/ economics

Twilight of the Elites: America After Meritocracy

My GoodReads rating: 4 stars

"Twilight of the Elites" is a great analysis of the current state of affairs in America and an interesting argument against the "meritocracy". The book presents an in-depth examination of the functioning of meritocracies and how they can become corrupted (the author argues that this corruption is virtually inevitable). And while the exposition was excellent, the book's prescriptions were a bit hard to swallow (especially coming off of "Atlas Shrugged" and "Road to Serfdom"). The author advocates for transparency (which I'm all for), but also insists that America needs to focus on equality of outcome instead of just equality of opportunity. I was not convinced. Still, this is certainly a book worth reading (especially if you're an Ivy League grad) for its incisive and hard-hitting commentary that often cuts close to home.

Some of my favorite quotes below:

We now operate in a world in which we can assume neither competence nor good faith from the authorities, and the consequences of this simple, devastating realization is the defining feature of American life at the end of this low, dishonest decade. Elite failure and the distrust it has spawned is the most powerful and least understood aspect of current politics and society.

... among those clued in to elite failure, left/right distinctions are less salient than those between what I call insurrectionists and institutionalists... What divides the institutionalist from the insurrectionist is a disagreement over whether the greatest threat we face is distrust—a dark and nihilistic tendency that will produce a society bankrupted of norms and order—or whether the greater threat is the actual malfeasance and corruption of the pillar institutions themselves.

Thomas Jefferson wrote the following in a letter to his friend John Adams: I agree with you that there is a natural aristocracy among men. The grounds of this are virtue and talents... May we not even say that that form of government is best which provides most effectually for a pure selection of these natural aristoi into the offices of government?

So while the history of enfranchisement moves steadily—if slowly—in the direction of inclusion, the social contract must also accommodate the fact that management of affairs of state and market grow evermore complex and specialized. The result is a cycle of populism, anti-elite revolt, and oligarchic retrenchment, with each new ruling elite displacing its predecessor. “History,” as the Italian political economist Vilfredo Pareto once said, “is the graveyard of aristocracies.”

Traditional left politics, the kind that powered the Labour Party in Britain and the labor movement in the United States, depend on class-consciousness, a kind of solidarity that the meritocracy subverts. The select group of young bright stars of the working class and the poor is taught an allegiance to their fellow meritocrats. They come to see their natural resting place as atop a vastly unequal hierarchy. Those on the bottom who make it to the top rise from their class rather than with it. It is a fundamentally individualistic model of achievement.

The areas in which the left has made the most significant progress—gay rights, inclusion of women in higher education, the end of de jure racial discrimination—are the battles it has fought or is fighting in favor of making the meritocracy more meritocratic. The areas in which it has suffered its worst defeats—collective action to provide universal public goods, mitigating rising income inequality—are those that fall outside the meritocracy’s purview. The same goes for conservatives. Those who rail against unions and for reduced taxes on hedge fund bonuses have the logic of meritocracy on their side, yet those who want to keep gay men and women from serving openly in the military do not.

In Liquidated, her exquisite ethnography of Wall Street, Karen Ho documents the degree to which elite educational institutions and Wall Street have fused into a sort of educational industrial complex: “I found not only that most bankers came from a few elite institutions, but also that most undergraduates... assumed that the only ‘suitable’ destination for life after Princeton... was first investment banking and second management consulting.” Between 2000 and 2005 about 40 percent of Princeton students who chose full-time employment upon graduation went to Wall Street. Harvard featured similar numbers.

In reality our meritocracy has failed not because it’s too meritocratic, but because in practice, it isn’t very meritocratic at all.

In order for it to live up to its ideals, a meritocracy must comply with two principles. The first is the Principle of Difference, which holds that there is vast differentiation among people in their ability, and that we should embrace this natural hierarchy and set ourselves the task of matching the hardest working and most talented to the most difficult, important, and remunerative tasks. The second is the Principle of Mobility. Over time, there must be some continuous competitive selection process that ensures that performance is rewarded and failure punished. That is, the delegation of duties cannot be simply made once and then fixed in place over a career or between generations. People must be able to rise and fall along with their accomplishments and failures.

The Iron Law of Meritocracy states that eventually the inequality produced by a meritocratic system will grow large enough to subvert the mechanisms of mobility. Unequal outcomes make equal opportunity impossible. The Principle of Difference will come to overwhelm the Principle of Mobility. 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. In other words: “Whoever says meritocracy says oligarchy.”

And yet, in one of the grand ironies of American public opinion, the United States is still the place where the meritocratic faith burns brightest. “In Europe,” the Economist noted, “majorities of people in every country except Britain, the Czech Republic, and Slovakia believe that forces beyond their personal control determine their success. In America only 32% take such a fatalistic view.”

OF COURSE, not every institution designed along competitive meritocratic lines devolves into widespread cheating and systemic fraud. Two main disincentives stop people from cheating, even under intense competitive pressure to do so. The first is the existence of ethical norms, whether social or individual. The second is fear of getting caught, and the sanction that might result.

Observing this phenomenon in a letter to his boss, Queen Elizabeth, Gresham concluded that such a result was unavoidable. Surveying the “unexampled state of badness” of England’s coins, he proclaimed “that good and bad coin cannot circulate together.” Thus was born Gresham’s law: bad money drives out good... Once Gresham’s law kicks in, Black told me, it has the perverse consequence of turning reputation on its head. Those engaged in the most fraudulent activity, landing the largest deals and profits, creating the most dodgy and fictitious revenue, come to be the most highly regarded, while those who demur or, worse, blow the whistle come to be viewed suspiciously, even regarded with contempt.

Convicted felon and former superlobbyist Jack Abramoff says he and his fellow influence peddlers would say of a politician that he “got the joke,” to describe the moment when a politician understood the terms of the implied bribe being offered: fund-raising money for a specific legislative favor for his clients. Black says this jokiness is common in white-collar fraud, and he calls it a “neutralization technique,” a means of defusing one’s own moral misgivings. One way to do this, Black told me, “is to make fun of the squares.”

But we cannot have a just society that applies the principle of accountability to the powerless and the principle of forgiveness to the powerful. This is the America in which we currently reside.

This is the reason that “bipartisanship”—at least as a concept—is so reliably popular among a polity increasingly alienated from political parties. People like bipartisanship not because they like the substance of what bipartisanship produces, but because it reduces the cognitive stress that partisan disagreement creates. If two sides are bitterly arguing over some major piece of public policy, this forces us to choose sides, and for those with weak mastery of the issue or tenuous connections to a specific worldview, it is easy to be stalked by the worry that you’re choosing the wrong side

But in surveying this explosion of information and access thereto, we also tend to overlook the other side of the coin: the simultaneous explosion of secrecy. “While we have the most open government in the world, we also have the most prodigiously secret government in the world,” says Aftergood. “No one is generating as many secrets as we are.” Stanford history professor Robert Proctor studied what he calls the world of “secret knowledge,” and was shocked to discover just how massive it is. “The world of secret knowledge is larger than the world of public knowledge,” he told me. In the U.S. there are four thousand censors who just work on censoring nuclear secrets. We live in this world where the public knowledge is just a tiny fraction of secret military knowledge.” The trend accelerated in the wake of 9/11, when the government began constructing a whole new, largely privatized national security apparatus atop the already-massive national security apparatus built up over forty years of cold war.

Without some central institutions that have the inclination, resources, and reputational capital to patrol the boundaries of truth, we really do risk a kind of Hobbesian chaos, in which truth is overtaken by sheer will-to-power.

“As one advances in life,” Ortega y Gasset wrote in his 1930 book The Revolt of the Masses, “one realizes more and more that the majority of men—and of women—are incapable of any other effort than that strictly imposed on them as a reaction to external compulsion. And for that reason, the few individuals we have come across who are capable of a spontaneous and joyous effort stand out isolated, monumentalized, so to speak, in our experience. These are select men, the nobles, the only ones who are active and not merely reactive, for whom life is a perpetual striving, an incessant course of training.”

It’s this basic sense of “elite” that I want to recapture here. For generations, scholars and thinkers of both left and right who have taken to analyzing the elite have recognized that the most salient features of its members isn’t their consumer preferences, aesthetic tastes, or some vague notion of “snobbishness,” but rather their relatively small number, their power relative to the power of the wide swath of their fellow citizens, and their interconnectedness.

Aside from the formal political power vested in those elected and appointed to government, twenty-first-century America features three main sources of power: money, platform, and networks.

That might not be totally shocking, of course, but Gilens also looked at issues where middle-class voters (50th percentile of income) and wealthy voters diverged and found again that legislative outcomes closely tracked the preferences of the wealthy and nearly totally ignored the desires of the middle class. He concludes that “government policy appears to be fairly responsive to the well off and virtually unrelated to the desires of low and middle income citizens.”

More than one-third of congressional staffers turn to a career in lobbying after leaving Capitol Hill. It’s clear the staffer-turned-lobbyist’s value to special interests depends on the robustness of his or her network on Capitol Hill. According to an August 2010 study, when a lobbyist’s former boss on Capitol Hill left office, the lobbyist’s salary declined by an average of 50 percent in the six months following the departure.

The point is this: The 1 percent and the nation’s governing class are more or less one and the same. If you are a member of the governing elite and aren’t a millionaire, you’re doing something wrong. And if the divide between the 1 percent and the 99 percent really is a defining feature of our politics, how can the 99 percent trust that same wealthy, governing elite to zealously pursue its interests?

Though it’s obviously a far cry from the antebellum South, extreme inequality of the particular kind that we have produces its own particular kind of elite pathology: it makes elites less accountable, more prone to corruption and self-dealing, more status-obsessed and less empathic, more blinkered and removed from informational feedback crucial to effective decision-making. For this reason, extreme inequality produces elites who are less competent and more corrupt than those in a more egalitarian social order would. This is the fundamental paradoxical outcome that several decades of failed meritocratic production has revealed: As American society grows more elitist, it produces a worse caliber of elites.

Societies whose upper class is marked by birth, title, and lineage do not tend to cultivate a voracious appetite for competition in the same way ours does. There is a certain security that comes from being at the top, but in a society of fractal inequality there is no top. There is always another height to which to ascend, more competitors to vanquish, more money to obtain. Which is why our elites display a destructive and combustible combination of egomania and entitlement on the one hand and insecurity on the other.

Of all the status obsessions that preoccupy our elites, none is quite so prominent as the obsession with smartness. Intelligence is the core value of the meritocracy... Ironically, in seeking to stand apart, the Cult of Smartness can kill independent thought by subtly training people to defer to others whom one should “take seriously.” This has a particular allure if the views of the serious, smart folks are contrary to those of the public at large or one’s particular peer group. The contrarian position then takes on the aura of prophecy and works as a kind of social signaling; it displays just how smart the possessor of the contrary view is. It shows that person is on the right side of the line that marks off the inner ring.

In a paper about the financial crisis, Rob Johnson and Thomas Ferguson tracked the salary trends for those working in finance and those federal guardians in the agencies tasked with regulating them and found a striking divergence between the two. The authors note: At some point after incomes in the financial sector took off, lifetime earnings of the regulated far outstripped what any regulator could ever hope to earn. Rising economic inequality was translating into a crippling institutional weakness in regulatory structure. Not surprisingly, as one former member of a U.S. regulatory agency expressed it to us, regulatory agencies turned into barely disguised employment agencies, as staff increasingly focused on making themselves attractive hires to the firms they were supposed to be regulating.

These costs are by no means broadly shared. First, unlike previous wars, which imposed some level of civilian sacrifice through rationing, higher taxes, or both, this last decade of war has been financed through government debt at the same time that total federal revenue from individual income taxes has declined by 30 percent in real terms. For current taxpayers who aren’t in the military, the wars are, quite literally, costless. In his comprehensive study of American war funding, Bob Hormats notes that “by supporting and signing expensive spending and tax legislation, President George W. Bush broke with a tradition that had extended from Madison through Lincoln, Wilson, Franklin Roosevelt, Truman, and, eventually, Johnson and Reagan” of “wartime tax increases, cuts in civilian programs, and sometimes both” to pay for larger military engagements.

Writing in the Chronicle of Higher Education, political scientist Michael Nelson argues that the expulsion of ROTC from elite campuses, combined with the implementation of the all-volunteer military, has produced a dangerous estrangement of meritocratic elites from the armed services, one that has “made the nation’s inclination to war and other military action greater than at any time in its already war-saturated history.”

The first step is persuading the public—including the elites themselves—that the ideology of meritocractic achievement stands in the way of social progress. The first commandment of the post-1970s meritocracy can be summed up as follows: “Thou shall provide equality of opportunity to all, regardless of race, gender, or sexual orientation, but worry not about equality of outcomes.” But what we’ve seen time and time again is that the two aren’t so neatly separated. If you don’t concern yourself at all with equality of outcomes, you will, over time, produce a system with horrendous inequality of opportunity. This is the paradox of meritocracy: It can only truly come to flower in a society that starts out with a relatively high degree of equality. So if you want meritocracy, work for equality. Because it is only in a society which values equality of actual outcomes, one that promotes the commonweal and social solidarity, that equal opportunity and earned mobility can flourish.

The same pertains in the United States. As inequality has grown, as its negative consequences have become harder and harder to ignore, our response has been to put more and more weight on the educational system, to look to school reform as the means of closing the “achievement gap” and of guaranteeing the increasingly illusory promise of equal opportunity. We ask the education system to expiate the sins of the rest of the society and then condemn it as hopelessly broken when it doesn’t prove up to the task. Because education lies on the opportunity side of the opportunity/outcome divide, it is the only place where we see sustained and genuine bipartisan consensus on domestic policy. From Ted Kennedy cosponsoring No Child Left Behind, to Mitt Romney praising President Obama’s Race to the Top, there is an elite consensus that education, and specifically a certain vision of education reform, can provide the equality of opportunity that is so scandalously absent at present.

In other words, the tax system, the most straightforward means of restraining inequality, has been subverted, so as to become a tool for maintaining and expanding it.

The nature of the post-meritocratic elite is that it can’t help but produce failure. It is too socially distant to properly manage the institutions with which it has been entrusted.

Max Nova

Max Nova

I love books! My reading theme for 2018 is "Crime and Punishment." I'm also the founder of www.SilviaTerra.com.

Read More