This article was originally a review of a book. I have edited it fairly heavily to highlight the points I am interested in. Follow the link in the title to see the origional, if you are interested.
Tyranny of Merit
Twilight of the Elites: America After Meritocracy, Christopher Hayes, Crown Publishers, 292 pages
(book review) By SAMUEL GOLDMAN • August 21, 2012
“Elite” wasn’t always a dirty word. Before the 19th century, the term described someone chosen for office. The pre-Victorians transformed it into a collective noun with class implications. By the 1830s, “elite” referred to the highest ranks of the nobility.
These days, “elite” means essentially a snob. Not, however, a snob of the old, aristocratic breed. In this context, “elite” means men and women who think degrees from famous universities mean they know better than their fellow citizens. Elites like these have been getting their way on Wall Street and in Washington for years, with disastrous results. America is governed by a ruling class that has proved unworthy of its power, and the failures of the last decade have created a deep crisis of authority. We count on elites to do the right thing on our behalf. From wars, to abuse in the Catholic Church, and above all the financial crisis it shows that they didn’t know enough, or care enough to do so.
To advance two explanations for these failures. The first emphasizes elite ignorance. People with a great deal of money or power aren’t like the rest of us. Their whole lives are different to those of ordinary people. This isn’t always because their tastesare distinctive (at least initially) it’s often a job requirement. In addition, elite types don’t spend much time with averages Joes. At work, they’re surrounded by subordinates. At home, they live in literally or metaphorically gated communities and socialize with people similar to themselves.
Again, there’s nothing sinister about this. Because of their distance from the rest of the population, however, members of the elite often have little idea what’s going on in less rarefied settings. Ignorant of the challenges that the poor and middle-class face, and separated from the consequences of their actions, elites have trouble making good decisions. They are susceptible to making policies that seem reasonable but which on-the-ground experience would expose as ineffectual. The distance of elites can also have moral consequences. When policies fail, isolated elites are more likely to blame their subjects than themselves, for elites like these it’s always someone else’s fault. All elites risk falling out of touch, and always have – effective authority, must be accountable authority.
The other aspect of elite failure, is the principle of selection used by the most influential institutions. Modern American elites are distinctive because they acquire status by means of ostensibly objective criteria. As a result, they think they deserve their wealth and power.
The ideal of meritocracy has deep roots. But the modern meritocracy dates only to the 1930s, when Harvard settled on the SAT exam to find a measure-of-ability to supplement the Old-Boys network. In the decades following World War II, standardized testing replaced the gentleman’s agreements that had governed the Ivy League. First Harvard, Yale, and then the rest, filled with the sons and eventually daughters of Jews, blue-collar workers, and other groups whose numbers had previously been limited. After graduation, these newly pedigreed men and women flocked to New York and Washington. There, they took jobs once filled by products of New England boarding schools. While we may applaud the replacement of the WASP ascendancy with a more diverse cohort. The principle on which they rose inevitably undermines itself.
Meritocracy does not oppose unequal social and economic outcomes. Rather, it justifies inequality by offering greater rewards to the talented and hardworking (Presuming that everyone has the same chance to compete under the same rules). That may be true at the outset. But tends to be subverted by the inequality of outcome that meritocracy legitimizes. In short, those who are able to climb up the ladder will find ways to pull it up after them, or to selectively lower it down to allow their friends, allies and kin to scramble up. Meaning, whoever says meritocracy says oligarchy.
Call this paradox the “Iron Law of Meritocracy”. The way the Iron Law operates at Hunter College High School in New York City is this; admission to Hunter is based on the results of a single test offered to 6th graders who did well on statewide tests in 5th grade. Because there are no preferences for legacies, donors, members of minority groups, or athletes, admission to Hunter seems like a pure application of the meritocratic principle. Except it doesn’t work that way.
Although its student body once reflected the racial and economic proportions of the city, Hunter has grown increasingly wealthy and white. Why? Because rich parents have discovered strategies to game the system, and give their kids a substantial leg up. These children are better prepared than rivals – and they’re clearly bright and hardworking. But it’s hard to conclude that they’ve earned their advantage, they’ve been fortunate to have parents who know what it takes to climb the ladder and can pay for those advantages. Yet the ideal of meritocracy obscures the accident of birth. From Hunter to Harvard to Goldman Sachs, the meritocrats proceed through life convinced that they owe their rise exclusively to their own efforts. Of course, most elites have fancied themselves a superior breed. But the way ‘meritocracy’ obscures the role of chance, encourages the modern elite to think of themselves as unusually deserving individuals, rather than members of a ruling class with responsibilities to the rest of society.
Finally, the selection of the elite for academic accomplishment leads to a cult-of-intelligence that discounts the practical wisdom necessary for good decision-making. Remember Enron? They were ‘the smartest guys in the room’. Which shows why our elites take the form they do and how they fell so out touch with reality. The modern elite is caught in a feedback loop that makes it less and less open, and more and more isolated from the rest of society.
The defect of meritocracy is not the inequality of opportunity that it conceals – but the inequality of outcome that it celebrates.
In other words, the problem is not that the son of a postal clerk has less chance to become a Wall Street titan than he used to. It’s that the rewards of a career on Wall Street have become so disproportionate to the rewards of the traditional professions, let alone a humble civil servant.
While the income and influence of the very rich has zoomed ahead, the stagnation of the economy has left the rest at risk of proletarianization. The meritocratic elite that has overseen one of the most disastrous periods of recent history. To rescue ‘Meritocracy’ from its failings would require legislators who are not either drawn from it, or depend on it. Like the poor, elites will always be with us. There is no society without a governing class. Whether they’re selected by birth, intelligence, or some other factor, some people inevitably exercise power over others.
The question is: how they ought to be chosen.
[ Samuel Goldman is a postdoctoral fellow at Princeton ]
Hidden in all this is an assumption that: because you are brighter, smarter, better – that means that you should be rewarded better, and the better you are rewarded, the better.
If you end up being the managers and decision makers, if becomes very easy to decide to make it so. You set the level of your own rewards and remuneration.
I would argue that is is fairly important that the managers and decision makers are not left alone to decide how much of the wealth of society they get to skim off the top. And they should certainly not be left the freedom to rape and pillage to the extreme extent of their capability. A free society is not one where you are free to get away with whatever you can. That is not a society, that is a jungle.
Next: as stated in the article, ‘elites’ of one form or another are both inevitable, and necessary. But it is patently obvious they also need to be ring fenced off into socially acceptable arena’s and monitored. They are a tool for society, not an end in themselves. The rest of us do not need, and must not condone, self centered and self referencing narcissists who compete with each other to see who can afford the biggest Super-yacht (machines that burn more fossil fuels in one day than the rest of us would use in a decade).
Not only is that a form of behaviour that is obnoxious in and of itself, it is an outrageous diverting of wealth towards pointless vanities, when there is so much more important things that need doing. Certainly you can argue; what place is it of mine to say what anybody else should do with their money, and what makes my priorities so much more righteous? On the other hand, if no-one is making (I won’t say earning) hundreds of millions, or even billions of dollars – then they wont be buying hundred-million dollar super-yachts either now will they.
The idea that the ‘Boss’ is entitled to rake out multi million dollar bonuses from a business while the employees are on minimum wage is classic self justification. The winner rewriting history to suit themselves. The fact that society lets them get away with doing so is a flat out indictment by itself. The communists had a go at re-imagining and restructuring society, albeit one that ended in pretty abject failure. However that fact that those attempts lasted as long as they did suggests the idea of a transformation was one that did have a mass appeal, and some merit.
The trick then is to find a mechanism and system that allows the smart and ambitious to do well, without letting them run wild – no more Enron’s. Part of that is, as was indicated in the article, having a ‘good’ system for who ‘chooses’ the elites. And there is a big essay of its own…
The other part is proper ‘cost control’. You can be ‘elite’ as you like – but that doesn’t mean you get to set your own pay-rate. Pay must be seperated from power. Otherwise the result is, variously: Fascism, crony capitalism, Corporatism, corruption, aristocracy, plutocracy – call it what you will – they are all the same thing really: self serving opportunism. The people doing it do so because they can! Our job is to ensure they can’t, and the extent to which we fail at that we will be directly injured – and they will be too caught up in their own bubble of self interest to care. If we don’t care enough to stop them, why should they care enough to consider us. It is possible to find the right balance.
As an example, universities have many smart people working in them, but they don’t get to set their own salaries. Therefore, they do get paid better than average, but not outrageously so. Some variation of that principle needs also to be applied to Bank CEO’s and the like. Without the outragious rewards, many of the current crowd in finance would likely find somewhere else to go.
And perhaps it would be a proper function of a National Intelligence Service to identify, track and monitor what and where the amoral and the sociopaths are migrating to. They will always be hunting for the next opportunity to make a killing somewhere, and the rest of us need to be actively working to contain and channel them. Apart from the fact that demonstrably we can’t afford to let them do as they will, I have no doubt that there are solutions and mechanisms for using their talents and energies in a socially constructive manner. Or if necessary, segregating them off into a isolation space where they can play their games amongst themselves – and injure only themselves. Their attitudes and values can not be allowed to be to become a social norm.
America’s founding fathers had the concept of a separation of executive powers. That separation can also be extended to include the fields of: making money and profits – and the making and administering the rules. They can both be run by ‘elites’ – just not the same elites. Meritocracy is an essential element of the selection of an elite. But elites must not self-define merit. Or what they get paid.
The extent to which we can find and maintain that balance and separation will determine the health and well-being of our society.
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