These two books were published around 18 months ago but what has transpired in these 18 months makes it highly likely that the themes highlighted in these books will become the underpinning of political ideas not just in the USA (where the authors of both of these books are based) but in several other countries – including India – where a ‘meritocracy’ based paradigm has been imposed on the people.
Branko Milanovic nicely captures the crux of the ‘meritocracy’ based paradigm: “Markovits argues that “what is conventionally called merit is actually an ideological conceit, constructed to launder fundamentally unjust allocation of advantage”…The system is relatively easy to explain by writing it as a modified Marx’s famous M-C-M’ scheme (invested money => production of commodities => more money). Here it is M-E-M’ where E stands for production of children’s education. The moneyed elite, itself well educated and hardworking, dedicates an enormous amount of effort and money to place its children through the most expensive, elitist and competitive education system in the world that begins with pre-K and ends with the graduate school—in order to make sure that children earn even higher incomes and stay on top. “Meritocracy” is thus just another way to create and maintain a de facto ruling class, an aristocracy, where the birth advantage (fundamental to its power) is concealed by educational credentials. In a number of instances, Markovits indeed likens today’s meritocracy with the old-fashioned aristocracy (and not always favorably).
Meritocracy has several features. Its members are highly educated and credentialed; they are hardworking (“[t]oday’s Stakhanovites are the one-percenters”, p. 81) and combine “progressive virtues” of inclusion and privacy, with “conservative virtues” of hard work, saving and contempt for the poor.”
Milanovic, himself a celebrated economist specialising in the economics of inequality, then helps us understand why an attack ‘meritocracy’ and ‘elite education’ will become a potent political theme: “Through such contempt and their belief that advantages they enjoy are fully merited, meritocrats have created a deep chasm within the US polity between themselves and the rest, most notably between themselves and the middle class (the poor never played much of a role anyway). As Markovits argues, not only in income, but in consumption patterns, beliefs, attitude to and health outcomes etc. the gap between the meritocrats and the middle class is wider today than the gap between the middle class and the poor.
Education is the key mechanism through which meritocracy reproduces itself. The investment in children’s education begins at age 2. By the time children of the rich get out of the graduate school, the cumulative difference between parental investment and subsidies provided by the elite schools they have received, and investments along the similar path taken by the children of the middle class, attains an astronomical amount of 10 million US dollars.
The scions of the rich thus become managers of an enormous fortune, their own personae. Their behavior can then in turn be best understood to be that of a wealth manager who is in charge a peculiar and huge wealth portfolio: themselves. No moment may be lost in not putting that capital at work, for every moment lost is a loss of income.”
Daniel Markovits’ review of Michael Sandel’s book then explains how Sandel’s book successfully attacks (in Markovits’ view) the ideological underpinnings of a merit based elite running large democracies: “The meritocracy that dominates contemporary American social and economic life gives a distinctive answer to the foundational question “What is merit?” Other (earlier) meritocracies developed elaborate discursive accounts of what merit involved. For example, the Chinese exam-based meritocracy that began in the Tang dynasty grew central in the Song and endured for over a millennium, emphasizing literary style and classical erudition, and the Mongol empire built a meritocratic military elite based on bravery and martial skill. The contemporary United States, by contrast, embraces a market meritocracy, according to which merit is not elaborated discursively following one or another moral ideal but rather through the economic interaction between supply and demand. Markets establish a shared public frame of value in the United States today, as prices—including most importantly the price of labor, or wage—capture the conventional understanding of what things are worth. U.S.-American meritocrats also—now pursuing meritocracy’s more familiar function—propose that people (at least in general) deserve their market returns, as in the common suggestion that businesses earn their profits and (more pervasively still) in the suggestion that workers earn their wages. Often, U.S.-American meritocrats fuse these two facets of market meritocracy into a single principle, as in the economist Gregory Mankiw’s embrace of what he calls the “principle of just deserts,” which holds that “a person who contributes more to society deserves a higher income that reflects those greater contributions” and measures contributions according to market income, or “the value of what [the person] contributed to society’s production of goods and services.”
Michael Sandel’s recent critique of meritocracy—in The Tyranny of Merit: What’s Become of the Common Good?—takes aim at both facets of U.S.-American market meritocracy, although he prosecutes his attack on the idea that meritocracy rationalizes hierarchy more directly and at greater length than his attack on market meritocracy’s peculiar conception of merit…Meritocratic hierarchy is tyrannous precisely because it is not rationalizable—neither the rich nor the rest earn or otherwise deserve their market returns—and this makes meritocratic inequality into a form of dominance and subordination. People do not deserve their luck in the genetic and social lotteries—in the advantages or disadvantages that they inherit from their parents and the world—and market meritocracy only exacerbates the economic, social, and psychological effects of inequalities that it cannot justify. Sandel describes the mechanisms and prejudices—unequal schooling, skewed labor markets, smug credentialism—that, taken together, make meritocracy oppressive in these ways.”
As is the case with all good political ideas, neither author and neither reviewer can suggest an alternative way forward. However, that is unlikely to stop ambitious politicians the world over from latching on to the power of the anti-meritocracy narrative.
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.