Why Elites Fail

This article, Why Elites Fail, really, really rocked me back on my metaphorical heels. I've been thinking about it for days, and still haven't fully processed the implications.

For me, at least, this was a big deal.

That was an awesome read.

To have a meritocracy, to compare people on their merit alone, all else needs to be equal, otherwise it isn't about merit any more. Though I'm stating this too strictly, practically speaking the differences should lie in a fairly narrow band. This means that sometimes that means remedial action should be taken to catch some people up. At first glance this might run counter to the idea of a meritocracy as people are apparently rewarded for no reason, but it is required to maintain the equality.

I think you could use this as a starting point to argue for social security, progressive income taxes (including capital gains) and a few other 'communist' ideas.

*nod* This is exactly the kind of thing that makes us socialist types think that programs that redistribute wealth are so important. Power accumulates, whether it's economic, political, or whatever. Redistributing that wealth in the form of social programs decreases the slope of that power curve. It increases mobility by ensuring that the advantages of being on top are at least somewhat balanced by support provided to the bottom. Those who already have power have plenty of ways to ensure that their merit (and more importantly, the merit of their offspring) are polished and recognized. Those who do not have power need support to make sure that their merit is given a chance to grow, and that when it does someone sees it and pays attention to it.

If a system doesn't do something to reverse this normal accumulation of power, mobility decreases more and more, and the sense of economic injustice grows and grows. And that's a problem for a couple of reasons. One reason is simply that it's inefficient: you're wasting the talent of people simply because you don't invest enough in finding and developing that talent. So the talent goes to waste as they flip burgers or turn to crime or what have you. The second reason is that if that imbalance grows too high, it creates social unrest. When people see that it's possible to succeed given the right circumstances from any background in life, they feel hope. When they see that the only people who are getting ahead are the people who already have what they do not, they feel despair, and then anger.

And this also connects to the complaints people have about strong libertarian ideas about what a perfect government should be. We look at the proposed libertarian society and see nothing to curb this same slide towards oligarchy... and if there's absolutely nothing to prevent that, the expectation we have is that somebody at some point is going to begin collecting power of one sort or another (economic power is at least as dangerous as political power), and without anything to slow that down it will go very quickly. And then, things start looking a lot less like a libertarian utopia and a lot more like a feudal nightmare.

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Further note: Communism, as implemented in the Soviet Union, was strongly leveling in terms of economic power. It did not, however, prevent the collection of political power much at all. There are other dangers in leveling things out that much economically, but the most terrifying aspects of the Soviet Union's history come from the political side of things. And, of course, those with political power could get anything they wanted--they could ignore the economic rules that applied to other people.

In the United States, our system of government has done a reasonable job of preventing the consolidation of political power in the same way. However, it hasn't done as good a job at preventing economic power from pooling up. We've had a couple of major corrections along those lines--and major economic breakthroughs like the industrial revolution or the information revolution shook things up. But it feels now very much like enough economic power has collected to begin to let those who are economically powerful ignore the political rules that apply to other people.

There's no such thing as a perfect system--but a good system ought to work to prevent both of these things. There need to be mechanisms in place to prevent the over-concentration of either political or economic power. That doesn't mean that either one needs to be tightly controlled, just that there need to be checks and balances in all avenues of power to ensure a certain minimum level of fairness. Otherwise, you eventually end up with something that is an aristocracy in all but name.

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It's possible there'll be another major correction (think depression followed by new deal), or it's possible that the system will simply break. Optimally, I'd like to believe that we can find a way to add checks and balances for economic power that prevent this from becoming a cycle of "economic power builds up in the hands of the few, then the wheels come off and we institute rules to protect ourselves from that, only to later forget and get rid of the rules to let it happen again." Because that cycle kind of sucks.

Well, the thing is, if you want true mobility and true innovation I do (even as moderately fiscally conservative) believe that you need to have a sufficient safety net so that people CAN take risks, start a business, launch a product, etc and even if they fail not be destitute. There's a baseline of food, shelter, healthcare, education that needs to be established that should always be there.

As far as capital gains and inherited wealth, I think it's a bunch of bunk that if capital gains was taxed more that "investors would flee". As far as inheritance, I think there should be $0 tax on wealth up to $X and then 50% on anything over $X. You could set X at something pretty high too, it's the mega rich that you want to get. So when Sam Walton dies, his kids get the first $10 million free, and then 50% tax on the ... eh, $35 billion or so he has in wealth. They still get to be mega rich, no one is really harmed.

bandit0013 wrote:

So when Sam Walton dies, his kids get the first $10 million free, and then 50% tax on the ... eh, $35 billion or so he has in wealth. They still get to be mega rich, no one is really harmed.

Point of order, he did already. And his kids are sort of a classic example of this. When he stepped away from active leadership, that's when Wal-mart slid more towards abusive treatment of it's employees and such. (Well, except for the sexism thing. That's always been there, it's... well, not uncommon from where they all came from.). I have a hunch that without the weird credit bubbles and corporate cronyism, they'd not be doing a quarter as well.

I swear to God, I just had this conversation with my wife not 15 minutes ago.

We were watching Rock Center on NBC and there was this story about the explosion of multi-millionaires from Brazil buying vacation property in Florida like crazy. While not entirely related, it made me think back to the NPR story about Magnatar and how they scammed the sub prime mortgage system and made billions.

I've grown very weary of "elites" who make money on the backs of others. This parasitic economic system that exists to allow others to become rich beyond belief while standing on the carcasses of those who put them there sickens me. I wonder, if I didn't have a soul and didn't care how I did it or who I hurt if I could become a multi-millionaire.

Well a nice trend I see is that going public is becoming much less attractive than it used to be. I would much rather work for a company that is privately held since they wouldn't feel as much short term pressure. There are a lot of things in the system that reward questionable behavior.

Great post, Hypathian.

Malor, out of curiosity: how did you find the article? Like me, from clicking through on the 'Why Don't we Believe In Science?' article you started a thread on earlier?

More on topic: did it shift your views on affirmative action a bit?

It was posted on Metafilter. Didn't get a lot of comments there, seemed like most people barely noticed it.

And yes, it did shake me up quite severely on the affirmative action thing. I still think helping people because of their skin color is counterproductive, but the observation that you cannot rely on merit-based testing, when some parts of society have almost unlimited resources to throw into subverting those measurements, really knocked me for a loop.

That city school that's losing minorities instead of gaining them bothers me very, very much. And it's because it bothers me so much that I posted the link here, as I figured others should see it, too.

This line was the one that resonated most strongly for me:

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: “Who says meritocracy says oligarchy.”
Malor wrote:

It was posted on Metafilter. Didn't get a lot of comments there, seemed like most people barely noticed it.

Saw it there as well, and I was also surprised that it didn't get that many comments. I figured it was right up MeFi's alley.

Malor wrote:

And yes, it did shake me up quite severely on the affirmative action thing. I still think helping people because of their skin color is counterproductive, but the observation that you cannot rely on merit-based testing, when some parts of society have almost unlimited resources to throw into subverting those measurements, really knocked me for a loop.

I recently witnessed this first hand. I'm going back to school to do my MBA and one of the cornerstones for admissions if not the most important thing depending on school is your GMAT score. At first the amount of books/classes/tutoring etc that was available really didnt surprise me but at the same time was daunting. Personally I had some borrowed books but there was no way I had the time or money to be investing in that extra Unf that could get you over the top. What did really surprise me was when I talked to a friend who worked in the admissions office of one of the better schools in Canada. They pretty much told me that not to worry about writing the test multiple times as its very common and the last score is the one used irrespective to previous scores. The topper was that apparently some people would write the test 4-5+ times.

Really opened my eyes to the whole system. Here I was really worried if I didnt score well on my first test and had to rewrite that the first would be held against me. Nope... just make sure you have the time and money to brute force the thing. At $250 a test and a one month reset period plus all the outside help that's available it made it very apparent that people with money and especially time (as in they can treat their admissions as a full time job) really have a leg up on others.

Beautiful article. In many circles it's almost blasphemous to be against meritocracy, and this article makes a startlingly lucid case against it. Thank you for sharing this.

Seth wrote:

Beautiful article. In many circles it's almost blasphemous to be against meritocracy, and this article makes a startlingly lucid case against it. Thank you for sharing this.

Only when given a context in which there are significant differences that allow it to be subverted. I think that is an important qualifier. I think a meritocracy in itself is fine - and almost blasphemous to be against it - but it does require that all else is equal.

Lucan wrote:
Seth wrote:

Beautiful article. In many circles it's almost blasphemous to be against meritocracy, and this article makes a startlingly lucid case against it. Thank you for sharing this.

Only when given a context in which there are significant differences that allow it to be subverted. I think that is an important qualifier. I think a meritocracy in itself is fine - and almost blasphemous to be against it - but it does require that all else is equal.

Right, but this really makes it identical to all those other things that would work if only humans let it - communism, benevolent dictatorships, anarchy, etc.

Malor wrote:

And yes, it did shake me up quite severely on the affirmative action thing. I still think helping people because of their skin color is counterproductive, but the observation that you cannot rely on merit-based testing, when some parts of society have almost unlimited resources to throw into subverting those measurements, really knocked me for a loop.

That city school that's losing minorities instead of gaining them bothers me very, very much. And it's because it bothers me so much that I posted the link here, as I figured others should see it, too.

FWIW, the definition of 'minority' has been changing over the past several years. At least in the area of government grants which is where I work. The programs I work with have had their definition of minority changed:

The preferred nomenclature nowadays is 'underrepresented', which is meant to be more inclusive since ethnic minorities are not the only ones being excluded from alot of upwardly mobile opportunities. The definition now includes a wider spectrum of ethnicities as well as low income, handicapped and - in some cases - females.

I want to point out that this awesome article is an excerpt from an awesome-looking book called Twilight of the Elites. So if you were impressed by the article, you might want to grab the book, too.

I read another really interesting article (actually, scientific paper) recently that dovetails nicely with this one (warning, PDF):

Groups of diverse problem solvers can outperform groups of high-ability problem solvers

We find that when selecting a problem-solving team from a diverse population of intelligent agents, a team of randomly selected agents outperforms a team comprised of the best-performing agents.

So, they found that diversity trumps intelligence in group problem solving (in a computer simulation with various constraints). This suggests that even if meritocracy "worked"--even if it actually selected the most intelligent folks to be in charge--it still wouldn't be the best way to run a society. In fact, picking leaders at random would be better!

Of course, in the real world things are a lot more complicated than in a simulation. For example, even when diverse viewpoints manage to get a seat at the table, their ideas are often dismissed out of hand because they're too far "out of the mainstream". Still, it was fascinating to see that "increasing diversity" isn't just a touchy-feely liberal ideal about fairness, but is a concrete way to improve strict meritocracy.

Awesome article.

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.

A thousand times this. This is my biggest problem with libertarian principles in general, and why I think things like universal health care and accessible education are so important - you need these kinds of safety nets to allow equal opportunity to exist in a world of unequal outcomes. We can and should debate the amount of redistribution that happens to maximize the equal opportunity benefit, but I think it's important to acknowledge the fact that it should be a function of government.

Chris Hayes went to my high school!

. . . I'll read the rest of this article at some point.

I'm curious why the article is titled "Why Elites Fail" and the book it came from is called The Twilight of the Elites when nothing could be further than the truth.

The elites have the vast majority of wealth this nation produces and, thanks to Citizens United, they are now tightening their grip on politics and our government. I mean the only reason Newt Gingrich was able to stay in the primary as long as he did was that a single billionaire, the epitome of elite, backed him.

I mean short of the government dramatically reallocating wealth or a messy social revolution I don't see how this cycle is going to be broken.

OG_slinger wrote:

I'm curious why the article is titled "Why Elites Fail" and the book it came from is called The Twilight of the Elites when nothing could be further than the truth.

I think the idea is that the Elite isn't actually an elite when it's not made up of the people at the top of the pile of merit. That an Elite is no longer an Elite class when it's made up of someone of talent/merit and all their associated family and hangers on who got to be there by association.

Has anyone here read Larry Lessig's "Republic, Lost" http://www.amazon.com/Republic-Lost-...

It is a really awesome account of exactly how it is that those with economic power control politics and in turn rig the system in their favour and away from a level playing field. No unrelated I feel.

Excellent read with some great examples, not that it's particularly surprising to myself, or anyone of a Leftist bent, I suspect.

Malor wrote:

This line was the one that resonated most strongly for me:

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: “Who says meritocracy says oligarchy.”

Yeah, it's something I see every day in my society. The formerly disenfranchised have risen to political and economic dominance thanks to cronyism and favours, and are now manipulating those that support them under a 'democratic' guise to perpetuate the old systems to their own benefit.

It's depressing how every society and revolution becomes Animal Farm.

Every. Single. One.

And I'd like to +1 everything Hypatian has said.

MrDeVil909 wrote:

It's depressing how every society and revolution becomes Animal Farm.

Every. Single. One.

And I'd like to +1 everything Hypatian has said.

I would also +1 Hypatian, but I do have a question. Do we have any historians that could speak to longer lived, more ancient empires? I know Egypt's reign, for example, was so long and successful it absolutely dwarfs anything from the last thousand years. I know there were also very long lived and successful South American empires. Were those your basic divine-right-to-rule through harsh penalties built on slave labor? Or have we really not moved as far as we'd like to think in terms of progress?

Seth wrote:
MrDeVil909 wrote:

It's depressing how every society and revolution becomes Animal Farm.

Every. Single. One.

And I'd like to +1 everything Hypatian has said.

I would also +1 Hypatian, but I do have a question. Do we have any historians that could speak to longer lived, more ancient empires? I know Egypt's reign, for example, was so long and successful it absolutely dwarfs anything from the last thousand years. I know there were also very long lived and successful South American empires. Were those your basic divine-right-to-rule through harsh penalties built on slave labor? Or have we really not moved as far as we'd like to think in terms of progress?

More that we're looking at things from enough distance that drastic dynastic changes, invasions, and changes to the religious and political structure smooth out into a difficult to differentiate mass.

Yeah. Read through some of wikipedia's list of ancient Egyptian dynasties. There was a lot of stuff that went on, including periods of great upheaval and civil war. Unsurprisingly, there's a lot less information about those periods—they didn't build a lot of awesome monuments during those times.

Ahhh, the classic foible of ignorantly assuming that which one doesn't understand is monolithic. Yeah!

This excerpt really anchors the argument presented in that editorial:

A pure functioning meritocracy would produce a society with growing inequality, but that inequality would come along with a correlated increase in social mobility. As the educational system and business world got better and better at finding inherent merit wherever it lay, you would see the bright kids of the poor boosted to the upper echelons of society, with the untalented progeny of the best and brightest relegated to the bottom of the social pyramid where they belong.

But the Iron Law of Meritocracy makes a different prediction: that societies ordered around the meritocratic ideal will produce inequality without the attendant mobility. Indeed, over time, a society will become more unequal and less mobile as those who ascend its heights create means of preserving and defending their privilege and find ways to pass it on across generations. And this, as it turns out, is a pretty spot-on description of the trajectory of the American economy since the mid-1970s.

I bolded the most important part. That bold section is, in short, the alleged "American Dream," which no longer truly exists. It's also why our governmental and economic systems will inevitably fail if we don't drastically reform them.

The Chinese had some dynasties that lasted centuries. The longest is the Zhou which lasted ~800 years.

The Byzantine Empire arguably lasted ~1000 years.
The Assyrians lasted a while too.

Yeah, but those societies lasted that long because nothing ever changed. You don't have to be flexible when technology is moving so slowly that you'll be born and die in the same house, and never see a new technology in your entire life. Once you have a system that works, more or less, you can just keep doing that same thing over and over for centuries.

Doesn't work anymore.

Also, that's still a bit reductive. Read the wikipedia entry on the Zhou dynasty, and you'll see that during its stable-ish period (275 years from when it began to be established in 1046BCE to when the sh*t hit the fan in 770BCE) it was a de-centralized state in which there was in-fighting between neighboring states. In 770, the capital itself was sacked due to internal strife, and a new capital was established in the east. During the remaining period (514 years, from 770BCE to 256BCE) it was breaking up into smaller and smaller states.

Internal peace was not particularly rampant during any portion of this period.

In general, there was significant upheaval in pretty much any of these "empires" or "dynasties". The fact that we call these ancient nations the same name for their whole history doesn't mean that they were really the same nation ruled by the same people or the same rules. It means that they share certain common elements across that chunk of history, and at the end are broken by some even more dramatic change.

The Zhou dynasty entered decline in 770BCE, after the capitol was sacked. It didn't officially end until 256BCE when the last king of Zhou who claimed to be the King of China died, and none of his sons claimed the title. The next dynasty didn't begin until 221BCE when the ruler of one of the states that formed during the Warring States period during the Zhou dynasty's decline had conquered enough of the other states to declare himself Emperor.

Edit:

Oh, and it's also worthwhile to note that it's a little weird to try to contrast the idea that meritocracy tends to transform into oligarchy with the stability of ancient empires and dynasties. After all, these ancient states and empires were almost always [em]explicitly[/em] oligarchies of one sort or another.

The idea that every "common man" ought to be able to aspire to greatness is quite a bit more recent than that, probably dating to the Enlightenment, at least in Western thought. (There are some threads of it in how the bureaucracy worked in the Han dynasty, although civil servants still usually came from the privileged classes).

I do not think any nation was founded with that idea explicitly in mind before the United States of America, but I may be mistaken.

So this idea that everybody [em]ought[/em] to have a fair chance is pretty new. And that key idea makes it harder for those on the bottom to accept that they should stay there. They know that it doesn't have to be that way.