The Meritocracy Trap

by Daniel Markovits

  Meritocratic countries therefore also concentrate both education and commerce in a narrow elite, which closes ranks as ownership castes always do. The feedback loops between exclusive education and skill-biased innovation entrench and expand the elite’s privilege and shrink and marginalize the middle class. The pathologies that familiarly plague natural-resource-rich societies—social and economic stratification, undemocratic politics, corruption, and low growth—all inexorably follow.

  Meritocratic inequality casts a human resource curse.

  NINE

  THE MYTH OF MERIT

  The word meritocracy is barely older than the practices that it describes. It was coined by the British sociologist Michael Young in his 1958 satire The Rise of the Meritocracy.

  Young opposed meritocracy in scathing terms. The Rise of the Meritocracy is a cry of warning rather than a song of praise. A current of foreboding and even violence runs through the narrative. And Young himself regarded the book as a dystopian fantasy, along the lines of George Orwell’s 1984 or, more immediately, Aldous Huxley’s Brave New World.

  Young imagined that meritocracy would use increasingly accurate and increasingly early tests for native intelligence ruthlessly to sort people into schools, universities, and eventually jobs. The sorting would produce a massive, stable, and complete social stratification by ability.

  In this way, Young proposed, the most perfect formal equality of treatment—in which people of like native talent received like education, income, and status—would produce enormous substantive inequalities in the distribution of social and economic advantage. Ultimately, he warned, the inequalities would become too great for even meritocracy’s ideological power to bear, producing revolutionary and often senseless violence.

  Young was right to worry, it has turned out, although he worried about the wrong things. Believing in nature rather than nurture, he thought that even meritocrats would be born rather than made. This caused his fantasy to mistake the social technology that meritocratic inequality would employ. In fact, modern meritocracy operates not through more and more accurate testing for natural talent, deployed earlier and earlier, but rather through more and more intensive cultivation of nurtured talent, extending longer and longer.

  Moreover, Young underestimated how pervasively meritocracy would transform society. He imagined that meritocracy might change the facts about how society allocates economic and social advantage without also changing the values—the moral and political ideals—by which the allocation of advantage is judged. And he did not see that meritocracy would bend the arc of innovation to favor the skills that it produced, so that meritocratic education and meritocratic work would come to rationalize and even require each other. Young underestimated both the powerful charisma that meritocracy would exert and the long shadow that meritocratic inequality would cast over economic, social, and ethical life.

  Young’s satire missed its mark by a mile. The term he introduced became widely embraced rather than reviled. And Young himself lamented this turn of events for all his life, even into the new millennium.

  NEW NORMS TO SUIT NEW FACTS

  Epochal transformations cannot be criticized by deploying the norms of the old regime. Meritocracy has remade society so profoundly—launching interpenetrating upheavals at home and at work, in practical life and in the imagination—that the ideals concerning equality that Young inherited could not take the measure of the world that he imagined.

  Present-day ideals concerning justice, entitlement, and even merit are all meritocracy’s offspring and carry its genes inside them. Meritocracy has built a world that makes itself—in all its facets, including meritocratic inequality—seem practically and even morally necessary. This is the tyranny of no alternatives that makes the meritocracy trap so difficult to escape.

  Coming to terms with the new facts that meritocracy has created—including the peculiar patterns of meritocratic inequality—demands new norms, designed and structured with the meritocratic world in mind. It takes a new imaginative frame—one that acknowledges meritocracy’s charisma—to clarify and to vindicate the complaints of meritocracy’s discontents, and eventually to escape the meritocracy trap.

  Young’s efforts help to build the new frame, even if his express arguments against meritocracy cannot convincingly fill it. He was forced to invent the word meritocracy because the natural and familiar word for rule by the “most virtuous”—aristocracy—was already taken and had (as a result of centuries of political activism and ideological work) acquired a pejorative sense. Young therefore replaced the Greek root for “most virtuous” with the Latin root for “earn,” and coined his term.

  Both Young’s concept and its construction followed historical precedents. George Bernard Shaw (whom Young much admired) had written about what he variously called “aristocratic democracy” or “democratic aristocracy,” by which he meant that good government required hierarchy, but one based on capacity, not breeding. Slightly earlier, the Frenchman Émile Boutmy created the Grande École Sciences Po (attended by six of the past seven French presidents) specifically to shore up the elite against the crumbling of aristocratic prerogatives—so that, he said, the “upper classes [could] preserve their political hegemony . . . by invoking the rights of the most capable.” And Thomas Jefferson (who would have been farther than Shaw from Young’s Fabian English mind and less coldly cynical than Boutmy) had even earlier embraced a “natural aristocracy” whose grounds were not “wealth and birth” but rather “virtue and talent.” Young’s wordplay was less revolutionary and more an effort to name an existing mood—which sought to replace an aristocratic hierarchy that modern democratic capitalism had rendered debased and even ridiculous with another hierarchy that it might embrace.

  Although the common imagination casts meritocracy and aristocracy as opposites, these origins of the word meritocracy reveal (as Young himself believed) that the two social orders are in fact close cousins. This background insight provides more powerful ammunition against meritocracy than Young’s express reasoning. The analogy to aristocracy weaves all the threads of the argument against meritocratic inequality together into a powerful unified critique of the meritocratic worldview.

  Meritocracy, like aristocracy, comprehensively isolates an elite caste from the rest of society and enables this caste to pass its advantage down through the generations. Meritocratic education privileges rich students, glossy jobs privilege educated workers, and the feedback loops between training and work ensure that the two forms of privilege support each other and grow together. This dynastic quality—which operates both at the level of the individual family and at the level of the elite caste—is the key to understanding where meritocracy has gone wrong.

  Aristocratic dynasties, based on hereditary landedness, were viable when land was the most valuable economic asset and (in consequence) wealth naturally endured across generations. But as Roscoe Pound (the Nebraska-born dean of Harvard Law School) remarked in 1922, “Wealth, in a commercial age, is made up largely of promises,” including especially the promises contained in labor contracts. And the human capital that underwrites the value of labor must be arduously rebuilt in each new generation.

  The legal regimes that had sustained aristocratic dynasties in the ancien régime—including primogeniture (which kept estates concentrated in single owners) and the fee tail (which kept estates within families)—were inadequate to these new conditions. Additional factors—inheritance taxes and wars (which confiscate and destroy physical wealth)—piled atop the structural shift and helped to speed aristocracy’s demise. Land lost its value, aristocratic families lacked the skill and flexibility to adjust to new conditions, and bourgeois states eroded whatever vestiges of aristocratic legacies remained.

  Now, meritocracy renovates the dynastic impulse for this new world. Meritocratic education passes human capital down through the generations, and elite training additionally grooms each new generatio
n to resist indolence and decadence and instead to husband its caste. Elite schools and firms police caste to establish, in effect, a meritocratic version of Debrett’s Peerage and Baronetage. This time also, law backstops dynastic succession. Legal rules insulate children from their parents’ debts, to prevent the current generation from mortgaging the human capital of the next, in a meritocratic version of the fee tail that once kept aristocratic lands in the family. And inheritance and gift taxes pass over the massive wealth transfers that parents make in favor of minor children, by investing in their schooling to build their human capital. The meritocratic inheritance is the contemporary equivalent of aristocratic breeding.

  The meritocratic reconstruction of dynastic privilege may be less secure than the aristocratic one was (although history, because its gaze selects for longevity, gives aristocracy an appearance of stability that it did not possess in lived experience). It is certainly costlier to elites. Each new generation of meritocrats must recapture its privilege anew, through genuine hard work. And the meritocrats’ incomes depend on exploiting not others but rather themselves.

  But although this explains why elites might join the ranks of meritocracy’s discontents, it does not render meritocratic inequality any less hierarchical or meritocrats any less inclined toward dynasty. The shift from aristocratic to meritocratic dynasties does not reflect a rejection of social hierarchy so much as an adaptation or friendly amendment, made in order to preserve hierarchy in the face of economic and social changes that rendered the aristocratic version unsustainable.

  DEBUNKING MERIT

  If one had asked an aristocrat of the ancien régime why he was entitled to a disproportionate share of wealth, status, and power, he would have answered (following Aristotle) that he possessed the greatest virtue. He would, moreover, have offered this answer in good faith—and possibly even credibly, given the broader circumstances of his age.

  The aristocrat had the right relationship to wealth and especially to land. An agrarian economy, in which immobile capital sustained no real growth, debased commerce (which was nearly zero-sum). At the same time, this economic regime required that land be administered for the long term rather than exploited for present gain. The dynastic place of the land (including through the legal structures associated with entailment) ensured that each generation of aristocrats would take the long view, husbanding its land in “the interests of posterity, as embodied in their own family.”

  The aristocrat also, as this formulation suggests, aptly balanced loyalty to family and loyalty to the broader nation (at least in theory). A society that was scaling up—from local, almost clan-based social organization to the nation-state and even the multinational empire—needed a bridging institution that might expand formerly local varieties of social solidarity to operate across larger and larger social and physical distances. The aristocratic conflation of family and nation provided exactly the required bridge. (The bridge casts its shadow even into the present, for example in the use of the word domestic to refer to both household and national affairs).

  Finally, aristocratic manners reliably navigated the transition from personal to impersonal governance. As society scaled up, administration necessarily grew detached from the personal charisma of individual leaders, slowly acquiring the impersonal authority of bureaucratic rationality. Courtly manners provided an intermediate administrative style to broker the transition—detached from individuals but without requiring the elaborate institutions of training and professional certification that would eventually confer bureaucratic authority but did not yet exist.

  Aristocracy’s self-conception as rule by the virtuous seems incredible today, of course. Partly, a rising commitment to equality of opportunity condemned the unfairness of the birthright lottery that inevitably ensues when heredity determines caste. Much more important, the bourgeois revolutions and the rise of a commercial economy reframed the aristocratic virtues as at best absurd and at worst debased. Stubborn conservatism about land impedes growth in an economy based on exchange, innovation, and skilled labor. Obsession with pedigree becomes self-serving in a society that frames membership in terms of a nation or even an ideal. And courtliness and etiquette appear amateurish and even incompetent where intense training and immense skill underwrite effortful and expert administration.

  Aristocrats came to be mocked and disparaged, for precisely the character traits that once underwrote their authority. By the start of the seventeenth century, Cervantes could cast chivalry as ridiculous, and toward the century’s end, La Rochefoucauld would skewer aristocratic vanity and greed. The aristocracy fared much worse in the revolutions of the eighteenth and nineteenth centuries, of course. And in the twentieth, an increasingly confident disdain for aristocracy came to pervade social and economic life, and the aristocratic virtues themselves were reframed as phony and corrupt. Corporate raiders sneeringly targeted firms run by the “third-generation Yale man.” Ivy League admissions officers became no longer content to admit the “happy bottom quarter” of old-money students from aristocratic prep schools. Brewster’s observation that even the privileged had come to prefer advancing on merit rather than breeding gave the Ivy League’s seal of approval to an already completed revolution.

  Meritocrats displaced aristocrats, and meritocracy’s charisma explains why the aristocratic conception of virtue seems incredible today. Intense training and bureaucratic rationality have usurped breeding and mannerliness, democratic accountability has usurped patrician solicitude, and, above all, human capital has usurped land. The meritocratic virtues have become so dominant that they appear, especially to the elite, to articulate a natural and even necessary conception of human excellence—as fixed as the conception that once dominated aristocratic life.

  But virtues almost always depend on context for validation. In some instances, a moment’s reflection makes this clear. The athletic skill of a baseball pitcher is like this: obviously an artifact of the game that frames it, unsuited to other games, and worthless if the frame changes too dramatically or disappears altogether. The aristocratic virtues depended on context less obviously but not in the end any less completely, and they similarly became worthless (or worse) when the social and economic frame changed.

  As the wheel makes another turn, the meritocratic virtues face a similar fate. Indeed, today’s meritocratic elite strikingly resemble the baseball pitcher. Certainly, the training and capacities that make superordinate workers immensely productive in the present world would not have much value in a society of hunter-gatherers, or, for that matter, in a society devoted to subsistence agriculture, or to craft production on the early modern model, or even to industrial production on the model that dominated rich nations between the invention of Watt’s steam engine and the middle of the twentieth century.

  Moreover, one need not look so far afield to see that the value of the meritocratic virtues depends on context not just generally but in fact on a very particular context. Both the educations that now create elite skills and the forms of production that make these skills so valuable on the contemporary labor market can exist only at the end of a long cycle of feedback loops in which elite training and the skill fetish reciprocally encourage each other. Elite skills can exist and can command elite incomes only by sitting atop massive antecedent economic inequality. The meritocratic virtues, that is, are artifacts of economic inequality in just the fashion in which the pitching virtues are artifacts of baseball.

  This insight fundamentally reframes meritocratic inequality, by changing the literal meaning of merit itself. Most immediately, it demolishes the leading argument of equality’s enemies: that meritocratic inequality, although unfortunate and perhaps even lamentable, must be tolerated on account of elite workers’ entitlements to be paid a wage commensurate to what they produce. It turns out that—even accepting that top incomes reflect merit rather than rent seeking or fraud—superordinate labor can be so productive only where massive inequality has dis
torted education to concentrate training and work to fetishize elite skills. But even immense productivity cannot justify an inequality that it in fact derives from and depends on. The proposed justification travels a circle, and so justifies nothing.

  Even if superordinate workers deserve their hard-won skills, they cannot possibly deserve the unequal contrivance that makes these skills so peculiarly economically valuable. And with this recognition, the most politically potent argument in favor of meritocratic inequality—the argument captured in Mankiw’s principle of just deserts—simply melts away.

  Moreover, and more profoundly, the recognition that the immense productivity that allows superordinate workers to command enormous incomes is itself an artifact of economic inequality casts doubt on the very idea of skill, or merit. The doubt may be articulated in two ways: by an abstract argument and through a parable.

  The commonplace conception of a particular worker’s product—her contribution to output—looks to the difference between total output with and without her labor, where everyone else works in exactly the same way regardless of her participation. This quantity represents the conventional measure of her merit. Markets fix wages according to this model of productivity, which allows superordinate workers to capture enormous incomes. The model explains why the inequality that these incomes produce is commonly considered meritocratic.

  But a better—both fairer and more accurate—accounting of a worker’s product asks a different question. This accounting looks to the difference between total output with and without her labor, but now allowing everyone else to reorganize production optimally in her absence. This alternative approach yields a smaller measure of the worker’s product (because of the offset for the gains achieved by others reorganized in her absence). The difference between the two measures becomes especially great when the worker’s presence changes patterns of production generally, including how everyone else works. And the alternative measure becomes especially compelling when the worker prevents others from reorganizing production optimally without her.