The Meritocracy Trap
Page 20
Moreover, graduate and professional school is once again expensive. Necessary and unavoidable direct costs—tuition and fees—at elite professional schools are quite as high as at elite colleges, and in many cases even higher: Yale Law School’s annual tuition is about $60,000, and Harvard Business School charges over $70,000. These prices cover tuition only, moreover, not including room and board. Once those expenses are added in, Yale Law estimates that a single student should expect to pay more than $80,000 over just the nine-month school year, and Harvard Business School estimates the total nine-month cost at more than $105,000. (Students report that full social participation adds $20,000 to the cost of the MBA and may be forgone only at the risk of being excluded from the intellectual and networking benefits of student life.) The indirect opportunity costs of a professional degree, measured by the income forgone during the additional years in school, equal or even exceed the direct costs.
These effects, no doubt combined with unidentified others, again produce an almost inconceivable socioeconomic imbalance in the student bodies of elite graduate and professional schools. Systematic and general data remain scarce: the skew to wealth is too extreme to be picked up by public data sets, which typically combine the broad elite into a single income category and therefore frustrate efforts to draw distinctions within the top few percent of the economic distribution; and universities themselves do not advertise a skew that they properly regard as embarrassing. But unofficial sources sustain increasingly confident judgments about elite professional students’ family wealth. Harvard Business School students, discussing the social participation fees mentioned earlier, characterized those costs as “only $20,000,” which gives a pretty good sense of their background wealth. And a recent systematic study of family background undertaken by Yale Law students confirms a massive skew toward wealth: more Yale Law students grew up in households in the top 1 percent of the income distribution than in the entire bottom half (roughly 12 percent to roughly 9 percent); the median Yale Law student grew up in a family whose household income was roughly $150,000 annually (the top fifth of the overall income distribution); and less than 3 percent of Yale Law students grew up in or near poverty.
It is hard to conceive of a more socioeconomically elite student body. And although precise microdata for other elite graduate and professional schools are not public, there is no reason to think that Harvard Business School and Yale Law School are outliers. To the contrary, a broad survey of law schools reveals that nearly two-thirds of students at top-tier law schools have at least one professional parent (who holds a post-BA degree) and more than a third have two professional parents.
Workplace training once carried the democratic impulses that early meritocrats brought to education into adulthood, allowing workers to advance through a firm’s hierarchy regardless of their background. Meritocracy’s subsequent history, however, has betrayed these impulses, and today meritocracy displaces workplace training in favor of university-based education. Elite graduate and professional schools now both extend the massive excess investments in rich students’ human capital deep into adult life and concentrate these investments on an almost unimaginably exclusive socioeconomic elite—at once increasing and narrowing the meritocratic inheritance. They draw the concentration of training and education in the United States today to a spiky-fine point.
VALUING THE ELITE’S INHERITANCE
Meritocrats may be made rather than born, but they are not self-made.
Elite and ordinary educations differ in almost every imaginable way: concerning the personnel, settings, styles, purposes, and programs of study through which they proceed. The differences cumulate to shepherd the elaborately educated children of rich parents into a distinctive way of life—one conspicuously consonant with the way of life adopted by adults in the superordinate working class. No simple characterization can fully capture this form of life’s distinguishing marks, and no single scale can measure the distance that separates elite education from its ordinary counterpart. The elite education that enfolds rich children is in this respect again no different from the superordinate work that dominates the lives of rich adults.
The connection between elite education and superordinate labor suggests, however, that a summary measure of the gap between the educations received by the rich and the rest can capture the essence of educational inequality—much as the top 1 percent’s income share clarifies economic inequality among adults. The association between elite education and top labor incomes, moreover, provides a guide to building the statistic. Labor income represents a return on a worker’s human capital, and education—alongside all its other faces—builds and increases a student’s human capital.
To construct a summary measure of the exceptional educations received by children of rich parents, therefore, strip away all the cultural context and institutional detail that surrounds elite education and ignore the direct, personal, and in-kind investments that elite parents make in raising and training their children. Instead, treat education simply as an investment in human capital, susceptible of measurement by dollar sums. Then ask how much more is invested in educating a typical rich child than is invested in educating a typical middle-class child—how much more is invested in a typical child from a one-percenter household in Palo Alto than in a typical child from a middle-class household in St. Clair Shores. The detailed story just rehearsed supports rough (but conservative) estimates of the critical dollar sums: $10,000–$15,000 per year in preschool; $20,000–$25,000 per year in elementary school; $50,000–$60,000 per year in middle and high school; and $90,000 per year in college and professional school.
Finally, to resolve these investments, made yearly over the course of an elite childhood, into a single sum, place the present-day elite’s investments in human capital into historical perspective. The old leisure class derived its income and status principally from returns to accumulated physical and financial capital. Elite parents, embedded in the old social and economic order, naturally devoted far fewer resources to educating their children (both absolutely and relative to their middle-class counterparts). Instead, the old elite promoted its children’s income and status, and ensured the dynastic transmission of wealth and privilege, through gifts of physical and financial capital—of land and factories, stocks and bonds. Typically, these gifts came as testamentary bequests, given by dying parents to children as heirs. The old mode of dynastic transmission of wealth reflected the dominant form of the wealth that it transmitted.
The meritocratic elite, by contrast, is constituted not by leisure and capital income but instead through superordinate labor. Elite parents today, embedded in the new order, naturally provide their children with the social and economic bases for membership in the superordinate working class. Investments in human capital, made while parents are still alive, have replaced bequests of physical and financial capital as the dominant means for conveying elite status down through the generations. This makes it natural to sum up these investments by calculating the size of the traditional bequest that they displace.
To do this, imagine that the difference between the resources devoted to training a child from a typical one-percenter household and the resources devoted to training a typical middle-class child were taken each year and invested in a trust fund, to be given to the rich child as a bequest on the death of his or her parents. Then calculate the size of the bequest. The exact results of this exercise depend on any number of assumptions, and so the outcome should not be accorded inapt precision. Nevertheless, a reasonable estimate (robust in the face of variations in the background assumptions) can be constructed, and the results of the exercise are truly astonishing: the excess investments in human capital made in a typical rich household—over and above the educational investments made not just in poor but also in middle-class households—today are equivalent to a traditional inheritance in the neighborhood of $10 million per child.*
Ten million dollars per child.
The elite’s enormous investment in its children’s education (enormous both absolutely and relative to the educational expenditures of the middle class) represents a new and distinctively meritocratic technology of dynastic succession, truly a “revolution in family wealth transmission.” Rich parents and rich children both gravitate naturally toward human capital as the preferred means for passing income and status down through the generations. This is why total education expenditure today grows more rapidly with rising income than does expenditure on any other major category of consumption, and why inequality in expenditures on education has in recent decades increased more rapidly even than income inequality. Indeed, meritocracy’s imaginative hold over today’s elite is so powerful that even the super-rich—who own enough physical and financial capital to secure dynastic succession through traditional bequests—nevertheless commonly give their children a meritocratic inheritance, often (as in Mark Zuckerberg’s case) as their principal or exclusive bequest.
The economic and social transformation from a society led by a hereditary leisured elite to a society led by the working rich rationalizes these practices. The meritocratic inheritance—the immense excess investments that rich parents make in their children’s human capital, over and above what middle-class children receive—dominates dynastic succession in a meritocratic world. Elite education brokers the dynastic transfer. Elite labor income pays out the value of the meritocratic inheritance that education builds.
THE END OF OPPORTUNITY
Although meritocracy once opened up the elite to outsiders, the meritocratic inheritance now drives a wedge between meritocracy and opportunity.
As the family becomes a site of production rather than consumption, and children become accumulators of human capital, the differences between elite and middle-class upbringing become economic rather than merely cultural or aesthetic and, moreover, project themselves deep into adult life. These arrangements make meritocracy an engine of dynastic privilege, excluding poor and middle-class children from the bases of future income and status. Despite the motives that led to its adoption, meritocracy no longer promotes equality of social and economic opportunity, as it was intended and expected to do. To the contrary, the social and economic inequalities that now burden America have distinctively meritocratic roots.
Meritocracy’s early career fulfilled the hopes that led Brewster and other midcentury reformers to embrace it. The aristocratic elite that meritocracy was designed to unseat lacked both the motive and the capacity to train its children to thrive in a competitive world. But it was inevitable that mature meritocracy should now undermine those hopes (and only meritocracy’s enduring charisma makes it surprising). The meritocrats who make up the new elite, having achieved their own status by winning competitions at their own intensive schools and superordinate jobs, possess an unprecedented taste and aptitude for training their children.
Because training and education work, rich children systematically outperform the rest—again not just the poor, but also the middle class—at each stage of their education. At every stage of childhood, extravagant investments in the human capital of rich children produce exceptional performances by these children, which then interact with meritocratic selection criteria at the next stage, in order to deepen and extend excess investments and exceptional achievements going forward, right through childhood and youth and into adulthood. The result of this mechanism is that by the end of the process, the new generation of superordinate workers is overwhelmingly composed of children from the present generation. And at every stage, elite parents secure these advantages for their children principally by deploying, rather than circumventing, meritocracy’s standards and methods. Today’s dynasties are built on the meritocratic inheritance.
To be sure, academically qualified students from poor and even middle-class families face social and financial obstacles to graduating from college—and especially with elite degrees—that students from rich families do not. As a result, high school graduates from middle-class and poor backgrounds sometimes do not pursue or complete the college educations that their earlier academic achievements qualify them for. But this undermatching, although real, is too small to account for the skew toward wealth among college students—especially at the most elite schools, which contribute the most to the human capital of the next generation of superordinate workers.
The unequal educations leading up to the SAT mean that there are simply not enough really high-achieving high school graduates from outside the economic elite to make much of an impact at the most selective colleges; and there are too many from within the elite for the student bodies at these colleges to skew any way except toward wealth. Even the most capable and ambitious working- and middle-class students—cobbling together an education out of the generous but ad hoc attentions of a few exceptionally devoted teachers, supplemented by their own energy and ingenuity (as when one student from South Los Angeles taught himself “about the world by watching ‘Jeopardy’”)—cannot reliably compete with the thousands of hours and millions of dollars invested in rich children. Indeed, even as the academic achievement of low-income high school graduates has increased in recent decades, undermatching has declined. Today even perfect matching would not materially increase the share of students at elite colleges who hail from low-income households.
The composition of the rising elite confirms this conclusion and demonstrates that meritocratic inequality draws wealth and achievement together, so that the richest and the highest-performing students are now overwhelmingly one and the same. Elite student bodies skew not just to wealth but also to academic achievement. Indeed, the best universities enroll the vast majority of the most capable students. Roughly eighty thousand students score above 700 on the SAT’s Critical Reading test in a typical year. Just the top twenty colleges in the U.S. News & World Report rankings enroll fully a quarter of these. And the top five law schools enroll roughly two-thirds of applicants with LSAT scores in the 99th percentile.
The old aristocrats were vulnerable to meritocratic competition because they bred underachievers, but the new meritocrats raise overachievers and therefore dominate meritocratic competition. The principal source of the skew toward wealth among college students, and especially among students at the most competitive colleges, is academic rather than narrowly financial or even cultural. The skew toward wealth does not reflect a breakdown of meritocracy so much as meritocracy’s triumph. Towering educational inequality reveals the inner logic of meritocratic inequality in its dark action.
Finally, the meritocratic approach to dynastic succession confers one more advantage on the elite, which distinguishes the meritocratic inheritance from its aristocratic predecessor. Whereas inherited physical and financial wealth famously breeds temptations toward profligacy and therefore its own dissolution—hence the early-twentieth-century saying that a family might go from shirtsleeves to shirtsleeves in three generations—human capital resists being wasted by those who are given it.
The studious self-discipline that a young person must develop in order to participate in building up her human capital inspires an adult inclination not to squander it. Law, moreover, backs up this inclination: an owner cannot extract rents from her human capital without mixing it with her own contemporaneous labor; and the legal regime governing work—which permits wage labor but forbids slavery�
�prevents owners from selling their human capital apart from and in advance of mixing it with their labor. Indeed, because children do not inherit their parents’ debts, human capital is proof against the profligacy of the prior generation also. Finally, because most education is paid for while students are still children, transfers of human capital are effectively exempted from gift and inheritance taxes.
Human capital, in sharp contrast to physical and financial capital, is therefore structured—psychologically, economically, and even legally—to resist being dissipated by its owners. Finally, the structures that have grown up around the superordinate working class—the social practices and institutions of elite education described earlier—support not just the husbanding of human capital by children who have received it from their parents but also the renewed transmission of human capital to their own children in the next generation down the dynastic line.
In all these respects, the meritocratic approach to dynasty building mimics the truly hereditary birthright aristocracy that for centuries dominated elite life. Education assumes the role in meritocracy that breeding played in the aristocratic regime, and superordinate labor takes on the role once played by hereditary landedness. (The midcentury regime, in which formally equal persons were differentiated not by breeding but by contingent inheritances of physical and financial capital, is revealed by this light as an interregnum rather than a stepping-stone on the path of progress.)
The increasing monopoly that elite families exercise over pathways to income and status, and the increasing exclusion of not just poor but also middle-class children from elite training and thus also work, realize rather than retreat from meritocratic values: the dynastic character of privilege does not reflect the corruption so much as the consummation of the meritocratic regime. (Even the rare exceptions to this monopoly, which occur when unusually talented or lucky children without rich parents break into the educated elite, serve principally to legitimate meritocracy, by distinguishing this regime from one based immediately on breeding, and perhaps also by leavening the meritocratic loaf with some energy from the outside.) Indeed, meritocracy appears poised to produce a system of intergenerational privilege more enduring than the midcentury mechanisms involving inheritance of physical and financial capital that meritocracy defeated and then replaced, a dynastic structure that closely resembles an earlier hereditary aristocracy in form and perhaps longevity.