The Meritocracy Trap

by Daniel Markovits

  Wage subsidies are already gathering political support. Prominent political figures and businesspeople, including ones conventionally considered politically conservative, are warming to subsidies for middle-class wages. On the left, Senator Mark Warner has sponsored legislation to support middle-class jobs and wages, and the Center for American Progress’s recently released Marshall Plan for America includes a proposal to create 4.4 million public-sector jobs, at a cost of roughly $150 billion per year. On the right, the leadership guru Peter Georgescu and Home Depot billionaire Ken Langone are actively campaigning for businesses to invest in workers and in the forms of production that make a middle-class workforce profitable. Georgescu even expressly backs federal wage subsidies.

  Finally, the two pillars of this reform agenda arise directly out of the diagnosis of meritocratic inequality and fit closely together. They go to the heart of meritocratic inequality and, moreover, powerfully reinforce each other, to have a joint impact much greater than the sum of their parts. Together, they aim to commandeer the mechanisms that now drive meritocratic inequality forward and to shift these mechanisms into reverse.

  Open and inclusive education would create a broader and less extravagant elite. The greater openness would at once increase social mobility into the elite and restore the avenues of opportunity that traditionally bound middle-class and elite Americans together. And the increased supply of educated workers would immediately reduce labor incomes and work hours in elite jobs, running all the way up the income scale.

  At the same time, the payroll tax reform and wage subsidy would reverse the current tax preference for superordinate over middle-class labor and establish a clear preference for middle-class labor in its stead. A new demand would greet the surging supply of educated workers, especially in the broad middle of the skill distribution (where the current tax regime imposes the greatest tax burden).

  The indirect effects of the two reforms would be greater still. Both reforms would give interested innovators an incentive to bend the arc of innovation away from technologies that favor superordinate workers and toward those that favor middle-class workers. Innovation would therefore further reduce the returns to extravagant skills and increase the returns to solid skills. This would reduce the appeal of elaborate training, making education still more open and inclusive. And a virtuous cycle of self-reinforcing equality would replace the snowballing inequality that meritocracy has produced.

  Reforms to education and work, operating together and over time, can reestablish the middle class in its central role in economic and social life. The peculiar version of steady good that St. Clair Shores enjoyed at midcentury is of course lost to history. But the diagnosis of meritocratic inequality identifies a set of policies that put a twenty-first-century version of steady good—for all—back within reach.

  A NEW POLITICS OF DEMOCRATIC EQUALITY

  In 1968—the last time the world experienced widespread unrest and rebellion against the status quo—radical students at the London School of Economics printed a poster that showed a cigar-smoking capitalist and a student fighting for control of a car with dollar and pound symbols inscribed on its headlights and “Strike Laws, Rent Increases, Student Repression” written on its license plate. The slogan on the poster read “Same Bosses, Same Fight.”

  The poster’s slogan was a lie, or at best a fairy tale, only half believed even by its authors. The aristocratic regime that still prevailed in 1968 meant that rich students and poor workers did not have the same bosses and were decidedly not in the same fight. Rich students could still hope to join the leisure class, enjoying comfortable incomes as rentiers or at least organization men, while poor workers still suffered widespread deprivation at the hands of capital.

  The middle class, having learned to hold its own against capital and prospering in the postwar boom, did not share the elite students’ angst and was alternately bemused and put off. It might have been forgiven for suspecting that a part of the rich students’ rebellion expressed an instinctual recognition, rising but as yet unconscious and inarticulate, that the meritocratic revolution then gathering steam would expose them to unwanted pressures—that meritocracy might not end well for the elite.

  The poster’s greatest irony is that its slogan, false when issued, would through these still unseen forces eventually be made true. Along the way, meritocracy would change the politics of economic inequality in fundamental ways. The transformation opens up new possibilities for an updated—and now apt—version of the grand alliance that the poster championed.

  Today, meritocratic inequality benefits no one: neither the many whom meritocracy idles and thereby excludes from income and status, nor even the few whom meritocracy ensnares in a destructive tournament to exploit their human capital by yielding oppressively intense, pervasively alienated labor.

  An opening therefore exists for a new politics to hear and to answer the real needs that demagogues, charlatans, and other false prophets now exploit. By unmasking merit as a sham, the diagnosis of meritocratic inequality pierces the ideologies that lead the elite to cling to its privilege and the middle class to direct its resentments at innocent outsiders. It is one thing for a person to suppress his humanity in order to protect real advantages; it is another to do so in the service of an illusion.

  A clear-eyed view of meritocracy also shows that all meritocracy’s discontents, although they appear unrelated, in fact share a common source—an excessive concentration of human capital and industry in an ever-narrowing elite that condemns the rich to Stakhanovite overwork and the rest to imposed idleness. A more equal social and economic order would therefore make everyone—both the rich and the rest—better off.

  Moreover, democratic equality is the only cure for meritocracy’s discontents. Meritocrats who hope to have their cake and to eat it too—who hope to reclaim their lost leisure and authentic freedom without sacrificing their income and status—are simply deceived. They ignore the grinding logic of meritocratic production—at their dire peril. Where human capital underwrites income and industry constitutes honor, there is simply no way for a person to dominate or overshadow others, as superordinate workers now do, and still remain true to herself. It is impossible to get rich off of human capital except by exploiting yourself and impoverishing your inner life. Just as citizens must each look the other in the eye in order to achieve their own civic self-respect, so workers must share income and industry in order to be free to become themselves. Meritocracy allows no route to domination besides through the destruction of the authentic self.

  A more equal society benefits everyone. The elite can reclaim its freedom and leisure in exchange for a reduction of income and status that it can easily afford. Palo Alto, although it will be a little poorer, will get relief from burdens too intense to bear, and its still very rich residents will regain their liberty. At the same time, the middle class can get relief from enforced idleness, and renew its income and status, in exchange for letting go of resentments that anyway provide no satisfaction. St. Clair Shores will recover its wealth, restore its dignity, and regain its central place in the narrative of American life.

  The right metaphor for redistribution today is not Okun’s leaky bucket—a joint loss—but rather mutual gain. Where mature meritocracy produces universal discontent, democratic equality becomes a win-win deal—and a deal that requires cooperation between the rich and the rest, who can each escape the meritocracy trap only by working together.

  Both groups benefit if they take the trade; and this makes the political pitch newly friendly to progressives.

  Any victory will be long-fought and hard-won. It must be fought and won out of doors—by agitating and organizing—and not in the pages of a book. But a book can help to educate citizens to see what their true interests are and therefore what political movements they have reason to join. Meritocracy’s bright shine blinds people to the ideological traps in which it ensnares them—creating fals
e pride in the rich and false resentment in the rest, to obscure the harms that meritocratic inequality imposes on both groups. Reflection reveals the harms and, in this way, recommends equality to a broad spectrum of citizens, across the meritocratic divide. It also shows that the rich and the rest cannot escape the meritocracy trap except jointly—that although shallow advantage places them at odds, they can achieve their true interests only together.

  To update an old slogan: the workers of the world—now both middle-class and superordinate—should unite. They have nothing to lose but their chains, and a whole world to win.

  ACKNOWLEDGMENTS

  The Meritocracy Trap has been two decades in the writing, and I have accumulated innumerable debts of gratitude. It is impossible to list every one and difficult to repay any one. But that is no reason not to try.

  I became interested in economic inequality—including in the peculiar problems that arise when inequality is built on human capital—while studying philosophy in graduate school under Bernard Williams, Derek Parfit, Ronald Dworkin, and G. A. Cohen. All had powerful and distinctive views about distributive justice. Probably more important, they all taught how difficult it is to think clearly about deep matters and how to get ideas to speak directly to lived experience. A little later, after I’d published some initial arguments about inequality, an exchange with Elizabeth Anderson persuaded me that these efforts had failed effectively to engage real life. The search for a better approach set me on the path that has led to this book.

  That path itself has been anything but direct, and I have benefited from countless conversations with colleagues and friends, both at Yale and elsewhere, many of whom commented on early drafts. These include Muneer Ahmad, Anne Alstott, Ian Ayres, Monica Bell, Yochai Benkler, Phillip Bobbitt, Dani Botsman, Khiara Bridges, Steve Brill, Rick Brooks, John Buretta, Guido Calabresi, Jessica Cattelino, Bob Ellickson, Dan Esty, Crystal Feimster, Owen Fiss, James Forman, Robert Frank, Bryan Garsten, David Grewal, Oona Hathaway, Geneviève Helleringer, Robert Hockett, Michael Kades, Paul Kahn, Amy Kapczynski, Al Klevorick, Issa Kohler-Hausmann, Roy Kreitner, Doug Kysar, John Langbein, Marc Lipsitch, Zach Liscow, Yair Listokin, Ian Malcolm, Benjamin Markovits, Inga Markovits, Julia Markovits, Rebecca Markovits, Richard Markovits, Stefanie Markovits, Noah Messing, Sam Moyn, David Owens, Przemek Palka, Ben Polak, Robert Post, Asher Price, Claire Priest, Jed Purdy, Aziz Rana, Rob Reich, Judith Resnik, Susan Rose-Ackerman, Scott Shapiro, Dan Sharfstein, Peter Schuck, Vicki Schultz, Reva Siegel, Tim Snyder, Kevin Stack, Tom Tyler, Rory Van Loo, Sharon Volckhausen, Philippe Wells, Leif Wenar, Patrick Wolff, Noah Zatz, and Taisu Zhang. Amy Chua and Jed Rubenfeld gave especially extensive and intensive help, and the book would (quite literally) not exist but for them.

  In addition, I’ve presented the ideas in the book in many more formal settings, where questions improved both my presentation of the argument and often the argument itself. Venues that helped in this way include the American Constitution Society’s Progressive Legal Scholarship Seminar; the Branford Money, Power, and Politics Series; the Bank of Japan; Ewha Women’s University; the National University of Singapore Faculty of Law; the Interdisciplinary Center at Herzliya; the University of Tel Aviv Buchmann Faculty of Law; the Heidelberg Center for American Studies; the Universidad Pompeu Fabra; the Università di Bologna; the Centre for the Study of European Contract Law at the University of Amsterdam; the Humboldt-Universität zu Berlin; the Salon Polarkreis; the Berlin Inter-University Inter-disciplinary Colloquium on Markets; the Recht im Kontext Seminar; the Yale Club of Chile; the Universidad de Chile Faculty of Law; the Money Talks Symposium at Yale; the Harvard Program in the Study of Capitalism; the James E. Rogers College of Law at the University of Arizona; the University of Arizona Center for Law and Philosophy; the Yale College Income Tax Assistance Project; the International University College of Turin; the Yale University Institution for Social and Policy Studies and Washington Center for Equitable Growth Conference on Inequality, Politics, and Prosperity; the Yale Law School Faculty Workshop; the Yale Law School commencement; the University of Toronto School of Law; the University of Texas School of Law; the American Constitution Society Conference on Law and Inequality; the Yale Law School alumni weekend; the Georgetown University Law Center; the Cegla Center; UCLA School of Law; Columbia Law School; the University of Texas Inequality and Human Rights Conference; Dartmouth College; Cornell Law School; the Yale College reunion; the Seminario en Latinoamérica de Teoría Constitucional y Política; the Comenius Programme; the Fondazione Cariplo; the New York Institute for the Humanities; the NYU School of Law; Vanderbilt University Law School; the Conseil d’État; the Universidad de Buenos Aires Faculty of Law; the Federalist Society; the University of North Carolina School of Law; the Law and Political Economy Project; ETH Zurich and IAST Toulouse; the Humboldt-Universität Institut für Sozialwissenschaften; the Baldy Center at the University at Buffalo; the Northwestern University Pritzker School of Law; Brooklyn Law School; the Yale Law School First Generation Professionals; and the Italian Society of Law and Economics.

  The participants in several seminars devoted to the penultimate draft of the book gave invaluable comments and suggestions as I was finishing the main task of writing. These include Giacomo Corneo, Felix Koch, Bertram Lomfeld, Christoph Möllers, Frauke Peter, Friedbert Rueb, and Jürgen Schupp at the Freie Universität Berlin; Oriana Bandiera, Lucy Barnes, Thorsten Bell, Richard Blundell (who suggested the book’s title), Jeff King, Julian LeGrand, George Letsas, Philippa Malmgren, Claire Maxell, Avia Pasternak, Prince Saprai, and Paul Segal at University College London; Bruce Ackerman, David Brooks, Michael Graetz, Anthony Kronman, Rick Levin, Meira Levinson, Alec MacGillis, Jennifer Nedelsky, Alan Schwartz, John Witt, Portia Wu, and Gideon Yaffee at Yale Law School; and Emily Bazelon, Nicholas Dawidoff, Jacob Hacker, and Annie Murphy Paul at the New Haven reading group on inequality.

  The Yale Law Library and its unmatched staff—including in particular Julian Aiken and Michelle Hudson—provided astonishing research support. And an absolutely exceptional group of research assistants assembled, evaluated, and organized mountains of data and other facts. These include: Yusef Al-Jarani, Matthew Ampleman, Molly Anderson, Kossi Anyinefa, Jessica Baker, Aaron Bartels-Swindells, Sarah Jane Bever-Chritton, Taly Bialostocki, Samuel M. Brill, John C. Calhoun, Michael Coenen, Ignacio Cofone, Jane Cooper, Lindsey Counts, Marcu DeWitt, Alexandra Eynon, Rhea Fernandes, Eric Fish, Edward Fox, Miguel Francisco de Figueiredo, Rueven Garrett, William Gaybrick, Adrian Gonzalez, Nathan Goralnik, Rohit Goyal, Casey Graetz, April Hu, Leora Kelman, Jeremy Kessler, David Kim, Daniel Knudsen, Dylan Kolhoff, Craig Konnoth, Chelsea Lane-Miller, Arthur Lau, Jeff Lingwall, Daniel Listwa, Catherine Logue, Lucas Mac-Clure, Marianna Mao, Virginia McCalmont, Catherine McCarthy, Alex Mechanick, Marian Messing, Stratos Pahis, Jeremy Pilaar, Valida Prentice, Devin Race, Ravi Ramanathan, Conor Dwyer Reynolds, Eva Rigamonti, Rachel Rolnick, Claire Saint-Amour, Jackson Salovaara, Jonathan Sarnoff, George Shen, Erik Stegemiller, Emily Stolzenberg, Lilian Timmermann, Hong Tran, Jessica Vosburgh, Ting Wang, Megan Wright, Jeffery Zhang, Katherine Zhang, Carleen Zubrzycki. Two among this outstanding group especially stand out for their long and intense engagement with the book: Jeff Zhang at the beginning and middle of the work, and Catherine McCarthy at the end.

  Yale Law School, and Deans Anthony Kronman, Harold Koh, Robert Post, and Heather Gerken, made intensive writing, extending over many years, possible; the Wissenschaftskolleg zu Berlin gave support for one year; and the British Library provided an open and congenial place to write and think over many, many shorter periods. Patty Milardo skillfully organized and nurtured my professional life throughout.

  Tina Bennett, Tracy Fisher, Elizabeth Sheinkman, Fiona Baird, and Svetlana Katz have represented the book with grace and flair. Tina in particular took a speech and made it into a credible book proposal and then helped to take a rambling manuscript and make it into a book. I could not imagine a better agent.

  Ann
Godoff and Will Heyward at Penguin New York and Stuart Proffitt and Ben Sinyor at Penguin London edited the book with incredible care, skill, intelligence, and judgment. They spent many hours discussing the manuscript with me and many more reading and thinking about the argument. Their attentions remade my earlier efforts into something wholly new and dramatically better. Yuki Hirose vetted the manuscript with sympathetic care. And Casey Denis, Gail Brussel, Bruce Giffords, and the entire Penguin production crew made a physical book that is beautiful and, in its layout and visual language, enhances the book’s ideas.

  Finally, my wife, Sarah Bilston, read and helped to rewrite endless drafts, combining honest and even severe criticism with boundless kindness. Her voice is on every page. And at several crucial junctures, my three children (reversing the natural and proper order of things) set aside their own needs in order to help me to write.

  Thank you all.

  Figures and Tables

  FIGURE 1

  Average Hours Worked per Week by Income Rank (Ten-Year Moving Averages)

  FIGURE 1 traces the association between income and industry over the past three-quarters of a century. Workers in the bottom 60 percent of the income distribution work nearly ten fewer hours per week today than they did in 1940, a decline of about 20 percent. Workers in the next 30 percent of the distribution (who lie between the 60th and the 90th percentiles) have worked effectively constant hours over this period. Work hours in the top tenth of the distribution, by contrast, have increased, with growing increases as incomes rise into the narrow elite. The top 1 percent in particular increased its work hours by nearly seven per week, which is more than any lower-income cohort. Uniquely, one-percenters also continued to increase their work hours even in the 2000s. The cumulative effects of this trend are enormous. At midcentury, one-percenters worked between three and four hours per week less than workers in the bottom 60 percent. Today, they work roughly twelve hours per week more. The two components of this realignment (with the 1 percent working twelve hours more per week rather than three to four hours less per week) cumulate to roughly sixteen work hours, or two regulation workdays, per week. Finally, these numbers—because they report on only full-time, non-self-employed, prime-aged men—almost certainly understate the actual trends. Most important, they do not take into account trends in unemployment and especially labor force participation, which again shift work effort away from the middle class and toward the elite.