”
So here you have the worst of all pos sible worlds. You want to achieve diversity, if for no other reason than to forestall lawsuits and present a better face to your customers. Yet you have long believed the main reason is that you haven’t been able to find enough “talented” members of the various groups to fill out your managerial ranks. But your performance-appraisal system is subjective and probably unreliable, and the complex nature of organizations means that who rises is largely arbitrary, and it is likely that “out” groups are subject to higher performance standards. All this to say that women and minorities’ frustration at their failure to achieve reasonable representation may well be completely justified. Your organization may be guilty as charged.
One of the revealing things about this now-seven-year-old article how the big concern then about unfairness in hiring and promotion related to race and gender discrimination. It’s astonishing how the top income strata have so visibly pulled away in the wake of the crisis that economic mobility is now seen as at least as big a barrier to opportunity.
So while it makes sense for all sorts of reasons to aspire to meritocracy, the fact that it can’t even remotely be achieved even when people of good will make genuine efforts means that what Bookstaber called ex post solutions are critical. In other words, tax the rich. They don’t deserve it.
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These are excellent points about the difficulties of meritocracy inside organisations. But I think there’s a deeper problem, too. What Billy Beane tried to do was measure contribution to winning baseball games, and used this to figure out how much players should get paid. But what theoretically needs to be measured in an economic context to be meritocratic is marginal productivity in terms of individuals’ contribution to making money. Therefore, the measure of merit depends on the price system. But if this is to be morally meaningful the price system itself has to be morally meaningful. And it’s not! The money the “best salesman” makes for a luxury car dealership depends fundamentally on the availability of well-heeled customers; even in ideal remuneration system within the dealership doesn’t address the fact that it’s rewarding success in an economy based on incomes that derive from bargaining power, not on anything recognisable as merit. So I think the drive for meritocracy is harmful not only because it distracts from ex ante taxation, but also distracts from all the unreasonable ways bargaining power structures earning opportunities.
David
Great point. In case anybody doubts the amoral (immoral?) nature of the price system when it comes to wages, just check out how much a Wall Street exec. makes as compared to, say, an architect or mechanical engineer (hint the WS exec. likely makes more in a year than the architect makes in a lifetime).
That’s what capitalism is: the favoring of capital over other factors of production such as labor or resources. So an executive in control of capital is rewarded to a far greater degree by returns on that capital, whereas the actual work of the mechanic or engineer receives a relatively paltry remuneration. The one who produces gets little while the one who produces nothing becomes wealthy beyond the dreams of Avarice.
That’s like allowing capitalists to create their own commodity. Money is sooo convenient.
That is, New Capitalists – as in financialists.
“The one who produces gets little while the one who produces nothing becomes wealthy beyond the dreams of Avarice.”
reply to Ben Johannson
October 26, 2014 at 7:24 am
I would say it is worse than that. Not only do they not produce anything, they lost trillions. Of course, we’re told by their lackeys that they paid it all back. Funny how unemployment and inequality is higher, and the living standard for the 99% is lower, but basically we should keep doing as we did because…well, no harm no foul. System works great!!!! No other way to do it….
What is amazing, just as the argument for meritocracy can’t withstand any critical scrutiny, the idea that these bankers and financiers are necessary for the efficient allocation of capital simply beggars belief. All the money came from the FED – why exactly can it only go to the primary dealers????
The “free market” far surpasses religion as a fairy tail…..
Thanks for the link. Here is a little nugget from it.
Education majors make the least, at $1.8 million, and no occupation for education majors provides higher earnings than the average for bachelor’s degree holders. In fact, education majors working in service jobs earn less than people whose highest attainment is a high school diploma
Wall Street is a continuous rolling control fraud that is ignored by the cops, because according to the cops, it resembles rocket science and is too complicated to understand. Tax the shit out of Wall Street executives, ex post, if that is the only way to stop the looting.
Comparing thievery with honest work is like twisting the knife in our backs, but is a good illustration of meritocracy in the real word.
The problem with taxing the shit, as you say, out of Wall Street executives, ex post, is that we (who want to see a little equalibrium) don’t own enough of the folks who make the tax laws.
‘…the measure of merit depends on the price system. But if this is to be morally meaningful the price system itself has to be morally meaningful. And it’s not!
Great point.’
I think so too. The recently deceased Fred Lee was doing a lot of work in this area. Trying to get at the nuts and bolts or micro part of a heterodox economy. He thought the pricing mechanism was extremely important and as stated above related strongly to things like income inequality and how society decides to distribute resources more than merely demand and quantities. And concepts such as how federal debt is funneled largely to the wealthy.
http://neweconomicperspectives.org/2014/10/moment-mourning.html
http://topics.nytimes.com/top/news/business/columns/fair_game/index.html
The more you look at the law, the more that you see it is a big grift – well designed, well crafted, well sold to allow fraud, graft, cheating, and lying as legal. And built upon an edifice taught at universities, supported by our political system, and believed in more devoutly than any religion…
Yes, indeed, it all boils out to power. This being said, redistribution schemes are part as the power game as well. They are no more, and no less, legitimate than other power tools. The ultimate arbiter is unfortunately not aggregate happiness (if happiness can be aggregated indeed), but how the nation who embeds a certain set of power relations succeed relative to the others.
This was certainly what Napoleon had in mind when creating the “Grandes Ecoles” (the most prestigious “Grande Ecole” in France was mainly designed to provide army engineers and artillery officers) and also what the French 3rd republic had in mind when setting up compulsory schooling (After the 1870 debacle, the idea was to get children who could get motivated to project France’s forces as a colonial power and ultimately fight back the German enemy).
So nu? Look at this week’s rebound; CREE is simply the latest victim of the market’s counter-meritocracy?
Why?
imagine if the individual with vastly greater native ability was nurtured to the same degree (talents were fully developed). The level of ability, the outcome, what’s produced/achieved , all rise…
I often think of the huge societal loss of potential talent, creativity, ability left undeveloped when so many grow up in poverty.
But you’re conflating two different concepts. Suppression of effort (i.e. racial discrimination) is not the same thing as a failure to make an effort in the first place. You can’t train a tennis player who doesn’t bother to show up for tryouts.
His example makes no mention of the players being selected on by external pressures, only internal motivation. To which I ask, why is it better to favor the player with no motivation over the one who actually puts in the effort?
The person making the effort has to do a calculus based on the likelihood of the effort being rewarded. Someone from a disadvantaged position has far less reason to believe their effort will be rewarded than someone from an advantaged one, thus effort is disproportionately disincentivized for the disadvantaged. At the most advantaged levels, effort isn’t even necessary for success, just putting on appropriate clothing and showing up is enough.
I also wonder why this is a poor societal outcome. I have friends and family with all manner of gifts. Those who have had the experience of not being able to coast victorious through something on talent alone, because others simply worked much harder, have all become better humans as a result!
This post raises some really fascinating questions. Consider the case of poetry writing talent. Two third-grade girls write astonishingly good poems that impress their teachers. One of them has this talent nurtured by her well-educated parents, her private school, and eventually an excellent small liberal arts college known for its strong creative writing program. She goes on to publish poetry that is enjoyed all over the world.
The other girl’s third grade teacher was eager to discuss the child’s great poem with her parents as well. Sadly, she never got the chance because the family was evicted and the little girl switched from P.S. 147 to P.S. 203 before the Parent/Teacher conference night. This girl goes on, despite many obstacles, to get an associate’s degree in marketing, and land a decent job as a real-estate broker. Her verbal competence clearly is useful in her career, but she never does get a chance to share the wonderful poetry she surely could have written with the world. Yet her stable, prosperous adult life allows her to enjoy all the same material benefits of life as our famous poet. Is this a sad or happy story?
Would we want to live in a purely meritocratic world where everyone is monitored closely at a young age, and pushed and prodded into pursuing what they are best at? How long before such a world slides down the slippery slope into resembling the Brave New World of Huxley’s imagination?
Perhaps we should strive instead to make the world a more forgiving place, where people can struggle through trying to do many things, not all of which they are good at, while never having to fear being cold and hungry.
Great comment.
Sad, or happy, indeed? And for whom — for them, or us? Yeats thought there was a trade-off between “perfection in the life, and in the work”; plenty of artists and poets followed their vocations, which doubtless had moments of ecstatic pay-off, but which were purchased with much misery. Not all, of course; there can be no ironclad laws in matters of the human spirit.
I don’t know the answer, other than to say that I agree with the general premise that we have an obligation to provide equality of opportunity to the best of our ability, and that, in our current circumstances, Yves’s prescription that we tax the rich is exactly right.
The world can handle only so many poets at once. The supply of talented poets hugely outpaces the demand. The supply has to be cut by some random mechanism.
My answer is that neither girl should be a poet. Poetry should be something that people with inherited wealth do, and talented poor people with jobs that make low demands on their time (we need more such jobs).
I agree with your argument insofar as it applies to the world as we know it. Yet couldn’t we aspire to building the sort of world where poets vastly outnumbered, say, insurance agents, or soldiers?
Who says you couldn’t be both? If you really have a passion for and enjoy something like poetry wouldn’t it make sense that it would be an outlet that you’d be able to utilize after you finished your day at the office?
I guess it could happen. The soul-crushing struggle for existence that many people endure often saps much of their creative energy. People who are blessed with supportive families and friends, who help them devote large chunks of time to creative pursuits outside of their day jobs are indeed fortunate.
Here’s a poem for a lazy NC Sunday afternoon:
Corey Zeller
2014
The river is a fish
and my tongue
is white paper
you draw
your hand on
and the sounds
keys make
on the waist
of a janitor
in an empty building
on the night of your birth
when the moon was
a live bird pinned
to a girl’s chest
and the color
of a beat-up door
that hides a paint chipped
life where we lick the throats
of passing trains
and wear bright pills
over our faces
like ghost masks
http://www.poets.org/poetsorg/poem/let%E2%80%99s-get-out-here
Sure but it takes a great deal of character which manifests in determination for that (in addition to a passion for poetry of course or else you’d have no interest in that particular life path anyway). After the 8 hours (ha 8 hours if your lucky, maybe it’s 10 hours etc.), after the commute and fighting traffic, after well let’s just assume one doesn’t have kids to tend to. And then what to write about, the day spent in the cubical staring at a screen crunching numbers or something? Modern life suffocates the life force pretty hard. It’s not that poetry is incompatible with all practical labor, but this system and the 40 hour week are hard.
Wallace Stevens?
Charles Ives?
According to whom exactly? If the world had more poets, perhaps we would have fewer financiers and warmongers. Better a sociopathic poet than a president.
“while never having to fear being cold and hungry.”
I think this is the key, Ulysses.
Having laid awake at night as a young mother and wondered how the hell we were going to pay the rent AND buy groceries, my compassion for the bottom 90 percent overrides all other considerations.
Meritocracy is just a Big Lie. Thank you for this post, Yves.
Logically, one gets rich, and stays rich, by earning more than one pays. So, out goes fairness and in comes cruelty. By now, it should be obvious to anyone that Wall Streets task is to shred outsiders claims on surplus and to safeguard insiders claims.
This was the perfect environment for developing good rules. Which is why this Billy Beane character was able to win so many games. This is classical economics: Market inefficiency >> market niche >> new players entering the market to exploit the niche >> greater overall efficiency. The process is not perfect or instantaneous because A) Nothing outside a textbook is perfect, B) Us humans are irrational, fickle, and superstitious, and you know it, and C) Any entrenched interests (governmental, corporate, trade union, etc) may have substantial interests in maintaining the status quo. But the determining factor here shouldn’t be whether the system is perfect, but whether it sucks less than the other available standards.
Its easy to imagine a rigid, heavily structured system where every baseball team is required to follow the exact same recruiting and training policies across the entire nation. Any proposed rule changes would have to clear numerous bureaucratic hurdles, committees, votes, etc. before being approved, and any changes made would hit all teams equally. In such a system, is it possible for a clever manager to recruit undervalued talent? Not really. Not legally, at any rate (and any sufficiently large market niche WILL be exploited, legality be damned, viz the illegal drug trade). It would also make for a pretty boring game, and viewership would eventually drop.
Another option is to avoid the bureaucratic hurdles by giving a small team of experts dictatorial powers over the rules of the game. New pronouncements can be made without having to drag them the mud of the endless committees and subcommittees. The challenge then becomes: where do you get the experts from? How do you determine who is ‘an expert’? Someone who has mastered the intricacies of the existing system? Is this a person likely to recognize failures in the system (such as an inferior recruiting scheme) and work to correct them, or are they more likely to stick with what they know, what they “put in their dues for”? Clearly not. Again, a culture of decadence will reign, and again, viewership will drop once the game becomes stale and boring.
But that’s not what is in place. The industry sets common ground rules, then backs off of micromanaging everything. And that leaves opportunities for a good manager to think up new techniques and thereby gain an advantage over their peers (i.e. meritocracy). But wait! Any team that gains an advantage in one season will be imitated in future seasons. So a team that wants to stay on top has to be continually developing better strategies. This makes for an interesting, competitive metagame, and brings in more viewers, ultimately benefiting the sport.
Is it perfect? No. It is better than the rigid bureaucratic scheme or the arbitrary dictatorial scheme? Yes. So given the choice, why should we want to lean to anything other than a meritocracy? What evidence is there that any other system will produce better results for an extended period of time?
And when someone shows up with neutron bat?
It’s all fun and games– until a major metropolitan area is vaporized because some chucklehead brings out the neutron bat!
There are many kinds of intelligences, but if we must pick one, for me the definition always starts with C. S. Peirce and his preoccupation with where new and true ideas come from. How did Kepler reject hypothesis after hypothesis until he finally hit upon the elliptical orbit?
Of course everyone has learned to do this, starting around the age of two by saying NO to every unsatisfactory development until we get what seems right. The deep social problem is two-fold: many people continue to act like self-centered two-year-olds. Hence, even when this sort of critical intelligence is properly directed toward external conditions, it is systemically unappreciated in hierarchical organizations, both by parents and by bosses. In this respect, as Kuhn observed, even Science is not a meritocracy.
(And, may I add, this is why Yves’ publication of hard, critical analyses here on NC is so important.)
I am coming to the conclusion that the skunk in the woodpile is not the notion of merit, a very empty abstract term, but the idea that one has a career, a profession, a talent that lasts one’s entire life and is the basis for what you do or are hired to do for compensation. And that decisions about roles in society should be organization-driven, some all-knowing single decision-maker tapping talent, finding people of merit, and compensating the according to their merit. On the compensation end, we have all seen what a competition for sycophants that can become.
The skunk in the woodpile is the compensation itself. The decision-making process has to do with deciding who is fit to live and who isn’t or with regulation who is fit to prosper and who isn’t. It is the notion of compensation-induced incentives.
I don’t have any bright ideas for alternatives, but I do think that any alternatives hinge on the idea of customers, audiences, beneficiaries of one’s labor and human activity. The market is a back-feeding information system that supplies after-the-fact information of the quantities and prices (the regulatory mechanism) that aggregates of what customers, audiences, beneficiaries desire or can be made to desire. This is a huge oversimplification of the point that any alternative needs an information system that can feed back to individuals the options for their most effective labor at a particular time or place. The issue of survival, sustenance, and prosperity is a separate issue open to a society having a different way of handling it. And as usual, all institutional forms are subject to the corruption and short-circuiting of the people responsible for the operation of the institution.
Alternatives are not a trivial problem, but neither are they non-existent.
In the old economic paradigm someone who worked hard could expect to have one career a lifetime. It wasn’t uncommon for a person to retire after working somewhere for 30 years. The new economic paradigm requires workers to be more flexible and not to even bother thinking that your hard work will be rewarded with anything other than a paycheck the particular week that you happened to work.
I suspect some of the problems we are seeing such as no preparation for retirement are the result of the adjustments to the labor market as a result of the shift. The hard thing about alternatives is that they can’t be built in a vacuum. As it is businesses have been manipulating consumers with arguing that pay increases result in price increases. I see little reason to believe the manipulation would discontinue anytime soon.
Business as usual means that the race to the bottom continues until there is mass stravation or rebellion. Or the metered starvation just short of killing people that was common in slave economies.
Indeed it is all about power, and the lever of power — money. Nietzsche wrote “How can I help it that Power likes to walk on crooked legs?”. My own experience re Meritocracy is deeply embittering I must admit. I grew up believing if you study and work hard you’ll get ahead and do well.
Nope.
Half a lifetime of experience, and 3 schools later, I’m finally beginning to aproach the top of my field in terms of ability. My compensation is at the same level it was in 1998. I work in industry and manufacturing and I will tell you that the last 20 years have been pure hell.
I’ve noticed that the whole “getting ahead on the merits” bit is popular with the Libertarians and Tea partiers. I figured I’ll just sit back and wait for them to grow up.
seems to me you can’t fully separate ex ante and ex post (I know simplification is necessary for this kind of post). ex post would ultimately “trickle down” to act as ex ante as well, because alleviating poverty can in itself allow for more equal opportunity. ie allow the poor to better foster/nurture the critical early development of their children, beginning well before school-age.
ie augment a Bonaparte style educational system with addressing the poverty so no kids growing up poor, eliminate that disparity (obviously there will still be disparity- educated parents vs not, etc) and track and equal opportunity to get into “Grandes Ecoles,” etc.
also, it’s complex, anything involving humans and their structures so aiming for a meritocracy seems worthwhile in itself, while accepting that there will be flaws, impossible to fully achieve, tweaking with more information, etc.
But re the allusion of meritocracy…the idea as more satisfying for individuals works also to foster rationalization of income disparity in (and pacify) those low on the socioeconomic scale …ie the rich got there, because smarter, more able, harder working, etc. And those high rationalize (and use) obviously, as well. We see this all the time.
I think a meritocracy argument might be brewing nationally because it was floated a few weeks ago by Obama in a comment about how he loves capitalism because it can solve all the world’s problems (let’s hope so because it caused most of them) and wants to do lotsa public-private partnerships with the meritorious. Then on CSPAN I heard Gen. Wesley Clark talk all folksy (so he wouldn’t gag the audience) about his own merits and give a big boost to our great American corporations.
I like your conclusion in the end to tax the rich since it is impossible to level the playing field given the infinite amount of variables. I also agree that by and large the “rich don’t deserve it” since they benefit from the system extant more than the average person and should thus pay more. As to the actual merit of those deserving wealth, there’s usually one for two people in a circle of wealth who actually created something or speculated successfully and that money then spreads out in concentric circles to those less deserving and that is where inequality arises. These beneficiaries can now game the system to their benefit at the expense of those of similar abilities. Vast, multi-generational wealth institutionalizes this advantage and makes upward mobility much less attainable. A big, punitive tax on inheritance goes a long way to solve the problem as long all the loop holes traditionally used by wealthy individuals are slammed shut.
If I win the lottery I would get taxed somewhere around 40%. I don’t see why we shouldn’t tax inheritance this way. After all, since we don’t choose our parents, it is really the equivalent of winning a lottery of sorts.
shit they made two “Dumb and Dumber” movies with Jim Carey and Jeff Daniels. The first was hilarious. Can’t wait to see the new one. Dumb and Dumber To
They should make a “Smart and Smarter” movie — about two “high IQ” boneheads who foist their tortured self-consistent logic on the universe and come damn close to destroying it utterly. maybe they could be two wall street quants supervised by a suspenders wearing senior director who just wants to own every asset in the world. faak. that sounds like Wall Street with Michael Douglas, but instead of Bud Foxx the kid can be a math guy who doubts the whole project. So he gets Jim Carey and Jeff Daniels hired as two “consultants” who mess up the super high frequency alogrithms so bad it saves the entire financial system from implosion and the senior director finds love and happiness living a modest middle-classs life with an unassuming elementary school teacher in a 3 bedroom ranch house in Lackawanna New Joisey. It would be hard to make a movie like this. But that’s what they said about Casablanca and it worked!
I like it!! I think you should get on the horn to Hollywood and start pitching this immediately to all your pals out there C-man!
Call Max Keiser and get it crowd funded.
Smart and Smarter?
Isnt that a Tv show called Big Bang Theory?
+99.999999…
Showing the difficulties of a meritocracy: the authors (and anyone attempting a similar study) have to assume that they possess an objective, bias free measure, in this case an acceptable measure of productivity and further that this has a direct relationship to competence.
And why measure human worth by economic productivity? And why do we need to be more productive anyway? I mean the continued progress of human knowledge is one thing, but things, what if there is already enough for everyone?
And thinking about meritocracy and productivity together you have to come around to the paradox that, since capitalism is already so unbelievably productive, some measure of merit would have to include a special set of skills at sabotaging the system to make it look like deprivation were just another byproduct of being less meritorious. Because must sustain a certain level of demand or die.
That is capitalism can saturate the market very quickly with an embarrassment of surpluses if it doesn’t have sufficient needy people to buy up all that stuff.
Did you even read the sentence???
First, universities highly prize getting grant money, even more so these days (many spots in the sciences are effectively self-funded and if you don’t bring in the grants, you are out). This isn’t a fake metric, it reflects priorities at universities.
Second, the 2.5 times as productive means HOW MANY GRANT DOLLARS THEY BRING IN.
The competence score in the University’s OWN measure.
This is about as clean as it gets and you refuse to get it.
If you look at the research paper here you would see that the study group were persons seeking postdoctoral fellowships in Sweden. The authors list six different factors they combine to measure scientific productivity, not one of which is grant dollars brought in. The 2.5 times uses the authors’ productivity measure and the evaluation committees’ competence score. The competence score was a specific number which was part of the review process for getting a fellowship, a number assigned by each reviewer and then averaged. Did you read my whole post? You declare that you do indeed
which is grant dollars brought in. Unfortunately, that measure has zero applicability to the study in question. Instead we have the authors objective etc.
All this has little to do with discrimination in academic fields, except that the examining committees claim to have an objective measure of merit (but its methodology is not revealed) while revealed methodology in the paper yields significantly different results, indicating bias.
But then, of course, I refuse to get it.
When somebody defines “merit” in some context, they act as a demi-god, triggering carrot and stick behaviors and responses. Such merit can be socially useful or socially damaging. It is just another tool for “corporate social engineering” (the imposition of a “corporate” culture that reflects the views and ambitions of the powerful leaders of the corporate entity). By definition, a Meritocracy is anti-democratic because the definitions of “Merit” are produced by the few as mechanisms of influence over the many.
If we were to think about merit as it applies to our government then it is easy to see that most of our elected officials are of low merit and therefore the system for selecting these officials is a failure. There must be a better way, and I think the ancient Athenians had it. In Pericles’ famous funeral oration he had this to say about democracy and who should run it:
I think Pericles was telling us that merit can be found almost anywhere, sort of like good ideas. He went on to say:
I think he was telling us that we all should participate in our government. One implication of this latter passage is that an Athenian citizen, should he choose to take part in politics, would not be useless—his efforts would make a difference. But in our system if we vote or express our opinion we soon learn that we have no effect on our government. This makes us feel useless and frustrates us because we have nowhere else to turn.
Socrates, who was no fan of democracy was quoted by Plato (who was disdainful of democracy) as Socrates was talking about the Athenian Assembly:
It seems to me that Socrates gives us plenty of data to work with. He said that we should resort to expert advice whenever we can, and that those who are rich, or good-looking, or well-born, or personable, or charismatic should be ignored unless they have proved over time and in public that they are worthy of attention. Only those men who demonstrated their worth should be listened to. But, and this is a really big but, only the people, after listening to the experts, are capable of deciding whether to take their advice, and if they do, to decide how to apply it.
James Madison and the other Framers failed to understand that only the people, in the aggregate, are able to understand their society in all its dimensions, and this knowledge, freely exchanged and sensibly considered, is needed to properly evaluate the status of society and to develop and implement ideas that will correct and improve it. Only the people, as new generations replace old ones, have the knowledge and the ideas to evolve a stronger and stronger society. Only the people have the knowledge, and the natural interest, to make sure that their government is operating so that ideas from all sources can get a fair hearing. Only the people can make sure that their government properly administers the laws they create. Only the people have the knowledge, and the natural interest, to define and implement fair play throughout their society. Only the people can define and implement the common good.
So the question of what to do about our bad government is clear: we must adopt and adapt the superior features of Athenian democracy.
It would be fantastic if we could do as you suggest, but I fear that our society today in the U.S. is too far different from Periclean Athens to accomplish this. How do American cobblers, carpenters, and sailors get up and have their say so that more than 300 million fellow Americans can benefit from their good advice? Do they just show up at Rockefeller Center and demand airtime on national T.V. from NBC?
I know of some small towns where something a bit like Athenian democracy is occasionally practiced. Dryden, New York was able to ban fracking only because it has retained enough of an open, democratic culture to allow this sensible step to be taken– due to popular demand. Yet the industry immediately sought to overturn this, and it is only the extreme good fortune of a rare, non-corrupt judge upholding the ban that has allowed this little example of Athenian style democratic decision-making to stand, at least for the moment.
Your points are well-taken if the Assembly was the only organ of government in ancient Athens. But even with their small population, they found that other functions were needed to make the government work. So all of these functions, taken together and including the Assembly, can be made to serve a larger population by means of modern technologies. Two others organs of government in ancient Athens are widely used in America today. In fact, you can’t escape them, they figure constantly in every national newscast right now–every day, several times a day..
Converting our current government to adopt and adapt the six superior ideas of Athenian democracy would be very easy to do and a prototype could be working in a very short time. In a way, this blog and thousands more like it could easily be converted to serve the same functions as the Athenian Assembly.
The problem is not technical, it is human nature.
Human nature, or the avarice of the power hungry few?
“Human nature, AND the avarice of the power hungry few?”
Fixed it for ya.
Are you sure the Framers even tried? Perhaps the system they desired was to reboot ancient Rome and sit as its patricians.
Yet, today, laughing and hooting is exactly what we must do to the entire political class, without relent, in order that they sit down, shut up, and listen. We don’t need to empower leaders. We don’t need to empower managers, however hard the manager class has tried to have us believe otherwise. We need to empower administrators, and we need to empower ourselves to fire them summarily and instantly for looking at us with insufficient respect.
This is a fascinating subject, and not one often broached due to political correctness constraints. There are different levels or meritocracy to look at; three I can think of are athletics, academics, and societal power. One immediate problem is that once we get past the subjectivity in defining the criteria for deciding merit, a “true” meritocracy would not necessarily lead to politically correct results. And by that I mean the resulting elite or social structure will not necessarily “look like America” where each race, gender, sexual identity, ethnic tribal identity, and social class are proportionally represented. One area where merit is slightly more objective is athletics (I’ll get to the Moneyball point in a minute), but especially here meritocracy results in hugely lopsided gender and racial imbalances, especially at the elite levels.
For example, as a result of sexual dimorphism, (men have on average 15% more body mass), women are absolutely unable to compete at the same elite level as men in athletics. At elite levels men run 10% faster than women and lift 30% more weight. So separate but “equal” categories are created to allow women to compete between themselves (and now the occasional transgender ex-man). Only in equestrian events are men and women allowed to compete head-to-head. Even in such non-physical events as chess there continues to be separate domains for men and women (although in this case the top women are allowed to compete against men).
But even among men the results of limited meritocracy lead to huge racial disparities. Since these disparities are often in favor of historically excluded minorities, they are usually celebrated. But the fact is, if the goal is a “looks like America” racial balance, then just like with foreign trade, where the German surplus must be balanced by someone else’s deficit, if one group is overrepresented, that means by definition another group will be underrepresented.
So the NFL is around 67% black and the NBA is almost 80% black. Are these sports perfect meritocracies? No, but they approach it pretty well. There hasn’t been a white starting cornerback in more than a decade in the NFL. Is this a result of prejudice or oppression? Probably not. Is it a cause of concern? Not really, just like the absence of black punters and kickers isn’t worrying most people.
But what about Moneyball? Doesn’t that prove sports are far from objective about deciding merit? First off I am a huge Oakland A’s fan; I grew up not far (but not TOO close either) to the Oakland Coliseum. Despite the fact that I have a partisan interest here, there is no doubt that Sabermetrics and Money Ball are hugely overrated. The Oakland A’s success in the early 2000’s was based primarily on having three great starting pitchers. One other key to success is that the A’s were forced to give up players (especially pitchers) because of financial constraints just as they hitting their sell-by date, thus the A’s avoided wasting money on huge contracts for soon to be useless players.
But one factor often overlooked is that the rise of Moneyball coincided with the rise of steroid use in MLB. Moneyball basically valued walks and homeruns over stealing bases and defense. But as steroid use declined, so did the advantages of Moneyball. Worse though, filed under the heading unintended consequences; baseball is first and foremost a form of entertainment and seeing big dumb boring guys taking lots of pitches before they eventually end up walking or striking out – or every once in a while they hit a homerun, is kinda boring; which isn’t good for a sport that is already pretty boring. Look at the success of this year’s surprise team, the small market Kansas City Royals are the antithesis of Moneyball with all their bunting and stealing bases. Surely a Rickey Henderson type player is far more exciting than a Dave Kingman. In any case, over time, the traditional small market Oakland A’s from the 70’s and 80’s outperformed the small market Oakland A’s of Billy Beane.
So from sports we see that a move towards meritocracy does not necessarily end up with results that “looks like America”. But what about in the academic realm? Here merit is assigned by means of faintly disguised IQ tests and school results. In NYC, four year old children have to take IQ tests to be get places at the most elite primary schools. Currently, two small minorities, Jews and Asians, are hugely over represented in elite placement in top US universities. In some Ivy League medical schools, Asians and Jews each take around 25% of the places based on some sort of imperfect intellectual merit. Of course if it were based on pure intellectual merit Asians would capture even a higher percentage. On the other hand, Blacks and Latinos are guaranteed a few places based on something close to their population percentages. This leaves Gentile whites disproportionately underrepresented. On the other hand, on the more global level, women acquire roughly 57% of university places; leaving men with only 43%. Is this fair? Maybe it is or perhaps a conspiratorial male gender tribalist would point out that women teachers dominate primary (and less so) secondary education and so perhaps the matriarchy is shifting the playing field (rewarding traditional female qualities while punishing typical make behaviors)?
But a truly problematic area is social power. What merit could possibly define the grossly unequal power held by some individuals and small groups? Before we get to that, why not look at from an historic perspective, some of the alternatives to meritocracy? I can think of three, although none of these would be directly applicable to a modern complex society, they at least give a few hints of possible directions.
The first would be Classical Athens, where among citizens (males, perhaps 30% of the population), in order to keep an oligarchy from rising, for many important positions lots were drawn. No credentialism, no Ivy League degrees, volunteers put their names in a hat and the selections were made randomly. But this wouldn’t work for the critical position of strategos, where military ability was essential, so ten strategoi were selected, and they had to work as a committee in order to try to avoid that one gained so much power as to impose his rule on Athens.
In Africa, before Islamic and European colonization, and even sometimes after, one way of avoiding leading families from taking over and establishing an aristocracy was through the use of age sets. Certain powers and duties would be set aside for different groups depending on their age. As people got older their responsibilities changed. Exceptional individuals would be listened to more carefully but they were always just one within a group of many. Exceptional individuals could not pass any power down to their children or allies. This was one of the ways Africans were able to have small cities without citadels: villages or towns without an apparent hierarchy.
The most interesting way though was during the early Ottoman Empire, where by kidnapping young Christian children and converting them to Islam in the capital city, they created a fanatically loyal slave military elite called the Janissaries. Slaves from the Ukraine, as well as from the Balkans became a sort of Republican Guard for the Sultans. Women became sex slaves or were deposited in a harem, and sometimes their children could rise to become Sultan themselves. The slave groups would compete among themselves and the best rose to the top. This was a very stable system and was used throughout the rise of the Ottoman Empire. Individual soldiers could gain power and land but they could not pass it on to their children. Once they passed away their estates were passed on to a new generation of soldiers. Eventually the system broke down, a conservative landed aristocracy rose, and pretty soon the Ottoman Empire was the original sick man of Europe.
So although none of these three examples are directly applicable to the US, what they show is that “merit” and oligarchy are closely linked. What’s interesting is that in sports, you really don’t see much nepotism, or an athletic aristocracy; sometimes the children of athletes are able to compete at the highest levels, usually not though. Wealth doesn’t seem to make much or a difference either, how many rich parents hire expensive quarterback coaches only to have their kid not even be able to make the team. For academics there is much more of a link. Educated parents pass on their genes and attempt to instill study habits in their children. It doesn’t work all the time but generally the children of college educated people will go on to college.
Sports and academics besides, the key question is the link between power and merit. Doesn’t the process of acquiring power in and of itself legitimize the merit behind this power? And once this power is acquired, only a counter-power can stop it being passed on within a family or clan. If a society allows individuals to acquire power, then the society needs to suffer the consequences of their inability to manage power. The three historic examples show societies actively managing access to power by individuals, or small groups. How does a large complex society manage to guard power for itself, and to limit the power available to selfish individuals and groups, who will only turn this power against the very society it arose from? I don’t know the answer to that but in resolving this question, the dilemma of how to get a meritocracy to “look like America” comes much simpler: the more power is kept at the societal level, the more it will automatically “look like America”.
back in The Day when I was a kid the Redskins used to have a 5′ 8″ 170 pound white dude who played corner, Pat Fischer, and he could cover Eagles wide receiver 6’7″ Harold Carmichel — quite well!
I’m bigger than that, but I think if I got tackled one time by an NFL player several bones would break. Maybe I’m just chicken.
They said he had a routine he did each day — he memorized a new word in the dictionary. Then evidently he became a successful stock broker after the NFL.
It just goes to show you. if you wanna be a successful stock broker it might be a good idea to read the dictionary. I’ll never be a stockbroker at this point or a corner in the NFL, but reading the diccionary sometimes is worth it
It’s hard not to view that success as earned, three succeses — NFL corner at 5’8 170 and a white dude; stock broker and successful dictionary reader.
I heard or read a story once about an Aborigine in Australia being told about Western sports. He listened to the translator and then shook his head. “What sort of fun is this”, he asked, “where for one person or group to win, everyone else must loose? It wouldn’t work for us at all.”
It isn’t clear to me that competition is all bad, perhaps it’s just too much part of my upbringing, but the Aborigine, assuming the story is accurate, has a point. We seem to have gotten the goals mixed up. I saw the French system in the early 70’s. Effective or not, there was something both frantic and really cold about it. It also seemed (purely anecdotal) that kids whose families were in the educational loop were almost guaranteed a place at the very secure and generous table of fonctionnaires or civil servents whereas farmer’s kids, for instance, had to really be star quality bright to make the team.
Yves, I’m curios as to whether you would do a post someday with explicit policy recommendations? Dictator for a day kind of thing. Not to put you on the spot, but while I tend to agree with many of your insights in principle, the devil is always in the details. My pessimistic leanings make me look for holes in the story. The law of unintended consequences and all… what are your Day One ideas for education, spending/mmt, bank reform, inequality, etc. I don’t doubt your intentions (I’m a long time reader with a background in one of the topics you cover and I greatly value your integrity) but in the back of my mind I have images of a socialist utopia going astray. Btw – a secondary request would be to dumb it down a bit. Explain it to Joe the Plumber. Thx.
Some ideas may work better than others, but I don’t know if there is any social organization one can guarantee won’t go astray. We’re astray now in simply huge ways. Ways enough to condemn the system as a “capitalist” utopia gone astray.
Word to Yves.
I feel, (there’s that word again,) that one of the lady’s points is that these ideas do not need to be dumbed down if the reader is willing to invest some time and effort in learning the background. Maybe something like a NC syllabus would be useful. (Many times, the act of “dumbing down” a subject allows “experts” to manipulate the readers by controlling the definitions used.)
People in general are a lot smarter than the Powers That Be think they are.
By the way, I are a Plumber an does sort of OK wit Ekon.
No disrespect to plumbers… I read this site habitually and love the detailed wonkishness of it. For my part, I worked on a wall street trading desk before the SHTF so I get the ideas being discussed and generally agree with the “us vs. them” tone of Yves’ articles. What I dont get is how far is she willing to go? Is a capitalist structure in there somewhere? (Capitalist in a true sense, not the corrupted corpratocracy we have now). Or does Yves really believe that the best solution is to run $5T per year deficits, guarantee income, expand the safety net, etc, etc and hope for the best…. Im not trolling, I really dont know where she is saying we should go as a society and that makes me nervous about her (no disrespect). Im not comfortable supporting someone (to whatever degree reading a blog is support) whom I dont truly understand their motivations. Seems cultish.
I don’t see how you can charge someone who promotes critical thinking as the main objective of this blog as cultish, particularly given that I also turn down virtually all requests to speak at conferences, appear on TV (RT and Real News Network have both asked me to be a weekly guest) and do radio.
And contrary to your charges, I have articulated a general view of what needs to be done. No particular set of finance or economic policies will have their intended results if we do not address rampant corruption and looting first. See:
http://www.nakedcapitalism.com/2013/11/47719.html
Im your biggest fan… really. The few times I’ve commented, you have replied directly to me. Unbelievable that you have the time or energy. I think I’m just too slow for this discourse. I know Im not dumb, but this site makes me feel like Im missing the underlying understanding that everyone seems to agree upon. Everything is discussed in detail but at the margins. When I try to put it all together I see France. Nothing against France, but haven’t some of these ideas been taken to their conclusion in other places with predictable problems? I guess my biggest question is: Do you believe that society (government) should be in the business of ensuring minimum outcomes for the people? Not counting corruption, deceit, fraud or other crimes. For me, this is where I check out on these discussions. I want a society that has the drive for betterment. Vitality. Winners and Losers in a fair game. Balance. People should be free to lose. When I read these discussions I see good people trying to help, but blithely unaware of how “taking care” of everyone saps incentive overall. The things Im most proud of and that have contributed the most to both my success and my positive impact on the community were things I fought and worked for. Im glad there wasnt an easy option for me with guaranteed outcomes. Im glad it wasnt easy for me to become a “victim”. I could see myself as a young man falling into that trap. After all, it would have been easy.
P.S. the cult comment was not to be taken literally. Its the idea of being told something is wrong with me if I dont “get it”. Kinda like religion. These question are meant to either help me get it, or maybe help you get it. Thanks for the reply. I’ll keep trying.
The whole ideal of meritocracy seems to me badly deluded nonsense by people who do not realize they are living in a HUMAN (if inhumane) system. Yes, yes, the decisions about whom to hire and promote are made by perfectly rational economic beings, hardy har har. People will get hired and promoted based on things having nothing to do with their job skills and productivity: likability, attractiveness, assertiveness, whether the boss likes you, yes ALSO race and gender, but at least this last is ILLEGAL if hard to enforce. All the rest is perfectly 100% legal.
There’s been a lot of talk about “meritocracy” in relation to silicon valley etc. recently. That they don’t have equal opportunities based on gender and race. Yea but is it really worse than the rest of America especially with regards to race? You do realize the society you actually live in right?
I think tech partly got the “meritocracy” reputation because for awhile they weren’t as caught up in credentialism and formal degrees and credentials as everything else is. Which can allow some people to have opportunities to use their skills, talents and brains that they would never have in a strictly credentialed system with absolute credentialed gatekeeping (probably why it pisses the credentialists off the very most and is used as a punching bag, never mind that the rest of society is also racist etc.)
Also it probably gets some reputation for meritocracy because it places less emphasis on social skills which are required for success in the rest of society. People to whom social talents come easy will be like fish who don’t notice the water they swim in. But allowing some people in who would otherwise be discarded isn’t actually achieving a platonic ideal of meritocracy, it’s just allowing a different subset in than the rest. Everyone knows there are subsets in this society that noone allows in (those growing up in generations of poverty, the mentally ill, etc.). And the rest of us modify our nature as best we can to find some niche where we are at least able to support ourselves.
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“the rest of us modify our nature as best we can to find some niche where we are at least able to support ourselves.” What a perfect expression of bourgeois alienation! This neoliberal, tyrannical “market economy” discards some to suffer horribly in a material sense, while forcing most everybody else to suffer the horrible psychological consequences of distorting, or even completely denying their true natures every day!
This probably pre-dates the “Noble Lie” in “Plato’s Republic”…” the earth, as being their mother…”
http://en.wikipedia.org/wiki/Noble_lie
Desmond Lee has a very interesting take on translating/mistranslating an idea and its perception and consequent acceptance/rejection, i.e., words DO matter. The influence of words on how ‘we’ think about things and what ‘we’ subsequently decide to “believe”…”beliefs”(individual & collective) compel action or inaction, much more than reason. This is why the PR “industry” is so huge and “marketing” is more a euphemism for engineering “belief” rather than informing about “goods and services”.
Santa Claus, The Three Kings, The Easter Bunny etc., play a role in conditioning ‘us’ to be more receptive to “Noble Lies” as adults.
Great article, and some recent studies/articles which validate your statements:
http://www.bostonfed.org/inequality2014/papers/reeves-sawhill.pdf
https://www.russellsage.org/publications/whither-opportunity
http://milescorak.com/2012/05/17/a-little-secret-denmark-shares-with-canada-about-social-mobility-that-americans-and-brits-should-know/
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/10/18/poor-kids-who-do-everything-right-dont-do-better-than-rich-kids-who-do-everything-wrong
“But this situation puts bosses in a real bind. If you promote the person who is best in a department, his skills may fall woefully short of the requirements of his new role. But if you promote the person you deem best suited for that job, and not the top performer at his current role, you will demoralize his former peers, create resentment against him (undermining his authority and effectiveness), and raise questions about your judgment.”
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I would say the above is only a problem because of the hidden assumption of the hierarchy – the “boss” must always make more than the employees.
Does the administrative function of a hospital take more talent, intelligence, or effort than being a nurse…..or a doctor????
Even if does, it is probably more attributable to humans propensity to make mountains out of molehills…
Again, as I’ve asked many times…what decisions are Lloyd Blankfein actually making that can be proven to be responsible for ANY Goldman Sachs profit? And I dare say, if there is some particular decision he made that affects the bottom line, it is probably which government official to bribe -OOPS!!!!!- I meant to say schmooze…
Well, this is awkward….right after bring up schmoozing….I am going to say, the NC commenters are one bunch of erudite well read commenters with some astounding insights. And this is not naked brown nosing because it is so self evidently true….
In the old days of Wall Street, pay was not hierarchical. You’d often see “producers” make more than the partners on the executive committee. A famous case was Lawrence Hillibrand, head of Salomon’s bond arbitrage unit, who made IIRC $25 million in the mid-1980s (a ginormous amount of money then) v. something like $3 million for the CEO, John Gutfreund.
FASCINATING!
This topic is great and the discussion of it is enlightening. The reality is that the manipulation at the top continues down the strata and as a “worker-bee” the person above you is your commander unless you find a non-meritorious way around them. Needless to say the std corp mgmt system is designed to prevent worker-bees from going anywhere. Yet pick any given day or year and there are ample examples of total f*ck-ups of the C-suites abound, and oh so very few firings or investigations. Hell we discuss many of them here.
To the point – Why would any power center want risk being dislodged by some uncontrolled interloper? or to put its legacy at risk? Is that not one of the most desired affects of concentrating power? How is this not simply another facet of the shiny stone called elites? Of course merit based business decisions are not available, they do not exist as anyone who has worked for a family owned company knows. I trust Bill Black would explain in full detail and very persuasively how personal enrichment over shadows all else. As far as I know the corporate rat race aka office politics is not trivial and very effective.
*sarcasm on*
Clearly this topic is very important to our societal overseers as there an overabundance of studies to a f*cking granular level.
I’m willing to consider that the “worker bees” might actually need the someone at the top to make decisions even if they are wrong – Note that i am willing to consider that and I am not agreeing to that. The idea of “meritocracy” (I think) requires that someone first defines merit. If someone works very hard digging a ditch in the wrong place their hard work is a negative rather than a positive. It’s seeming more and more to me that the “rulers” are just forging ahead in the same direction they have been going for 30+ years (and more). What’s the likely outcome in 10-20-30-50-100 years? Where are we as humans likely to be? Who’s asking?
Meritocracy? In practice, this idea falls apart for 2 reasons at least. It’s impossible to separate people’s personal effort, motivation, sacrifice, and motivation from their blessings or gifts in life – like separate what they were given from what they “earned”. I object to the idea that motivated, creative people do more because they might be rewarded with money. My guess is that extra-smart, creative people do what they do because they are drawn to it and would do it for free – Meritocracy is first bullshit made up to support the idea that wealthy, ruling families (who are not necessarily the most moral, intelligent,or energetic) “deserve” what they have – even to the extent of being selected by “God”. Actually, it occurs to me that people only “earn” by working for “the man” who has the $ to pay. I suspect that “earning” (wealth) was not a concept before there was someone in charge. “Divine Right” was not about earning. Earning only applies to workers. Earning respect and status in your group by contributing was probably evolutionary. Ruling families probably started very early to start defending their right to more food, and to rule, and to be lazy and get others to do their bidding by convincing those under them that they were chosen by Divine Right (God). This probably makes evolutionary sense and worked. However,
I’m amazed that working people still accept this crap.
I’m considering that the most “merit” might be in doing the least – particularly for lawmakers. I think lawmakers have not done the least for economic business for some years and I think going back to undoing de-regulation of corporations might be a productive idea. What would the world look like if Glass-Stegal was not repealed? Maybe people could have happier and more productive lives by doing less. Less commuting, less consuming, less reproducing, and that would be mean giving up on the mantra/belief in the need for constant and forever GDP growth. I continue to see a Hamster Wheel with a a lot of people running no where for no reason.
The 1958 book that coined the term “Meritocracy” was a satire about “post industrial society.” The author, Michael Young, returned to his work in a later edition and wrote the following about the heart of the problem of “merit” as a means of integrating people into modern society. “If the rich and powerful were encouraged by the general culture to believe that they fully deserved all they had, how arrogant they could become, and if they were convinced it was all for the common good, how ruthless in pursuing their own advantage. Power corrupts, and therefore one of the secrets of a good society is that power should always be open the criticism….If [ordinary people] think themselves inferior, if they think they deserve on merit to have less worldly goods and less worldly power than a select minority, they can be damaged in their own self-esteem, and generally demoralized. Even if it could be demonstrated that ordinary people had less native ability than those selected for high position, that would not mean that they deserved to get less. Being a member of the “lucky sperm club” confers no moral right to advantage.”
Larry Summers (I use him as the poster-child of the “meritocracy”) becomes ever more incompetent as a an elite because the world over which he believes he enjoys control has unleashed powers in the human race that no “meritocracy” can control, much less govern in ways that are beneficial to humanity. The “meritocracy” has become the Ancien Regime, with High Finance at the Throne. It will be gone soon enough–but will the damage it inflicts on “ordinary people”–wars, economic policies that favor Wall St over Main St, consumerism without purpose or restraint, education unworthy of a planetary human race, and much more–demoralize them before they can wake from their three-generation slumber? As Paul Sweezy remarked, the Change will come from outside the imperial US–let’s just hope our slumber has ended when it does arrive, so we have a chance to resolve the current crisis in ways that benefit humanity, not Wall St.
A few points:
1) One other aspect to promoting meritocracy, especially in fields where results matter, is ensuring that companies with superior results actually survive and expand vs their competitors. Because the bottomline is that if meritocracy actually produces superior results, then assuming a level playing field, those organizations with superior results will thrive.
The Oakland A’s are actually a great example. Results in sports are pretty stark. And while for a while players were not appropriately valued, once Oakland showed the way, they had better results, and plenty of baseball clubs copied their models, to the point that there is very little “inefficiency” in the sabermetric model that clubs can now exploit. That this took many years is, IMHO, not as important as the fact that the revolution occured.
In contrast, in the business world, while everyone pays lip service to “free markets” the truth is no company wants to actually compete on a level playing field. It’s far more profitable to pay a politician to structure the field in your favor, then sit back and collect rents. Take Wall St: their poor results should have bankrupted them, and allow new companies to provide needed financial services in a more effective, efficient manner. But their extensive capture of government means they don’t live and die by their merits. Similarly, companies that have poor hiring practices, promotion policies, and weak investment in their employees’ potential, should eventually be replaced by better companies. Unless the bad companies happen to be entrenched incumbents with plenty of political muscle to keep pesky upstarts out of the game (US auto companies in the 70s, telecom companies now, etc.)
2) IMHO, the most important tax to promote meritocracy isn’t the income tax, it’s the inheritance tax. The inheritance tax was explicitly designed to prevent the formation of dynastic aristocracies, just like previous examples like the Ottoman Empire and Greece that previous commentators mentioned. The attack on the inheritance / estate tax (beginning with re-labelling it the death tax) is far more pernicious than the gradual lowering of income taxes.
Um…
Tell me again why it is assumed that meritocracy (meaning status and money being given to the most able – although able at what is left open) is a good thing.
It is well known that height and good looks are correlated with hierachical position and income (part – but only part of that is due to both being correlated with coming from a richer family). Are height and good looks something that are deserving of reward?
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2006/10/against_equalit.html
Never thought I’d find myself quoting scripture, but Ecclesiastes 9:11.
Great post. One huge problem is that the middle class is as invested, or more, in the notion of meritocracy than TPTB, which then becomes a huge stumbling block to any efforts to build solidarity among the non-PTB.
Ever notice how every “merit pay” system only ends up rewarding a handful of workers, and usually with bonuses too small to be really meaningful?
The dirty secret of such programs is that they don’t address, or hide, the C-level pay that benefits from squeezing the proles.
To be told that your employees just didn’t work hard enough to earn bonuses, and then learn that the CEO got a gigantic deferred comp deposit off of a ‘moved the goalposts’ spin is total BS. No wonder employee loyalty is so low.
The merit pay program is often paired with the dreaded ‘decision hierarchy’ where Owners come first, and employees come last. That’s another insult and invitation to bolt as soon as possible.
Some industries, notably tech, have another insidious HR bug, er, feature – H1B visa recipients that serve to eliminate any employee upside, so you end up with drudge work and insecurity.
How soon will it come crashing down?
Squatters Technology: Seeds Among Thorns
The US Constitution promises to respect the pursuit of life, liberty and happiness, by providing a bait and swap Bill of Rights, as a moving target defined by the State, arbitrary bundles of empire citizenship rights to the extent you pursue property encapsulation and exclusion, to feed the mortgage ponzi.
That’s what the Ohio Co of Cutthroat Associates built on the ground, while Hamilton and Jefferson struck the latest new deal, penned by Madison. The critters, including Benjamin Franklin, were already making designs to appropriate and sell natural resources all the way to the Pacific, from London, to pay empire debt in Europe, before the Boston Tea Party and Indian revolts.
Peer pressure has always been about controlling the means of production to the end of extortion, new world always the same as the old, mortgage queens always in need of a scapegoat. America was just another passive aggressive science project in human farming, where ‘every man trys to ruen his neighbor’ in ‘a swill bucket for speculators.’
George Washington squatted on 50,000 acres across 6 states, and otherwise was a lousy general with a good engineer, who was also a speculator, serving as a middleman for a King with mouths to feed and nothing but promises in the Bank. Greed just got away from them, because natural resources were so abundant in North America, and pretty soon ‘everyone’ wanted to be King, of his own property, to maximize rent, trading one tyrant for many.
Hamilton employed the process to print money, and Jefferson’s habits merely served to neutralize the opposition. Greed works, to collect and consume the participants, from depravity and insecurity. The empire world is always going to hell in a hand basket, but that doesn’t mean that you have to follow.
If you free-feed critters into domestication, they get fat and stop having children as natural resources decline. The easiest way to recognize an event horizon is the possessions it covets. Run a dc circuit in a closed container swapping O2 out and CO2 in under heat. Smartphones are ironic on many different levels.
Squatters warring with squatters, over artificial scarcity, is the ever-present noise of empire gravity locking the majority into the past. Gearing humanity to arbitrary gravity produces fascism, a self-regulating, possession-centric democracy, fitted into shrinking boxes, increasingly isolated from nature. Congratulations, they did it to themselves again.
“When we have land to labor then, let us never wish to see our citizens occupied at a workbench, or twirling a distaff.”
Debasing a currency for profit, with demographic arbitrage, is the well-worn path of passive-aggressive history. California’s gold rush became the Internet rush, leverage upon leverage, choking itself, as an example followed by the rest of empire, chasing its own tail, same as always.
Isms are reactions to isms, netting roughly 180 degrees dead wrong, at some speed, and the status quo buffer of no change is their best possible outcome. No matter which ism you choose, it will be buffered, to grow the buffer. Contract civil law marriage is about doing as little as possible, for as long as possible, at the greatest possible short-term profit.
The squatters squat arbitrarily, upon the assumption of scientific certainty, an oxymoron, and the result, a politically manufactured majority, wakes up far too late, with money yoked to real estate inflation. The critters can’t pass go because the meter-second of that pendulum is relative, to gravity in the return line.
Public education destroys the currency for the sake of maintaining the mythology that wealth is a function of controlling and redistributing natural resources, across artificial borders set up as toll booths, exporting natural resources out of the community and stupidity back, with conservation easements, eliminating natural employment. If you confront its superstition, it can only lock up, attempting in vain to confirm itself, until you unlock it.
If you want to allow juveniles in a Bay Area bar to zone you into extortion, that’s your business, but labor has better things to do than entertain a compromise among squatters, in a get-them-before-they-get-you world of artificial scarcity, bred by public education, security in a shopping mall survey.
The empire gears its world to favor stupidity, by exploiting labor for the purpose, and can’t find labor when it needs it, surprise. Labor doesn’t work for Queen and Country, to throw its children into the vacuum of stupidity without skills.
Squatter technology, money and war, what passes for public education, are juvenile derivatives of depravity, supply-side demographic arbitrage. Building technology on the fly to create economic mobility requires talent, which is ruled out by empire, in its Squatters Ponzi.
Old men with plenty of resources denying young men jobs, to curry favor with the Queen, and young men wasting their time revolting, is pretty D stupid, but that’s what is holding up the sh-show, which is neither here nor there to labor. Spending more than 25 hrs/wk playing monopoly with juveniles makes no economic sense. It’s not a negotiation.
Gravity has its uses, but not at any price. Insurance hedging simply hides cost, dead inventory, until it can’t. The central bankers have no exit, unless you give them one.