Review - Twilight of the Elites

"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"). Hayes 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.

I was struck by Hayes's emphasis on the need for downward mobility for elites. This sentiment is echoed by Taleb's "Skin in the Game." I also noticed in the acknowledgements that Edmund J. Safra Foundation Center for Ethics at Harvard hosted Hayes as he wrote this book. That's the same Edmund Safra who financed Bill Browder's Hermitage Capital in "Red Notice".

My highlights below.

Chapter 1 - THE NAKED EMPERORS

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.

Just as elite failure claims a seemingly unrelated number of victims — the Palm Beach retiree bankrupted by Bernie Madoff and the child left homeless after his mother’s home was foreclosed — so, too, will you find that 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.

The meritocracy offered liberation from the unjust hierarchies of race, gender, and sexual orientation, but swapped in their place a new hierarchy based on the notion that people are deeply unequal in ability and drive.

a year after they induced the worst financial crisis in eighty years, Illinois senator Dick Durbin was moved to tell an interviewer that banks’ influence on Capitol Hill was so great that “they frankly own the place.”

Chapter 2 - MERITOCRACY AND ITS DISCONTENTS

The playing field may be level, but certain kids get to spend nights and weekends practicing on it in advance of the competition.

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.

But there are two distinct but related pathways of meritocratic achievement in American society. The other ladder into the upper echelons, the one that allows certain people to bypass the credentialing of elite institutions, is the world of business. If you make enough money, people care a lot less where you went to school.

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.

Michels’s grim conclusion was that it was impossible for any party, no matter its belief system, to actually bring about democracy in practice. Oligarchy was inevitable. “The most formidable argument against the sovereignty of the masses,” Michels came to believe, “is... derived from the mechanical and technical impossibility of its realization.” For any kind of political party, or, indeed, for any institution with a democratic base, to consolidate the legitimacy it needs to exist, it must have an organization that delegates tasks. The rank and file will not have the time, energy, wherewithal, or inclination to participate in the many, often minute, decisions necessary to keep the institution functioning. In fact, effectiveness, Michels argues convincingly, requires these tasks be delegated to some kind of permanent, full-time cadre of leadership: “In the great industrial centers, where the labor party sometimes numbers its adherents by tens of thousands, it is impossible to carry on the affairs of this gigantic body without a system of representation.”

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.”

American universities are the central institution of the modern meritocracy, and yet, as Daniel Golden documents in his devastating and meticulous book The Price of Admission, atop the ostensibly meritocratic architecture of SATs and high school grades is built an entire tower of preference and subsidy for the privileged: At least one third of the students at elite universities, and at least half at liberal arts colleges, are flagged for preferential treatment in the admissions process. While minorities make up 10 to 15 percent of a typical student body, affluent whites dominate other preferred groups: recruited athletes (10 to 25 percent of students); alumni children, also known as legacies (10 to 25 percent); development cases (2 to 5 percent); children of celebrities and politicians (1 to 2 percent); and children of faculty members (1 to 3 percent).

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.”

Chapter 3 - MORAL HAZARDS

This wasn’t unique to Enron. In fact, one of the lessons of the decade is that intensely competitive, high-reward meritocratic environments are prone to produce all kinds of fraud, deception, conniving, and game rigging.

“High-powered incentive schemes are designed to align the behavior of agents with the interests of the principal implementing the system,” Levitt and his coauthor Brian Jacob wrote in their 2003 paper “Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating.” A shortcoming of such schemes, however, is that they are likely to induce behavior distortions along other dimensions as agents seek to game the rules... As incentives for high test scores increase, unscrupulous teachers may be more likely to engage in a range of illicit activities, including changing student responses on answer sheets, providing correct answers to students, or obtaining copies of an exam illegitimately prior to the test date and teaching students using knowledge of the precise exam questions.

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.

Chapter 4 - WHO KNOWS?

There is no way to extricate ourselves from this web of mediation. What we actually know firsthand is minuscule: the feel of the spring air on our skin, our own private daydreams and phobias. Outside of these tiny warrens of private knowledge, we have to depend on what others say. “The bulk of our knowledge — perhaps virtually all of it — depends on others in various ways,” writes political philosopher Russell Hardin. “We take most knowledge on authority from others who presumably are in a position to know it.” To know something is to have heard it from a trusted source. Trace the chain of knowledge a few links and you inevitably find it attached to some bedrock of institutional authority. Without these anchors, our basic knowledge structure threatens to drift away.

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: After all, there are a ton of people screaming in righteous indignation that the side you’re on is about to destroy the country. Maybe they have a point.

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.

We live in an informational interregnum. The old gatekeepers have been discredited but not discarded. Their challengers are capable of subverting consensus and authority but not reconstituting it. And into the breach comes Julian Assange bearing a single, simple radical promise: total information can provide our salvation. If Julian Assange did not exist, we would have to invent him. With his white hair and lip that curls into something between a smirk and a snarl, his playful but vaguely sinister affect, Assange seems almost too cinematic to be real, as if our collective skepticism and distrust managed to conjure him into being.

WikiLeaks’ ethos was grounded in Assange’s worldview, one distrustful, to the point of near paranoia, of any source of authority. “He had come to understand the defining human struggle not as left versus right, but as individual versus institution,” the New Yorker wrote in a 2010 profile. “As a student of Kafka, Koestler, and Solzhenitsyn, he believed that truth, creativity, love and compassion are corrupted by institutional hierarchies ‘that contort the human spirit.’” He is, in other words, the ultimate insurrectionist.

WikiLeaks’ defenders pointed to a simple, powerful principle: Citizens of a democratic republic have a right to know what their government is doing. Daniel Ellsberg, who struck his own blow for openness during the Vietnam War by leaking the infamous Pentagon Papers to the New York Times, defended Assange in precisely these terms. “The founding of this country was based on the principle that the government should not have a say as to what we hear, what we think, and what we read,” he told Stephen Colbert in December 2010. “We’re not in the mess we’re in, in the world, because of too many leaks.”

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.

Chapter 5 WINNERS

“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.

Meanwhile, hedge fund managers and their surrogates have deployed millions of dollars to lobbyists to maintain the so-called carried interest loophole, a provision of tax law that allows fund managers to classify much of their income drawn from investing gains as “carried interest” so that it is taxed at the low capital gains rate of 15 percent, rather than the marginal income rate, which would in most cases be more than twice that. It was this wrinkle in the law that helped Mitt Romney, a man worth an estimated quarter of a billion dollars, pay an effective tax rate of just under 14 percent in 2010. In 2008, 2009, and 2010, the House of Representatives passed a bill closing the loophole, only to see it beaten back by an intense wave of lobbying in the Senate.

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.”

All of which means the average teenager now has a platform far greater than your average well-regarded professional adult only two decades earlier. This potentially represents a radical, historic shift in the distribution of power in the country.

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.

Once a member of the elite has sufficiently monetized his or her power, that money can be traded for other kinds of power, which in turn can be invested and reap its own kinds of rewards. Harold Ford Jr.’s political and media networks made him an attractive hire for Citigroup, where he was, in turn, able to expand both his Rolodex and his earning potential. As this positive feedback loop plays out, the elite increasingly becomes an entirely distinct group, moving effortlessly between public and private life, alternating between access to state power and market power.

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.

The hierarchies of postwar England were different in many crucial ways from the hierarchies of twenty-first-century America, but what is the meritocracy if not an endless series of inner rings? It is quite consciously designed not only to funnel “the right people” into successively smaller inner rings, but also to stoke in them an insatiable desire for achievement, the need to penetrate farther and farther into the elusive center. But Lewis saw decades ago that a system that requires passing through a near endless series of such inner rings will also provide a near endless series of opportunities for moral corrosion.

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.

A legacy student at an Ivy League university certainly doesn’t feel as if she has coasted in on her father’s coattails. She feels instead that she’s killed herself for four years at her prestigious high school to earn her grades, her internships, and her postgraduate job opportunities. As was said of George W. Bush, it is tempting for those born on third base to believe they’ve hit a triple. This means we are cursed with an overclass convinced it is composed of scrappy underdogs, individuals who are obsessed with the relative disadvantages they may have faced rather than the privilege they enjoyed. It is remarkable how under siege and victimized even the most powerful members of society feel, how much they tout their own up-by-their-bootstraps story. In fact, a basic ritual associated with entrance into the circle of winners is constructing a personal story about how it was through grit, talent, and determination that you fought your way into it.

This penchant to view oneself as an outsider is coupled with the other psychological side effect produced by ceaseless competition, which is a kind of compulsive self-obsession. One of the most interesting psychological trends over the last four or five decades is a marked increased in the population’s self-esteem. According to psychologist Jean Twenge, who studies longitudinal trends in Americans’ mental dispositions, in 1950 12 percent of teenagers agreed that “I am an important person.” Three decades later, that percentage was 80 percent. But among those who assert their own self-worth, psychologists found two distinct personality types. One group are those who report high self-esteem and also high levels of happiness, fulfilling friendships, and social relations. The other group report high self-esteem but also display a host of antisocial tendencies, including violence, racism, and lack of empathy.

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, one which stretches back to the early years of standardized testing, when the modern-day SAT descended from early IQ tests. To call a member of the elite “brilliant” is to pay that person the highest compliment. Intelligence is a vitally necessary characteristic for those with powerful positions. But it isn’t just a celebration of smartness that characterizes the culture of meritocracy. It’s something more pernicious: a Cult of Smartness in which intelligence is the chief virtue, along with a conviction that smartness is rankable and that the hierarchy of intelligence, like the hierarchy of wealth, never plateaus. In a society as stratified as our own, this is a seductively natural conclusion to reach. Since there are people who make $500,000, $5 million, and $5 billion all within the elite, perhaps there are leaps equal to such orders of magnitude in cognitive ability as well.

This is a potent articulation of the dark emotional roots of the Cult of Smartness: the desire to differentiate and dominate that the meritocracy encourages. 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.

Fractal inequality doesn’t just produce errors of judgment like those we saw during the run-up to Iraq, it also creates a system of incentives that produces an insidious form of corruption. This kind of corruption isn’t the obvious quid pro quo kind of the Gilded Age or the old Chicago machine — there are precious few cases in which politicians are taking satchels of cash in exchange for votes. What’s far more common is what the Harvard law professor Lawrence Lessig calls “institutional corruption,” in which, in Lessig’s words, an institution develops an “improper dependency,” one that “conflicts with the dependence intended.”

Originally, the ratings agencies made their money from investors who paid subscription fees in exchange for access to their ratings. But over time the largest agencies shifted to a model in which the banks and financial entities issuing the securities would pay the agencies for a rating. Obviously these new clients wanted the highest rating possible, and often would bring pressure to bear on the agencies to make sure they secured the needed triple A. And so the ratings agencies developed an improper dependence on their clients, one that pulled them away from fulfilling their original institutional purpose of serving investors. They became corrupt, and the result was trillions of dollars in supposedly triple-A securities that became worthless once the housing bubble burst.

Lawrence Lessig argues that we see a similar and singularly destructive example of this dynamic at work in the United States Congress. Nearly every single legislator will insist, vigorously and plausibly, that he or she has never changed a vote in exchange for a donation. But rather than a complete dependence on the voters, Congress also now has a dependence on the funders. And it is obvious that this powerful dependence on check-writers is, from the perspective of the Constitution, an improper one. It pulls Congress away from its true purpose, which is to turn the conflicting, complicated wishes of the people into laws with which they can govern themselves.

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.

Mishkin even took $124,000 from the Iceland Chamber of Commerce to write a paper endorsing the country’s economic model, just a few years before it collapsed.

Chapter 6 - OUT OF TOUCH

It is an article of faith among the Chinese ruling class that they can only manage their monopoly on power if they don’t grow excessively “out of touch.”

The basic intuition here is that the closer those in charge are to the consequences of their actions, the more responsive they’ll be, and the better decisions they will make. It’s not ironclad, of course, but all things being equal one would rather have one’s mayor live in the city he administers, rather than halfway around the globe. It’s the logic upon which our constitutional protection to be tried by a “jury of one’s peers” is grounded. It’s the same notion behind our sometimes messy system of federalism, which allows for decisions to be made at the level closest to those who are affected.

But the most meaningful finding is that power narrows the vision of the powerful. According to the literature, those in power pay less attention to the characteristics, views of, and details about the low-power people they encounter, and are less empathetic overall.

Bishops are the very archetype of a cosseted elite, remote and diffident and hermetically sealed. This remoteness was the key enabling factor: it misformed the allegiances of the bishops as loyalty first to their institution, followed by compassion for their brother priests, with very little left over for their actual flock.

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.

This phenomenon, the “civilian-military gap,” is, to a certain degree, an enduring feature of American life, but the particularly acute class division we see now is of fairly recent vintage. Donald Downs, a political scientist at the University of Wisconsin, Madison, who’s written about the relationship between the military and top universities through the ROTC system, says the cost of the civilian-military gap is “alienation that impoverishes citizenship on both sides.” The vast and increasing social distance between the overwhelming majority of current elite decision-makers and the warrior class amounts, he says, to a “corrosive civic scandal: Elites wash their hands of this burden. It’s out of sight, out of mind.” People on “both the right and the left,” Downs says, “can agree that this is problematic.”

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.”

In January 2003, decorated Korean War veteran and opponent of the Iraq War Charlie Rangel sponsored a bill to reinstate a draft, citing more or less precisely this rationale. “There’s no question in my mind,” he said at the time, “that this president and this administration would ever have invaded Iraq if indeed we had a draft and members of Congress knew that their kids from their communities would be placed in harm’s way.”

Chapter 7 - REFORMATION

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.

As Newsweek noted in 2009, “Between 2003 and 2008, the top 10 percent of Brazilians got 11 percent richer, while the bottom tenth saw their earnings jump 72 percent.” Much of this is due to a straightforward program of downward redistribution called the Bolsa Família. The program uses general government revenue collected through progressive taxation to pay for cash subsidies to the poorest Brazilians, so long as they send their kids to school and go for regular checkups at free federal health clinics. The Lula government also increased pension payouts, as well as the minimum wage, by a whopping 50 percent.

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 social distance between the current beneficiaries of our post-meritocratic social order and its victims must be annihilated.

There are few forces more powerful in politics than downward mobility, the dispossession of the formerly privileged. As my father, a community organizer, once told me, the most difficult task an organizer faces when organizing the poor or working class is convincing people that they are entitled to something better, that they can assert their own claims and have them be taken seriously. America’s upper middle class needs no such provocation.

“It’s about class,” Occupy Wall Street organizer Andrew Smith told me. “People can’t unify around party or religion, but we can unify around class.”

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.

Ayn Rand devotee Wales was able to implement his “plan” without having to convince a single legislator of its efficacy.

Acknowledgments

Despite my lack of academic pedigree, Lawrence Lessig was gracious enough to invite me into the fold of the Edmund J. Safra Foundation Center for Ethics at Harvard, where I spent a year as a nonresident fellow in the lab on institutional corruption.