Merit is Privilege

The Meritocracy Trap Daniel Markovits, Allen Lane 2019 

In “1984” George Orwell inscribes his Ministry of Truth with the motto “War is Peace. Freedom is Slavery. Ignorance is Strength.” In fictional Oceania, words no longer mean what they did, and can even signify the opposite. While this madness epitomizes a kind of totalitarian nightmare, the power of the image, and the book as a whole, comes as readers recognize similar—if less extreme—patterns in their own societies.

Today, similar inversions abound and they range from the silly to the sinister. Once a symbol of youthful rebellion and music videos as an emerging art form, the cable channel MTV—that is “Music Television”—no longer plays music and instead uses cheap, mass-produced reality shows to sell consumer goods to kids. In Orwellian terms you might say counterculture now equals consumption. Equally absurd, even as BP spilled 4.9 million barrels of oil into the Gulf of Mexico in 2010, the firm’s marketing emphasizes a commitment to renewable energy, but still directs 96 percent of capital expenditure toward oil and gas. Black, it seems, is the new green.

As Yale law professor Daniel Markovits argues in “The Meritocracy Tramp” the same now occurs with the seemingly benign term “merit”. Whereas aristocracy, plutocracy and kleptocracy are widely discredited methods for organizing society, predicting success, wealth and power on effort, talent and achievement looks like the best possible alternative. “Meritocracy,” Markovits writes, “has become the present era’s literal common sense.” But it actually drives many of the world’s fundamental economic and political problems.

More so than any time in history the best jobs (and the best pay) are obtained through open competition. While the wealthy once passed wealth down to their children through dynastic succession, and aristocrats hardly ever worked, today the rich and powerful almost all have jobs. In fact, the highest-paid bankers, lawyers and CEOs frequently work insane hours. Huge hourly pay, and massive hours differentiate this new ruling class from the middle class, while convincing the beneficiaries that extreme effort means they deserve a special status. “When it frames inequality as justified, meritocracy deprives those at the bottom of an oppressor against whom to assert high-minded claims of justice,” Markovits writes.

Wealthy kids often have take special courses or hire tutors to prepare—something not possible for a poor kid. This is the equivalent of an Olympic 100 meter race that allows some runners to openly use steroids.

The Winners Almost Start the Game with Historic Advantages

In what now seems obvious, this pushes people left behind to invent oppressors, “constructing an identity politics of their own”. In recent years, the bigoted assertion of purportedly male, white and Christian identities (among others) has been an unfortunate result. Meanwhile, extreme cases of isolated greed and wrongdoing—say the infamous, imprisoned pharmaceutical mogul Martin Shkreli who famously raised the price of an essential anti-parasitic drug to $560 per pill—serve as distractions that help solidify the system. “Rising inequality is not driven principally by villains, and moralistic attacks on bad actors neglect morally complex but massively more consequential structural wrongs,” Markovits writes.

Even as professional competition is now open to the best possible candidates, the contest for what Markovits calls “glossy jobs” (as compared to “gloomy jobs”) is actually rigged. While anybody is welcome to try out, the eventual winners almost always start the game with historic advantages. Admission to top universities in the United States, to take a simple example, is determined in part by results on the supposedly objective SAT exam. But wealthy kids often have take special courses or hire tutors to prepare—something not possible for a poor kid. This is the equivalent of an Olympic 100 meter race that allows some runners to openly use steroids, while insisting that losers concede they lost a fair contest. It comes as no surprise that there are more students at Harvard and Yale from families in the top 1 percent of incomes than those coming from the entire bottom 50 percent of the income distribution.

Elite education translates into an elite job that then allows a new generation to finance those same test preparation classes for their own kids.

As Markovits demonstrates, children born into elite households begin distancing themselves from the womb. By the time they turn three years old, a kid born to two professional parents has heard 20 million more words than one whose parents hold non-professional jobs, and 30 million more than a child whose parents are on welfare. In this area, and many others, the gap between elites and the middle class is bigger and growing more rapidly than gaps between the middle and lower classes. Data shows that a super-rich, hyper-educated minority is separating itself from everybody else, leaving the middle class and poor than to fight among themselves for the scraps. “Meritocrats may be made rather than born, but they are not self-made,” Markovits writes.

Inheritance Comes in Less Obvious Ways

Unlike aristocrats of the past, meritocrats are wary of passing wealth down to their children through monetary inheritance. To do so would expose the myth of meritocracy—that elites have earned everything they got—as a lie. But inheritance comes in less obvious ways. Markovits calculates that—over the course of childhood through private school tuition, tutors and special training, trips to museums, and after school activities—a family in the top 1 percent of income invests $10 million more per child in education than a typical middle-class family. “This sum values an elite child’s meritocratic inheritance,” Markovits writes. “It’s an inheritance because it runs from parents to children and promotes an elite family’s dynastic ambitions.”

Once in motion, the meritocratic cycle accelerates. In expensive private schools, students further distance themselves from their counterparts. Elite education translates into an elite job that then allows a new generation to finance those same test preparation classes for their own kids. Ensconced in a glossy job, elites justify their inflated salaries and sense of importance with the genuine belief that is has come about from hard work. At some point, no amount of effort can close the gap or allow an outsider entry to this elite status. “To be middle class in a mature meritocracy is to be not just old-fashioned but backwards-looking,” Markovits writes.

Quite a lot of the wealth generated via capital gains is actually labor wealth in disguise. High-level executives and CEOs are paid for work through equity in the company, for example, rather than cash.

In a structural sense, Markovits’s argument runs counter to the one made by French economist Thomas Piketty’s 2013 book “Capital in the Twenty-First Century”. Piketty argued that growing inequality comes as rates of return on capital outpace overall economic growth. That signifies that people that control property (capital) are keeping an increased share of profits for themselves, at the expense of everybody else.

In the US, Economic Inequality is Generally Worse

While Markovits agrees that inflated returns on capital have tilted economic benefits toward the rich, he contends that it accounts for a mere fraction of the problem. He concludes that three-quarters of the increased wealth among the top 1 percent over the past 50 years has come from the redistribution of labor income, not return on capital. Rich people, he says, are getting richer because they get paid bigger and bigger salaries. “Meritocratic inequality principally arises not from the familiar conflict between capital and labor,” he writes, “but from a new conflict—within labor—between superordinate and middle-class workers.”

Markovits points out that quite a lot of the wealth generated via capital gains (which are also taxed at lower rates than labor income) is actually labor wealth in disguise. High-level executives and CEOs are paid for work through equity in the company, for example, rather than cash. “Over the past twenty years, roughly half of all CEO compensation across the S&P 1500 has taken the form of stock or stock options.” Even traditional employer-based private pensions (once more common for the middle class, and now skewed to elite jobs) or matching 401K investment plans accumulate size and strength proportionate to the number of years worked (labor).

Much of Markovits’s argument centers on the United States, where economic inequality is generally worse than in Europe and socio-economic divisions have accelerated faster in the past half-century. To illustrate the massive divide, Markovits juxtaposes Palo Alto, California—home to Stanford University and dozens of Silicon Valley startups—with St. Clair Shores, Michigan—a working-class suburb of Detroit about 20 minutes from where I grew up. In 1960, median income, housing prices and education levels were about the same in both places. Today, median incomes in Palo Alto triple St. Clair Shores, and houses are twenty times more valuable. Meanwhile, Palo Altans are three times more likely to have a bachelor’s degree and five times more likely to have graduate or professional degrees.

The American Education System Benefits Existing Elites

Markovits is not the first to question the merits of meritocracy in the United States, a country that bases its entire national narrative on self-determination and hard work. In 2015, Harvard law professor Lani Guinier published “The Tyranny of Meritocracy,” which attacked the ways the American education system benefits the existing elites. The fourth edition of another major sociological study, “The Meritocracy Myth,” by scholars Stephen J. McNamee and Robert K. Miller Jr. came out in 2018. It emphasized how race, class and gender often mediate any competition. In 2016, economics scholar and New York Times columnist Robert H. Frank published “Success and Luck,” which argued that the rich underestimate the role luck has played in their success. But Markovits’s use of data to demonstrate the impact of meritocracy, and his ability to fit it within a larger macroeconomic narrative separates this book from earlier inquiries.

Even as the United States represents the extreme “mature meritocracy”, a growing meritocratic divide is apparent in many countries.

Even as the United States represents the extreme “mature meritocracy,”, a growing meritocratic divide is apparent in many countries. As far back as 1958, the British sociologist Michael Young forecast a dystopian meritocratic future for the UK in his book “The Rise of the Meritocracy”. He was sufficiently appalled when this term of derision took on positive connotations under the New Labour governments of the 1990s to reengage in the debate. “It is good sense to appoint individual people to jobs on their merit,” he wrote in a 2001 opinion piece in The Guardian. “It is the opposite when those who are judged to have merit of a particular kind harden into a new social class without room in it for others.”

Meritocracy Fosters Educational Apartheid

Globally, between 1988 and 2008, the top 1 percent of earners saw their incomes grow at three times the rate of the world economy as a whole. Today, inequality in France and Germany is about the same as it was in the United States in the 1980s—a gap that once appalled Europeans. “Economic decline, cultural stagnation, and political alienation in St. Clair Shores have close parallels in Blackpool (England), Amiens (France) and Buckenberg-Pforzheim (Germany),” Markovits writes. While numbers in the UK track American trends closest, not all of Britain’s top earners are actually Brits. According to the European Banking Authority, 73 percent of Euro-pean bankers earning more than €1 million per year are based in the UK.

Meanwhile, the Bulgarian thinker Ivan Krastev has written about meritocracy breeding resentment for the European Union, where multinational teams of experts set policies for everybody else. “The paradox of the current political crisis in Europe is rooted in the fact that the Brussels elites are blamed for the same reasons that they praised themselves for: their cosmopolitanism, their resistance to public pressure and their mobility,” Krastev writes.

The private sector follows a similar meritocratic playbook, often sharing personnel back and forth with Brussels, while international corporations shuttle managers from metropolis to metropolis.

The private sector follows a similar meritocratic playbook, often sharing personnel back and forth with Brussels, while international corporations shuttle managers from metropolis to metropolis. Krastev compares the movement of this elite class to the transfer of football players. A consultant for McKinsey is a lot like a French striker who is equally comfortable scoring goals in Madrid, Milan, Munich or Manchester. “But what happens when these teams start to lose or the economy slows down?” he asks. “Their fans abandon them. That’s because there’s no relationship connecting the ‘players’ and their fans beyond celebrating victories. They are not from the same neighborhood. They don’t have mutual friends or shared memories.”

Markovits demonstrates that meritocracy breeds inequality, hinders social mobility and fosters economic and educational apartheid. Even meritocrats are harmed by longer working hours, as their children forego childhood to jump on the conveyor belt of elite training at ever younger ages. “In a mature meritocracy, schools and jobs dominate life so immersively that they leave no self over apart from status,” he writes.

If the causes and effects are clear, the solutions less so. While Markovits offers some ideas, changing tax laws for example, they require winning political battles. True believers in a meritocracy are unlikely to be convinced by his data. Like any prevailing ideology, their belief is wrapped in a moral argument that sees everything they possess as justly earned. Furthermore, meritocrats occupy positions of power and in recent decades politics have managed to shape government, lawmaking and political competition to meet their own ends. Changing meritocracy may require meritocrats to reform themselves. “Although meritocracy once opened up the elite to outsiders,” Markovits writes, “the meritocratic inheritance now drives a wedge between meritocracy and opportunity.”

Or as Orwell might say, merit is a privilege.