“Meritocracy” is not one thing. It tracks to four different ideas:
Intrinsic qualities convert inputs into valuable outputs — true.
Institutions select people with the right qualities — half true.
Effort tracks success — sometimes true, usually false.
The winners deserve to be where they are — true if you believe in a just world, false otherwise.
Often, when people are discussing meritocracy and success, they are arguing about one of the first three models, but are actually driven by their belief in the fourth.
People’s beliefs about meritocracy involve their own personal metaphysics and teleology: why they are where they are, why some people are more rewarded by society than others, whether the world is fair, and whether outcomes are reflective of who you are and your own identity.
Ever since I was a child, the idea that people could rise to the top through their own efforts and talents in a Randian, heroic way was appealing. Even as an adult, it kind of is. I’ve always looked at successful people as a model and source of inspiration, and not a source of competition.
Here’s the thing. I don’t believe in that anymore. Meritocracy is only vageuly funcitonal for the 99+% of people who rely on selection and network effects to be allowed to create value. Meritocracy is about allocation mechanisms, not people.
Let me post the score. The heritability of personal income in a given year is 35-40%, and the heritability permanent income is 50-55%. That alone proves that a lot of variation in outcomes is a function of environmental factors.
If permanent income really was downstream of intrinsic qualities like personality or intelligence, you would expect the heritability to be much higher, closer to 75% (the heritability of both personality and IQ), but it isn’t. Mathematically, it works out like this1:
Now, let me try to explain why meritocracy doesn’t work for most people.
One obvious observation — meritocracy is a social. Whether some hermits are better at growing crops on their farm is just a question of who they are, and what the soil and climate allow for. So it doesn’t really make sense to say that growing food alone on an isolated farm is meritocratic, it just kind of is.
Inside a society, people can create value for other people, and then society rewards them for doing so. Market economies make this process decentralised, so that people can choose what they want to buy. There are ways people can cheat the system by engaging in endeavours that are effectively zero sum like high frequency trading, or by scamming people, but the fact of the matter is that the system just works.
Now here’s the thing. Equality of opportunity is a myth because it is impossible for everybody to be given a chance. People have to be selected into their jobs, and even at the top level, only so many people can be trusted with the resources: directing films, the capital to create companies, and positions in institutions. To allocate those resources, we have to select people.
“Does selection work?” — the boring answer is that does… sometimes.
Ivy league schools reject massive percentages of academically competent students in favour of ones with better athletic records or nonacademic ratings — the latter of which don’t predict anything in the real world. Still, on average, they are pretty good — the average IQ at an Ivy league university is 125. Traits people use to select employees — credentials, biographic details, and interviews — work better than random selection, but not much better.
There are a massive amount of venues less dependent on being selected by somebody else that people can funnel into: writing novels, streaming, video content, social media, art, producing music, game development, independent software, online commerce, coaching, or blogging. And it is possible to succeed here, entirely through your own intrinsic qualities.
The catch: it’s a lot harder to succeed and make a living doing this independent work because you have less leverage. Winner-take-all dynamics are big here. In terms of value, it’s a lot easier to make a great game if you have 100 M in funding and 100 employees than if you are an indie developer.
If we are talking about “merit”, we must talk about values. Some employees might ship good code, but they also might sabotage the workplace environment by being untrustworthy or difficult to work with; or they might be the complete opposite. Employers selecting for cooperative employees isn’t just emotional management, but also a legitimate way to increase productivity. And then, you could argue that the employees who provide non-productive assets to the company are more deserving of value.
It’s interesting that people complain about economies being too unequal, when it is more likely that businesses artificially compress wages by paying according to work experience + role. If they actually paid employees according to their output, then the variance in income would be much higher. And maybe it shouldn’t be — employees sell time, not output.
I believe real recognises real. That more competent people are more able to distinguish between the best and the worst. As such, I think that meritocracy as an ideal become truer the higher up the ladder you go. But sometimes I’m not even sure of that, even people like Tyler Cowen admit that they wouldn’t have been able to detect Shakespeare’s talent if they were presented with it.
People talking about the supposed incompetence of elites is… Interesting. Even as a skeptic of meritocracy, I think that blanket attitude is not warranted. It is the right approach when dealing with elites who selected into political professions, because they are selected for their popularity and likability — now even the masses are skeptical of those.
Outside of that, elites tend to be pretty competent. Miyazaki is good at making movies. Scott Alexander is good at writing. Faker is good at League of Legends.
Context:
I am trying to write an article on my main blog about what causes some people to be wealthier than others. It’s… hard.
If I say that it is a lot of little things — that wouldn’t be interesting because everybody kind of knows that already. Ideally, the model would reveal both descriptions and prescriptions, and it’s very difficult to build one that does both.
The other part is that I will inevitably have to discuss the idea of meritocracy, that the best naturally rise to the top. I think it’s an important idea, because it grounds all thinking about success. Why try if it really is just a game of luck? If you can just force your way to the top, then why not do it?
It’s also a difficult idea to falsify — if you point out that conscientiousness is not that correlated with success, you could argue those traits are overrated and that value is more of a function of talent.