All animals are equal but some animals are more equal than others.
—George Orwell, Animal Farm
This book has challenged widely held assertions about meritocracy in America. According to the American ideology of meritocracy, individuals get out of the system what they put into it. The system is seen as fair because everyone is assumed to have an equal, or at least “fair,” chance of getting ahead. Getting ahead is ostensibly based on merit—on being made of the right stuff. Being made of the right stuff means being talented, working hard, having the right attitude, and playing by the rules. Anyone made of the right stuff can seemingly overcome any obstacle or adversity and achieve success. In America, the land of opportunity, the sky is presumed to be the limit: you can go as far as your individual talents and abilities can take you.
But merit is only part of the story. We have not suggested that merit itself is irrelevant or that merit has no effect on who ends up with what. We have suggested that, despite the pervasive rhetoric of meritocracy in America, merit is in reality only one factor among many that influence who ends up with what. Nonmerit factors are also at work. These nonmerit factors not only coexist with merit, blunting its effects, but also act to suppress merit, preventing individuals from realizing their full potential based on merit alone.
Chief among the nonmerit factors is inheritance, broadly defined as the effect of where one starts on where one finishes in the race to get ahead. If we had a true merit system, everyone would start in the same place. The reality, however, is that the race to get and stay ahead is more like a relay race in which we inherit our starting positions from our parents. The passing of the baton between generations profoundly influences life outcomes. Indeed, the most important factor in getting and staying ahead in America is where one starts in the first place. Most parents wish to maximize the futures of their children by providing them with every possible advantage. To the extent that parents are successful in transferring these advantages to their children, their children’s life outcomes are determined by inheritance and not merit.
Social capital (whom you know) and cultural capital (what you need to know to fit into the group) are also nonmerit factors that affect life outcomes. These factors, in turn, are related to inheritance. It helps to have friends in high places, and the higher up one starts in life, the greater the probability that one will travel in elite social circles. One must also have the cultural wherewithal to be fully accepted within these high-echelon social circles. Those who are born into these circles have a nonmerit cultural advantage over those not born into them, who have the difficult task of learning the ways of life of the group from the outside in.
We have shown that education is both a merit and a nonmerit factor. Education is widely perceived as the preeminent merit filter, sifting and sorting on the basis of demonstrated individual achievements. Although individuals “earn” diplomas, certificates, and degrees based on demonstrated individual competencies, the nurturing of individual potential and opportunities to earn these credentials are unequally distributed. Parental social class markedly affects the amount and quality of education children are likely to acquire.
We have also shown that luck plays a part in where people end up in the system. Being in the right place at the right time matters. Nonmerit factors such as the year one is born, the number and types of jobs available, where one lives, where one works, and the vicissitudes of domestic economic cycles and the global economy profoundly factor into individual life chances—above and beyond individual merit or the lack of it. The imperfections and ultimate uncertainty of both the stock market on Wall Street and the labor market on Main Street add an undeniable element of luck into the mix of who “wins” and who “loses.”
In many ways, the greatest expression of the ideals of rugged individualism, meritocracy, and the American Dream is starting your own business and becoming your own boss. We have seen, however, that rates of self-employment in the United States have fallen sharply. The dominance of increasingly large corporations and national chains has severely compromised the entrepreneurial path to upward mobility.
Finally, we have reviewed the avalanche of evidence demonstrating the continuing effects of discrimination on life chances. Discrimination is not just a nonmerit factor; it is the antithesis of merit. In a pure merit system, the only thing that would matter would be the ability to do the job—irrespective of any non-performance-related criteria. To the extent that non-performance criteria affect life outcomes, meritocracy does not exist. At the beginning of the twenty-first century, race and sex discrimination are clearly on the decline and certainly less blatant than during earlier periods, especially the first half of the twentieth century. Nevertheless, the lingering effects of past discrimination persist into the present, and although less visible and more subtle, its remaining, contemporary forms continue to be damaging. The “underground” nature of modern forms of discrimination makes them especially damaging because it has enabled the emergence of an aggressive and popular denial of the persistence of discrimination and its continuing damaging effects. In addition to race and sex discrimination, we have shown how ageism, heterosexism, religious bigotry, “lookism,” and discrimination against the disabled create differential access to opportunity and rewards that is quite independent of individual merit.
Americans desperately want to believe in the ultimate fairness of the system and its ability to deliver on its promises. To a great extent, this is the basis of the strength and durability of meritocratic notions and the American Dream. Opinion polls consistently show that Americans continue to embrace the American Dream. But as they strive to achieve it, they have found that it has become more difficult simply to keep up and make ends meet. Instead of “getting ahead,” Americans often find themselves working harder just to stay in place, and despite their best efforts, many find themselves “falling behind”—worse off than they were earlier in their lives or compared to their parents at similar points in their lives.
Over the past several decades, there has been growing economic inequality in America. Those at the top of the system, deriving most of their income from investments, have done very well. Average wage earners, on the other hand, have experienced flat or declining wages in what amounts to a long wage recession extending as far back as the 1970s. During this period, rates of upward mobility have slowed. In response to growing economic pressures and the lack of opportunity, Americans have resorted to a variety of coping strategies to try to make ends meet or at least maintain a lifestyle to which they have become accustomed. Among these strategies are having multiple family wage earners and fewer children, working more hours, delaying retirement, and borrowing more.
Between 1970 and 2010, the percentage of women aged sixteen and older in the labor force increased from 43 percent to 59 percent (U.S. Department of Labor 2011, 1, 8). There are many reasons for the dramatic increase in female labor-force participation, including declining fertility; increasing divorce rates; growth of the service sector, in which women have been historically overrepresented; increasing levels of educational attainment among women; and the changing role of women in society. Another generally acknowledged factor is that women work for the same reason men do: to make ends meet. As prices have increased and wages have remained stagnant, more women have been drawn into the labor force to help make ends meet. Besides a sharp rise in female labor-force participation, there has also been a sharp increase in dual-income families. Among all married couples, those in which both husband and wife work increased from 44 percent of married couples in 1967 to 55 percent of married couples in 2009 (U.S. Department of Labor 2011, 75). Couples in which only the husband worked represented only 18 percent in 2009 compared with 36 percent in 1967 (U.S. Department of Labor 2011, 75). Related to the increase in dual-income families, working wives’ contributions to median family income increased from 27 percent in 1970 to 37.1 percent in 2009 (U.S. Department of Labor 2011, 77). Having married couples both work as a strategy to offset increased costs of living, however, has an upper limit. That is, except in cases of bigamy, an already working husband or wife has only one spouse who can also enter the labor force.
The next line of defense would presumably be children, especially adult children working while going to school. This, too, is occurring as higher proportions of college students work while going to college and work longer hours. In 1970, among full-time college students, 33.8 percent were employed. By 2010, 40 percent of full-time college students were employed, representing an 18 percent increase over that period. Of full-time college students employed in 1970, 14 percent worked more than twenty hours per week, and 3.7 percent worked more than thirty-five hours per week. By 2010, 17 percent of employed full-time college students worked more than twenty hours, and 6 percent worked more than thirty-five hours (U.S. Department of Education 2012).
Another potential strategy to offset increased costs of living is to reduce family size. For whatever combination of reasons, it is clearly the case that American women have sharply reduced rates of fertility in the past half century. A standard measure of fertility is the total fertility rate (TFR), which is an estimate of the average number of children that would be born to a woman over her lifetime. This rate has fallen from an average of 3.7 children born to American women in a lifetime at the height of the baby boom in 1957 (U.S. Census Bureau 2005) to 2.08 by 2008 (U.S. Census Bureau 2012a, 68), which is close to the replacement threshold of 2.1 that would be required to maintain current population size over time. According to the demographic transition theory, as countries industrialize, rates of fertility are reduced primarily because the economic incentives for higher fertility are reduced. That is, in agrarian societies it makes sense to have large families in order to have more potential workers available to work on the family farm. But as societies shift to industrial economies, children become net economic liabilities instead of potential economic assets. In a reinforcing pattern, reduced fertility is also associated with increased labor-force participation among women. That is, as more women work outside the home, they tend to have fewer children, and as women have fewer children, they tend to increase their rates of labor-force participation.
While reduced fertility rates have many potential causes, demographers generally agree that economic factors are paramount. According to the U.S. Department of Agriculture (2012, 23), the estimated cost of raising one child to age eighteen without college in 2011 for middle-income husband-wife families was $234,900.[1] Adding the average cost of a four-year public college education for in-state residents in the 2011–2012 academic year of $68,544[2] (College Board 2012) brings the total tab per child to slightly over $303,444. The extent to which parents or potential parents limit fertility in the face of such large potential expenditures is unknown but no doubt factors into reproductive decisions. Nevertheless, reduced fertility as a strategy to reduce total household expenses also has upper limits. Obviously a woman cannot reduce her fertility below zero. As noted above, the U.S. TFR, now about replacement level, has in recent years flattened, suggesting that fertility levels are approaching a probable effective ceiling below which couples who want children are unwilling to go despite the costs.
Americans are working more. Between 1967 and 2010, the average number of annual hours worked per worker increased 5.8 percent from 1,716 hours to 1,815 (Mishel, Bivens, Gould, and Shierholz 2012, 179). The increase in the number of hours worked corresponds to the flat or declining wage income over the same period. This suggests that workers may be working more hours to offset losses in hourly wages or as a means to increase purchasing power in the absence of increases in wages. Working more outside the home, however, comes at a cost. Additional work-related costs such as transportation, child care, and clothing reduce net gains in discretionary income. Additional work hours also come at the cost of lost hours available for leisure, household maintenance, and time with children. New technologies such as iPhones, e-mail, and telecommuting are extending the reach of the employer outside the workplace—especially for mental labor—and further contributing to the blurring of public and private spheres. As with women working outside the home, increasing the number of hours worked per wage earner has upper limits.
Not only are Americans working more, but they are also working longer over a lifetime. Demographer Murray Gendall (2008) documents that rates of labor-force participation for Americans over sixty-five have sharply increased since the mid-1980s, especially for women. Between 1985 and 2007, Gendall shows that rates of labor-force participation increased among men aged sixty-five to sixty-nine (25 to 34 percent), seventy to seventy-four (15 to 21 percent), and seventy-five and older (7 to 10 percent).[3] Labor-force participation increased among women aged sixty to sixty-four (33 to 48 percent), sixty-five to sixty-nine (14 to 26 percent), seventy to seventy-four (8 to 14 percent), and seventy-five and older (2 to 5 percent). In addition, since 1994, a higher proportion of workers sixty-five or older are working full time. The proportion of all older male workers working full time increased for men aged sixty-five to sixty-nine (53 to 70 percent) and aged seventy and older (48 to 55 percent). The proportion of all older female workers working full time also increased for women aged sixty-five to sixty-nine (39 to 53 percent) and aged seventy and older (37 to 41 percent).
Moreover, these trends are likely to continue into the future. Another Bureau of Labor Statistics study (Toossi 2009) projects that labor-force participation rates for workers sixty-five to seventy-four will likely increase between 2008 and 2018 from 25.1 to 30.5 percent. Similarly, labor-force participation rates are projected to increase over the same period for workers seventy-five and older from 7.3 to 10.3 percent.
Working at older ages and working more at older ages are due in part to longer life expectancies. As Americans live and attend school longer, the proportion of their total life spans spent working will also need to increase to be equivalent to prior generations. Many older workers choose to work to stay active as long as they remain in good health. However, older workers are also postponing retirement for financial reasons, for example, as full Social Security benefits have been made available only at older ages and as employers have cut back on health-care and pension benefits to retirees (Gendall 2008; Toossi 2009). During the Great Recession, the value of retirement securities and home values plummeted, which also contributed to delayed plans for retirement, especially for the “threshold generation” of baby boomers fifty to sixty-four years of age otherwise approaching traditional retirement age (Wolff, Owens, and Burak 2012). During the Great Recession, half of individuals in this age group reported that they might need to delay retirement (Morin 2009). Delaying retirement obviously leads to the loss of potential leisure time. In addition, like other individual coping strategies, delaying retirement in order to make ends meet has its upper limits, since most older workers will eventually reach a point at which they are physically or cognitively unable to continue working.
Another strategy to make up for shortfalls in income is to go into debt (Massey 2007; Phillips 2008; Schor 1998; Sullivan, Warren, and Westbrook 2000; Warren and Warren Tyagi 2003; Wolff, Owens, and Burak 2012). During the long period of wage recession since the 1970s, Americans resorted to carrying record levels of debt. Household debt rose steadily into the beginning of the twenty-first century while savings rates steadily declined. More recently as a result of less credit availability, uncertainty about the future, and general belt-tightening associated with the Great Recession, household debt ticked down somewhat and savings rates have ticked up somewhat. Household debt as a percentage of disposable personal income more than doubled from 68 percent of disposable personal income in 1973 to a peak of 137.6 percent in 2007, then declining to 118.7 percent in 2011 (Mishel, Bivens, Gould, and Shierholz 2012, 404–5). Over roughly the same period, rates of personal savings sharply declined from 9.4 percent in 1970 to only 0.4 percent in 2005, then increased to 4.2 percent by 2011 (U.S. Department of Commerce 2012). Mounting debt without a reserve of savings ultimately leads to personal bankruptcy. In 2010 about seven in every one thousand adults declared personal bankruptcy, a rate over three times as high as in 1980 (Mishel, Bernstein, and Allegretto 2007, 275; Mishel, Bivens, Gould, and Shierholz 2012, 410). Despite the recent trend reversals, an overall pattern of high debt and low savings remains.
Job loss, divorce, or medical problems can trigger a free fall into debt that may ultimately lead to bankruptcy. Research has shown that these three factors combined account for 87 percent of the reasons for filing bankruptcy (Warren and Warren Tyagi 2003, 81). Bankruptcies steadily rose from the 1980s until 2005 when in an attempt to slow the rate of increase in bankruptcy filings, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act. This act created new stipulations making it much more expensive and difficult for Americans even to file for bankruptcy. Bankruptcy filings increased from slightly less than 400,000 in 1983 to over 2 million in 2005 (Wolff, Owens, and Burak 2012). Filings dipped sharply with the passage of the new law to about 600,000 in 2006 but have since sharply increased again to 1.6 million in 2010 (Wolff, Owens, and Burak 2012). The increased filing despite the new law is a reflection of the depth of loss of wealth and assets associated with the Great Recession.
In addition to bankruptcies, by late 2008 rates of both delinquent mortgage payments and mortgage foreclosures reached the highest levels since the Mortgage Bankers Association, a trade group, began collecting data in 1979 (Mortgage Bankers Association 2008). In 2010, close to four million households were under foreclosure, representing slightly more than 2 percent of all homeowners and the highest level in thirty years (Wolff, Owens, and Burak 2012). Millions more American families were at risk for losing their homes. By 2010, about one in five homeowners were “underwater”; that is, they had mortgages in excess of the market value of their homes (Wolff, Owens, and Burak 2012). Obviously, debt as a means of making ends meet has its upper limits, which appear to have been reached in the American economy as a whole. Overextended, in debt, and without much of a safety net of savings and increasingly subject to being outsourced or outmoded, life in the middle class for many Americans has become increasingly precarious.
In short, in response to increased financial insecurity of the past several decades, Americans who have fallen behind have resorted to a variety of strategies in attempts to cling to at least the outward appearance of maintaining a middle-class lifestyle and living out the American Dream: increasingly relying on multiple wage earners, having fewer children, working longer hours, delaying retirement, and going into greater debt. Each of these individual coping strategies, however, obviously has its upper limits, which are quickly being realized: there are only two spouses who can work, fertility cannot be reduced below zero, there are only twenty-four hours in a day, retirement cannot be postponed indefinitely, and a spiral of borrowing and spending eventually results in financial collapse.
These individual coping strategies, though responses to societal-level imperatives, will not, in themselves, change social institutions, larger organizational forms, or the ways that resources are distributed. In short, they will not change America’s social-class system, nor will they make America more equal, more meritocratic, or more just. Changes of this magnitude would require reductions in socially structured inequality, especially inequalities of wealth and power. How could such change be brought about? There are several policy options, all of which depend on the will of those in charge. In the final analysis, policy is determined by the outcome of political contests. These contests reflect competing visions regarding what kind of society people think we ought to have or what is desirable.
In the book The Spirit Level: Why Greater Equality Makes Societies Stronger (2009), epidemiologists Richard Wilkinson and Kate Pickett provide compelling cross-cultural evidence showing that countries with high levels of economic inequality are associated with a variety of what most would agree are undesirable outcomes such as poor physical health (including lower levels of life expectancy and higher rates of infant mortality), higher rates of stress and mental illness, higher rates of drug abuse, lower levels of overall childhood well-being (as well as higher rates of childhood obesity, lower levels of student math and literacy scores, and higher teenage rates of pregnancy), higher levels of violence (including homicide rates), higher rates of incarceration, and lower levels of social mobility.
Assuming that it is desirable to reduce levels of economic inequality and to make the system operate more like a meritocracy (an assumption we will examine at the end of this chapter), several policy options could be considered.
One way to reduce the gap between the top and the bottom of the system is to impose a more heavily progressive system of taxation on income, wealth, or both. Progressive taxes are those in which the tax rate increases as taxable income increases. In other words, progressive taxation operates on an ability-to-pay principle; that is, those who have higher incomes and can presumably afford to pay more get taxed at higher rates. Progressive taxation does not necessarily result in simple redistribution of income or wealth from the rich to the poor. Revenue from more progressive taxation, for instance, rather than funding transfer payments to lower-income individuals (e.g., welfare payments) could be invested in public projects in ways that would provide more equal access to education, health care, public transportation, and other critical services, thereby reducing the nonmerit effects of cumulative advantages in these areas that higher incomes and wealth provide. In this way, the gap in opportunities between the rich and the poor would be reduced, and a more level playing field could be established.
Progressive taxation in itself, however, does not increase the prospects for equality of opportunity. Indeed, if income and wealth were entirely accrued based on individual merit, and if there were no advantages in opportunity to achieve based on one’s current economic standing, then progressive taxation could create a disincentive for individuals to achieve. On the other hand, to the extent that income and wealth are acquired or augmented through nonmerit advantage, then the progressive taxation of such nonmerit advantage would help to establish more equality of opportunity.
Two types of taxes aimed specifically at nonmerit forms of wealth accumulation are estate taxes and gift taxes. These are aimed at nonmerit forms of wealth accumulation since recipients of such largess do not technically “earn” them in the marketplace based on their individual merit (although one may argue that recipients could potentially “earn” these forms of largess informally through demonstration of familial loyalty or friendship, by rendering services such as caring for elderly parents, or as a return for prior favors). Resistance to wealth taxation has most recently coalesced around the push to eliminate federal estate taxes, renamed the “death tax” by opponents, because they seem to tax the dead. Of course, it is not possible to tax the dead. Instead, the estate itself is taxed, and its inheritors receive the remainder.
Federal estate taxes were used in the latter part of the nineteenth century and first part of the twentieth century to offset war costs (Johnson and Eller 1998). The federal estate tax was first enacted in 1862 to help fund the Civil War and was subsequently repealed in 1871. Federal estate taxes were reestablished in 1878 to provide additional revenue to offset the costs of the Spanish-American War and were also subsequently repealed in 1902. The modern form of federal estate tax was reenacted in 1916 with the advent of World War I.
Exclusions have historically been generous, so only the very largest estates have been subject to the tax. As part of the American Taxpayer Relief Act signed into law on January 1, 2013, an exemption of $5.12 million for individuals and $10 million for couples receiving estates was established which will subsequently be indexed to inflation. That means that only individuals receiving inheritances of more than $5.12 million and for couples $10 million (easily less than 1 percent of all estates) will be subject to an inheritance tax over that amount at a rate of 40 percent. Assets left to a surviving spouse or charitable organizations are not generally subject to estate taxation. In addition, estate taxation can be avoided or drastically reduced through inter vivos giving and careful estate planning. States can also level estate taxes independent of federal estate tax, but only about 20 percent of all states have any estate tax, often with complicated provisions for exemptions and exclusions. In short, existing estate taxes are currently not large enough and do not affect enough of the total amount of wealth transferred intergenerationally to make much difference in reducing the nonmerit effects of inheritance on who gets what and how much. Higher estate taxes could potentially help to “reshuffle the deck” between generations to create more equal starting points by both reducing the total amount of inequality and providing more resources for the government to allocate in ways to create more opportunity for those who start further behind.
Estate taxes are only one way of taxing wealth. Tax on wealth could also be based on its possession (assets tax), its use (consumption tax), or its exchange (transfer tax) (cf. Wolff 2002). Those who oppose such taxes often label them “confiscatory” and argue that they discourage work, savings, and investment. Supply-side advocates argue that taxing wealth in any form discourages investments that would otherwise create more jobs and a “trickle-down” effect of wealth creation. They contend that excessive taxation of wealth encourages the wealthy to flee to other countries that tax wealth less, thereby depriving American society of investment and spending that the wealthy would otherwise provide. Supply-siders argue that the sum of individual decisions with regard to the stewardship of resources is collectively more productive, efficient, and efficacious than collective decisions that emerge from the political process. Those who advance this position tend to view inheritance as a natural rather than a civil right, which should not be limited or abridged by the state.
The argument in favor of progressive wealth taxation suggests that unchecked accumulation of wealth increases social inequality to an unacceptable level. According to this view, taxes should be based on an ability-to-pay principle, with the wealthiest being taxed the most. The case in favor of estate taxation argues that inheritance rights are not natural but civil rights granted by the state, which has the power to both regulate and tax wealth in all its forms. According to this view, the state is coheir to claims of private property, the individual accumulation of which was made possible, protected, and promoted by the state.
Many forms of taxes tend to be regressive; that is, lower-income groups pay more as a proportion of total income than higher-income groups. Two such forms of regressive taxation, for instance, are Social Security and Medicare (known as FICA taxes). Employees and employers pay a percentage of employee income into each program. Unlike the Medicare tax, the tax base for Social Security taxes is capped. In 2012, the cap for the Social Security tax was a taxable income of $113,700; that is, income over that amount was not subject to the Social Security tax. As taxable income exceeds $113,700, the percentage of income paid in Social Security tax goes down. Thus, the higher the income above $113,700, the more the tax is regressive. Social Security taxes are capped because Social Security benefits are also capped at a maximum amount.
To the extent that Medicare and Social Security benefits exceed that which individuals pay in over a lifetime, additional benefits received are being subsidized by the general revenue, mostly through contributions of current workers. That is, both low-income and high-income individuals are eligible for these benefits, regardless of need. One proposal for reform is to means test the benefits (as in the case of Medicaid), which would make them essentially “welfare” programs based on need rather than “entitlement” programs available to all regardless of need. That is, everyone would pay into the system as a kind of destitution insurance, available only if you became destitute. A concern, however, is that this would create a disincentive to save or be frugal into old age and that the recipients would be stigmatized for receiving such benefits. Another form of federal regressive tax is based on the source of income. Unearned income from capital gains (income gained from selling stock at a higher price than it was originally purchased) is taxed in the United States for most Americans at about half the rate of earned income from salary and wages. The top tax rate for wages and salaries is 35 percent, but for most Americans income from capital gains is taxed at only 15 percent. Under the new provisions of the American Taxpayer Relief Act signed into law by President Obama in January 2013, the top rate for capital gains increased somewhat to 20 percent for individuals with incomes exceeding $400,000 and for married couples with incomes exceeding $450,000, still well below the equivalent rates for earned income. That is, income from investments is taxed at a much lower rate than income from labor. The higher one’s total income, the more likely it is that a higher proportion of it comes from investments rather than wages or salary. This substantial difference in tax rates between earned and unearned income seems inconsistent with the work ethic associated with the American Dream. It is justified, however, on the assumption that capital gains taxes discourage investments, and investments stimulate the economy in ways that generate both jobs and total income. Increasingly, however, investments are used by companies to merge with other companies or invest in foreign markets, both of which typically result in loss of jobs and reductions of income for ordinary workers.
Like tax policy, government spending is determined by the outcome of political contests. And like tax policy, government spending has a major impact on both the extent of inequality and the prospects for mobility within society. As with all modern states, the United States has what economists refer to as a “mixed” economy. That is, part of the economy is produced by market forces, and part is administered by governments. There are no “pure” capitalist or socialist economies; instead, national economies are aligned on a continuum according to whether they are more or less capitalist (market driven) or socialist (government administered).
Even in highly capitalist societies such as the United States, segments of the economy are “set aside” from the marketplace because they are deemed either too important or too impractical to be left to the vicissitudes of market forces. One prominent example is public education. Public education is administered by governmental units (usually local municipalities or states). Public schools operate on essentially socialist principles; that is, they are not-for-sale, not-for-profit entities whose services are administered by government and are available to all citizens regardless of ability to pay. Since providing basic education to all of its citizens regardless of ability to pay is seen as in the public interest, this segment of the economy is set aside from the market. That is, in an ideal democracy in which everyone presumably has an equal say in what happens, it is in the best interest of society for citizens who are making decisions to make informed decisions. It is also seen as in the public interest to have a skilled labor force, which further justifies access to education regardless of the ability to pay. Likewise, it is considered in the interest of fostering democracy and an informed public to have access to information in the public domain. Most communities in the United States, for instance, have not-for-profit public libraries (as well as school libraries and government offices) in which individuals can “look it up” without payment or fees.
It is important to point out, however, that there are mixed entities even within education, such as private schools that are generally, but not always, not for profit, though they do operate on ability-to-pay principles, or public universities that are not for profit but are not available to all (most have competitive rather than open admissions policies) and not entirely free (although usually subsidized). Other sectors of the economy such as police and fire protection, waste disposal, public parks, and so on are similarly set aside from the market. And still others operate on modified market principles, such as for-profit utility companies, which typically operate as government-sanctioned but regulated monopolies, or private defense contractors, which often have no competitors (e.g., only the Electric Boat company builds submarines for the U.S. Navy) or operate for security reasons on no-bid, cost-plus contracts.
Economies vary, then, by the extent to which, and the reasons that, segments of them are, for various reasons, set aside from market forces. These are ultimately political decisions regarding what aspects of an economy should be set aside from the market and to what extent. In Western European democracies (especially the Nordic states), for instance, a much greater portion of their economies are set aside from market forces compared to the United States. In most Western European democracies, medical care and public transportation, for instance, are heavily subsidized. Other segments of the economy may also be, to varying degrees, wholly or partially government administered such as energy and munitions. Among advanced industrialized democracies, the United States until recently was unique in not having some form of government-guaranteed health care. With the passage of the Affordable Health Care Act in 2010, a step was made in that direction with a model for government-guaranteed access to health insurance for most Americans but one that is still mostly market driven and organized through private insurance companies. The passage of this act was intensely contested not only in its particulars but in the role of government in providing access to health care and essentially to what extent, if any, health care should be set aside from ability-to-pay market principles.
There are a variety of ways in which government spending could result in a society that operates on more strictly meritocratic principles. To the extent that access to opportunity to achieve is based on ability to pay, meritocracy is compromised. The most obvious case is education. As we noted in chapter 5, to the extent that access to opportunity is mediated through education, and to the extent that educational opportunities are unequally distributed, meritocracy is compromised. More centralized funding and standards of quality for public schools set by states and the federal government instead of local governments could reduce inequities in educational opportunity. To the extent that government-funded schools were as “good” as private alternatives, the incentive for private retreats from the public school system would be reduced. However, there is great resistance to such proposals because parents want to retain “local control of local schools,” and wealthier families often have a vested interest in retaining the advantage of “better” schools located in “better” neighborhoods.
Government could also extend “free” public education beyond secondary schools to include university and professional education. Likewise, opportunities for vocational or trade schools could be publicly funded. The government could also more aggressively fund preschool and after-school programs aimed at making up cultural or social capital deficits among low-income or at-risk children. All of these measures would reduce the nonmerit access to opportunity predicated on ability to pay and thereby foster a more genuinely meritocratic society.
Beyond education, government could provide or improve infrastructure (roads, bridges, sewer and water supply, electrical grids, telecommunication systems, airports, and so on) and other basic services such as health care available to the general public. This would reduce the expenses of lower-income groups in particular who would otherwise have to expend limited resources to gain market access to such services and would detract time and resources that could be directed toward investment in their own human-capital potential. This principle is illustrated by Abraham Maslow’s well-known “hierarchy-of-needs” concept. According to Maslow, individuals have a hierarchy of needs that begins with basic subsistence such as food, clothing, and shelter. Maslow further notes that individuals cannot attend to higher-order needs, much less “self-actualization,” the highest-order need, until the more basic needs are met. Poor people are essentially “stuck” at lower-order needs and are therefore at a personal-development disadvantage regardless of their individual capacities or potential. Government could intervene in the market by providing such critical basic needs, which would allow lower-income groups to compete with others based more on individual capacities than individual circumstance.
While some forms of government spending could promote meritocracy, other forms violate meritocratic principles. A purely meritocratic society would operate on strict survival-of-the-fittest social Darwinist principles. In such a society, individuals who, for whatever reasons, were “unfit” would not get ahead and in many cases would not even survive. Children, the disabled, the infirm, the elderly, and others with no viable means of support would be on their own. Most modern industrial countries, however, furnish some form of “safety net” to provide for the basic necessities of citizens if they cannot provide for themselves. Such individuals are often referred to as “the deserving poor” since their inability to provide for themselves is beyond their control.
What about individuals who are willing and able to work but are poor nevertheless because they do not have jobs or do not have jobs that provide a living wage? Individuals may be unemployed or underemployed because they are less fit than others (assuming that “fitness” can be determined), or they may be unemployed or underemployed simply as the result of market forces. If the market itself does not provide enough jobs that pay at least a subsistence wage for all those who are able and willing to work, governments could intervene in the market by providing direct financial assistance to such individuals or by becoming “the employer of last resort,” putting people to work, presumably on public works projects that could benefit society as a whole.
Government’s spending is limited by the amount of revenue it can raise or borrow. In this way, government tax and spending policies are inextricably linked. How government revenue is expended affects both the extent of inequality in society and prospects for mobility. In general, societies with more progressive tax systems, along with more extensive welfare programs, have lower levels of inequality and higher rates of social mobility, while those with more regressive tax systems, along with less extensive welfare programs, have higher levels of inequality and less social mobility (Dreier 2007).
Discrimination remains a major source of nonmerit inequality. For America to extend true equality of opportunity to all, discrimination would have to be eliminated, or at least significantly reduced. Several specific reform strategies could be pursued to this end. Antidiscrimination laws could be strengthened and more effectively enforced. Additional resources could be made available for individuals to pursue complaints. Punishments for demonstrated acts of discrimination could be made more certain and consequential. Beyond mere passive nondiscrimination, more proactive measures designed to reduce the effects of past discrimination and prevent future discrimination could be more aggressively pursued. Such proactive measures generally fall under the label of what has become known as affirmative action.
Like antidiscrimination laws, the goal of affirmative action policies is to make equal opportunity a reality for members of groups that have historically been the objects of discrimination. Unlike antidiscrimination laws, which provide remedies to which individuals can appeal after they have suffered discrimination, affirmative action policies aim to keep discrimination from occurring and compensate for injustices incurred in the past. Affirmative action can prevent discrimination by replacing practices that are discriminatory, either by intent or default, with practices that safeguard against discrimination. Rather than a single policy that involves the same procedures, affirmative action comprises a complex set of policies and practices, including admission standards for schools and universities, guidelines for hiring practices, and procedures for the granting of government contracts. Affirmative action grew out of civil rights laws, presidential executive orders, court cases, federal implementation efforts, and voluntary human resource practices implemented by employers. Each has its own characteristics and complex history (Reskin 1998; Waters 2012).
In a series of affirmative action cases, the U.S. Supreme Court has progressively limited affirmative action policies and practices. The most extreme and controversial form of affirmative action, using quotas or set-asides as a means to increase diversity in schools and workplaces, was ruled unconstitutional in 1978 by the U.S. Supreme Court in the landmark Regents of the University of California v. Bakke case regarding admission practices at the UC Davis Medical School. Quotas or set-asides were in practice rarely used. More typically, affirmative action programs have sought to promote efforts to include members of groups that have been historically excluded from consideration for school admissions, jobs, and promotions. With such efforts, there are no requirements or quotas to hire members of certain “protected classes” or disadvantaged groups. Instead, in the context of proactive affirmative action, efforts are made to make the admission, hiring, or promotion processes as open as possible to encourage members of disadvantaged groups to apply. For instance, many jobs were formerly filled without public advertisement through word-of-mouth networks, which favor the already privileged and reproduce the demographic and social profile of existing occupants of such positions (social capital). To counter these exclusionary tendencies, the Equal Employment Opportunity Commission put requirements in place for some jobs that job notices be posted in widely publicly accessible outlets before positions can be filled. Job listings may specifically invite members of disadvantaged groups to apply (using language such as “women and minorities are encouraged to apply”), and other extra recruitment efforts (e.g., advertising in outlets targeted to such groups) may be used to encourage such applicants to apply. Human resources departments may demographically analyze applicant pools to ensure that female and minority representation in those pools is reasonably in proportion to the pool of potential applicants in the local or general population. Once such pools are established, hiring decisions are then based exclusively on merit. If a nonminority is recommended for hire in a unit or organization in which minorities are proportionally underrepresented, under affirmative action policies, hiring agents may be required to indicate how that candidate’s qualifications are superior to the highest-ranked minority candidate in the pool.
In 2003, in an important test case involving admission procedures in use at the University of Michigan, the U.S. Supreme Court reasserted the ban against quotas but condoned the use of race as a factor in admission decisions. Specifically, race may be used to pursue a legitimate institutional goal of diversity of access, not in any across-the-board fashion but in conjunction with other factors. That is, race can be one consideration for admission to promote diverse student populations but cannot be used as the single determinative factor. All of these efforts are intended to ensure that members of formerly excluded groups are given full consideration for educational and occupational positions, but there is no requirement to hire and no quota to fill.
Opponents of affirmative action argue that such programs constitute “reverse discrimination.” Affirmative action has been characterized as a set of highly discriminatory policies and practices in hiring and promotion decisions, resulting in the selection of less-qualified minorities over more-qualified white males. Empirical evidence, however, shows that there is not now nor has there ever been a widespread pattern of reverse discrimination and that white males continue to be advantaged in gaining access to most good jobs (Stainback and Tomaskovic-Devey 2012).
Such reverse discrimination, if and when it occurs, does indeed violate strict meritocratic principles. In order to have a strictly meritocratic society, all forms of discrimination and nonmerit preference “reversal” would need to be eliminated. In addition to those forms discussed above, for instance, commonly used nonmerit preferences for such categories as seniority, legacy status, or veteran preference would also be disallowed. Preference based on seniority is not in itself a measure of merit, although organizations may consider such privileges of rank as reward for prior service. Similarly, legacy preference in admissions often used in elite universities (preference given to those whose relatives previously attended) is nonmerit based and indeed tends to reproduce existing social and demographic profiles. Although a grateful nation may want to extend preference in hiring to veterans for prior service rendered, veteran status in itself does not qualify as a merit consideration.
Although Americans are generally in favor of the ideal of equality of opportunity, they are often opposed to affirmative action attempts to achieve that outcome. The objection is not so much against affirmative action in principle but against specific provisions of some forms of affirmative action, especially those that target minorities and women. As a result, race- or sex-based affirmative action programs are a “hard sell” to the American public, especially during periods of economic slowdown or decline (Wilson 1987; Conley 1999). This is further complicated in the case of race-based programs by increasing rates of racial intermarriage, increasingly blurred racial boundaries, and increasing multiracial identities (Winant 2012). One potential for reform, then, is to develop affirmative action programs for the economically underprivileged, regardless of race or sex. Such an essentially class-based affirmative action program may be more politically palatable and overcome many of the objections related to charges of reverse discrimination. An economically means-tested affirmative action policy using net worth as a criterion of eligibility would promote asset accumulation, which would clearly improve children’s chances for educational and occupational success, as well as for intergenerational wealth transfers, which we have argued provide a nonmerit basis for opportunity. Racial minorities, disproportionately represented among the economically underprivileged, would therefore disproportionately, but not exclusively, benefit from such arrangements. Such programs, however, would not fully take into account the uniquely damaging effects of the cumulative combination of class and racial disadvantage.
To lack capital in a capitalist society is to be at a distinct economic and social disadvantage. As we have seen, compared to income inequality, the extent of wealth inequality in the United States is much greater, involves much higher total sums, persists much more both intra- and intergenerationally, and is ultimately more consequential for economic well-being. Because so much wealth is transferred intergenerationally either through bequests or inter vivos gifts, the distribution of wealth in American society compared to income is also much more related to inheritance and much less related to merit.
Sociologists Dalton Conley (1999) and Thomas Shapiro (2004) have presented persuasive evidence that the basic and persisting economic problem for minorities especially is their continuing inability to accumulate wealth. They point out that African Americans may have improving educational and occupational opportunities but have not made much economic progress because at every educational, income, and occupational level, they have fewer assets than white Americans. And, as we have seen, those gaps have increased in the wake of the Great Recession. As Shapiro puts it, “Family wealth and inheritance cancel gains in classrooms, workplaces, and paychecks, worsening racial equality” (2004, 183).
Asset-building policies, such as government assistance for home purchases or starting and expanding businesses as well as tax incentives targeted at those of modest means to encourage savings and investments, could help stimulate wealth creation. Shapiro, for instance, proposes government-subsidized children’s savings accounts, individual-development accounts, and down-payment accounts as means to build assets for low-income populations. Shapiro proposes the establishment of an initial $1,000 savings account for every child born in the United States provided by government funds. Additional payments into these accounts by families could be matched by government funds. Account holders could use accumulated funds to defray college costs, make down payments for first-time home buyers, start businesses, or, if still active, supplement retirement or pass on to the next generation. Similar accounts could be set up for low-income adults as individual-development accounts aided by tax credits or matching public or private funds. Shapiro further suggests programs to stimulate home ownership, the major form of wealth equity for most Americans. For asset-poor families, savings from tax credits on rate payments could be set aside along with personal savings to be used for down payments for first-time home buyers.
Shapiro notes that such government-sponsored programs would be available to all Americans but would disproportionately benefit minorities, who are currently disproportionately asset poor. Shapiro notes that government-sponsored policies that stimulate asset accumulation for asset building are not new. He points to policies and programs such as the Homestead Act, the GI Bill and Veterans Administration home loans, mortgage deductions, tax deductions for IRA accounts, and other policies that previously helped middle-class families accumulate assets but were largely unavailable to the poor and especially poor minorities. Finally, Shapiro notes that such asset-building initiatives are helping to build up the idea of a “stakeholder society” in which individuals and families feel economically vested in all aspects of society. For instance, research shows that families with more assets also have greater marital stability, less domestic abuse, and better school performance for children.
Asset-building programs could therefore be seen as investments in the future that could in the long run realize net savings to society as a whole by avoiding costs associated with a variety of social problems now closely linked to poverty. As with other government-sponsored programs, however, funding would need to come from public sources, and resistance to such support is likely. Alternatively, funds for such programs could also come from private philanthropic sources, to which we now turn our attention.
Noblesse oblige has its roots in feudal Europe, where it referred to the sense of obligation that the nobility had toward the peasantry. The difference between slave societies and estate societies is that slaves had no rights, but peasants did. Although the peasantry did not own land in its own name and had to forfeit to the nobility all but a meager portion of their crops, the nobility, in exchange for the loyalty of its subjects, was expected to provide the peasants with land to work, protection from thieves and invaders, and occasional collective celebrations, especially at harvest. These expectations were implicit rather than explicit—a set of moral obligations embedded in the culture of the group. These felt obligations of the rich toward the poor became known as noblesse oblige, a term that has its modern-day equivalent in the view that “to whom much is given, much is expected.”
In modern times, noblesse oblige essentially means a combination of philanthropy and a desire to “give something back” through public service or service to humanity. Both philanthropy and progressive taxation are possible ways to reduce levels of inequality and restore more equity to the system, that is, to reduce the nonmerit effects of inheritance across generations. The primary difference between the two is that the former is voluntary, and those who benefit are selected by the giver, whereas the latter is nonvoluntary, and the objects of beneficence are not chosen by the giver. Through charitable giving, the wealthy can control who receives their largesse, the purposes for which they might receive it, the amounts given, and the pace at which amounts are given.
Conservatives tend to favor this type of giving. The control that it affords can be seen as an extension of individual property rights—the right to dispose of one’s property as one sees fit. Private donations at the local level as a means of addressing social problems are preferred by conservatives to public taxation at the national level. President George Herbert Walker Bush, for instance, emphasized the importance of an array of private charitable organizations, which he characterized as “a thousand points of light,” as the preferred alternative to government programs. Later, his son, President George Walker Bush, emphasized faith-based organizations, in particular, as means to address social needs in the community.
Liberals, on the other hand, are less inclined to rely on private charities to address social needs. They contend that much of this “charity” is directed toward the rich themselves in the form of support for the arts and “highbrow” culture, exclusive boarding school and Ivy League alma maters, and other upper-class institutions, thereby extending rather than reducing the degree of inequality. Liberals further contend that the piecemeal approach of local charities is woefully inadequate to deal with large-scale systemic problems affecting the nation as a whole.
Compared to other industrialized nations, Americans are relatively generous in donating money to charitable causes (Brooks 2005). Almost nine out of ten Americans report making contributions to charity, and this level of giving appears steady overtime (Hodgkinson 2004, 259). In 2009, for instance, Americans gave $303.8 billion to charities, with 75 percent coming from individuals and the remainder from foundations (13 percent), charitable bequests (8 percent), and corporations (5 percent) (U.S. Census Bureau 2012b). Among funds allocated, religious causes received 50 percent, education 20 percent, human services 4 percent, public/societal benefits 11 percent, health 11 percent, arts and culture 6 percent, international charities 4 percent, and environmental projects 3 percent (U.S. Census Bureau 2012b).
It is difficult to assess the total impact of such giving on assisting the poorest segments of society, reducing inequality, and increasing the prospects for equality of opportunity. Many charitable dollars are given to very worthy causes but are not targeted to the poor. For instance, the vast portion of donations to religious organizations—by far the largest recipient of charitable funds—goes to support the internal operations of such organizations. Religious groups vary in the degree to which their resources are otherwise directed toward social services and “outreach” ministries, with traditional conservative churches and denominations providing the least and more liberal churches and denominations the most (Hall 2005).
Despite the apprehensions of liberals, at least some of this largesse eventually makes its way to the truly needy. Robber barons of the Gilded Age, feeling pressure to justify growing accumulations of wealth, extended charitable giving to the poor to the national level, often creating charitable foundations in their names dedicated to helping those less fortunate than themselves. More recently, billionaires Bill Gates (Microsoft), Warren Buffett (Berkshire Hathway), and Mark Zuckerberg (Facebook) have pledged to eventually give the bulk of their fortunes to charity. However, with some such notable exceptions, there appears to have been a general historical decline in the ethos of noblesse oblige among those who have amassed new fortunes since the end of World War II (Hall and Marcus 1998).
We argue that diversity of access to opportunity is a legitimate institutional goal. Thus, if philanthropy is directed to the poor in significant amounts, then it does have at least the potential to reduce both the distance from the top to the bottom and the nonmerit advantages of inheritance. For instance, if those who inherit great fortunes were to feel greater social pressure to voluntarily donate large amounts of those fortunes in ways that increased opportunity for the less fortunate (not direct transfers or handouts), then such philanthropy would indeed produce such effects. One potential “solution” to the problem of inequality, then, is to encourage a greater sense of noblesse oblige among the wealthy in ways that would help level the playing field (e.g., providing scholarships to needy students), simultaneously increasing the potential for meritocracy while decreasing the nonmerit intergenerational advantages of inheritance.
The United States has a long and noteworthy history of social reform movements. The country itself was born in “revolution” as a movement against a dominant colonial power. Since then, other reform movements have helped to bring about more equality of opportunity, including the labor movement of the 1930s, the civil rights movement, the women’s liberation movement, and the gay liberation movement. Each of these movements, with varying degrees of success, has reduced discrimination and exclusion and has made the system more meritocratic than it was previously. Reform movements tend to draw their power from a combination of withholding services (e.g., strikes or boycotts) and mobilizing voting support for their cause (Piven 2008).
While minority movements in the United States have been ascendant in the past several decades, the labor movement has been in decline. Union membership as a proportion of the labor force has fallen off sharply from a high of 35 percent during the mid-1950s to 11.3 percent in 2012, representing a ninety-seven-year low (Greenhouse 2013). This is significant because the labor movement has been responsible for a variety of reforms that have reduced inequality and enhanced the quality of life for workers that we now take for granted, such as the eight-hour workday, the two-day weekend, paid holidays, minimum wage, and restrictions on child labor. During the height of industrialization in America in the middle of the twentieth century, labor unions in the United States helped check the power of corporations over workers in what was sometimes described as a “countervailing” force. Without strong worker unions, it is much easier for employing organizations to “divide and conquer” individual workers and take a larger portion of productivity in the form of profits, dividends, and management salaries. Several factors have accelerated the decline of unions in the United States, especially deindustrialization and globalization. In the United States, unions have not represented workers as a whole as much as workers in specific industries and trades. The most heavily unionized segment of the labor force was manufacturing, and as manufacturing declined, so did unions. Globalization also has weakened unions, giving corporations alternative sources of cheap and unorganized labor overseas. Finally, corporations have aggressively resisted unions, forcing concessions and givebacks and systematically discouraging the formation of unions in the workplace. More recently, unions have increased representation in arenas of the labor force not traditionally highly unionized, such as public workers and service workers. Public-sector workers, for instance, now have a rate of union membership (35.9 percent) more than five times higher than that of private-sector workers (6.6 percent) (Greenhouse 2013). However, it is illegal for most public workers to strike, and the right of public unions even to collectively bargain has been challenged and is an especially contentious issue.
Reversing the decline of unions and restoring more balance to management–labor negotiations could potentially help to make the system more equal and more equitable than it is. Another version of strengthening the relative power of workers is to establish more worker owned and controlled businesses. This is a challenge since most unions and workers do not have the resources to buy businesses outright; indeed, most employee-owned business are acquired as high-risk rescues when businesses are failing and workers would otherwise lose their jobs. Unions could also be strengthened by organizing across industries and work settings and contributing to global rules and guidelines for fair labor and market practices.
Other social movements in America have confronted issues of race, gender, and sexual orientation with varying degrees of success. While not fully resolved, they are nevertheless on the political radar screen and are now part of the mainstream political discourse. The primary justification for reform that gives these movements both their energy and their moral purpose is that discrimination unrelated to ability to do the job violates deeply held American values of fair play, equality of opportunity, and meritocracy.
What has not been fully confronted as yet and has not generally been part of mainstream political discourse is the issue of class. Whether the inherent contradiction between inheritance and meritocracy can be addressed politically in America through a people’s reform movement remains to be seen. America appeared to be on the edge of directly confronting class issues during the buildup to the Great Depression, but ameliorative reforms of the New Deal era seemed to ease these concerns. As with the Great Depression, the Great Recession reached deeply into the middle class, and class issues began to surface. This was most evident with the rise of the Occupy Wall Street (OWS) movement. Starting in September 2011, protesters convened in Zuccotti Park located in the Wall Street financial district, drawing attention to economic inequality and specifically banks and investors that had triggered the recession. The OWS slogan, “We are the 99 percent,” referred to the top 1 percent of the population in which wealth is highly concentrated compared to everyone else. OWS groups sprung up in many other cities in the United States and around the world. The initial occupation of Zuccotti Park ended in December 2011 when the New York City Police forced occupiers to leave the park, presumably because of health and sanitation concerns. The movement itself has been intentionally nonhierarchal, depriving the movement of formal leadership and hindering its long-term effectiveness. Since the closing of the park, the movement has dissipated, and it remains to be seen if it can be sustained. It did have the effect, however, of bringing national attention to class issues in a public forum. If inequality continues to increase, a crisis of legitimacy could spark new class movements and create additional grassroots pressure for reform.
In addition to the options discussed above as possible ways to decrease inequality in general and create more equitable conditions in society, other reforms in the organization of economic and political institutions themselves might also be considered. Corporations could be reformed in such a way to make them more publically accountable and more socially responsible. This could include changes in corporate governance that foster greater public transparency, accountability, and inclusiveness; more aggressive antitrust enforcement; more scrutiny of foreign investments; more oversight of public health and safety issues and the long-term integrity of the environment; and greater restrictions on risk taking where the public interest or tax dollars are involved. Political institutions could also be reformed in ways that would make them more genuinely democratic. Chief among such reforms would be reducing the influence of money in politics. Measures could also be taken to make elections more genuinely competitive by eliminating political gerrymandering and by making it easier rather than harder to vote. The intent of such reforms would be to make economic and political institutions more responsive to the general public and less captive to the narrow interests of the wealthiest segments of society.
For all the reasons discussed in this book, true equality of opportunity is highly unlikely. The system, however, could be made much fairer, much more open, and much more meritocratic than it is. Most Americans, sometimes grudgingly, acknowledge that because of discrimination on the bases of sex, race, creed, or other characteristics irrelevant to individual ability, the system has not always been entirely fair or just. The assumption is, however, that these forms of discrimination are rapidly being eliminated and that their ultimate elimination will finally bring about true equality of opportunity. But, as we have demonstrated in this book, even if all such forms of discrimination and their residual effects were somehow miraculously eliminated, we would still not have genuine equality of opportunity or a system entirely based on merit. Other nonmerit factors, including inheritance and patterns of social and economic organization that are external yet constraining to individuals, operate to modify and reduce the effects of individual merit on life chances.
In the abstract at least, Americans enthusiastically embrace the principle of proportional contribution; that is, one should get out of the system what one puts into it. According to this formulation, individuals should have an equal opportunity to get ahead, and getting ahead should be exclusively based on individual merit. But what does this mean in practice? As political scientist Richard Longoria has pointed out,
As long as the family and class background have an influence on a person’s outcome, the distribution of social goods are not distributed entirely on merit. In its ideal, it is only after these factors are eliminated that the distribution of goods and positions can be based on merit. In short, the correlation between one’s social origins and one’s outcome in life is zero in a meritocracy. (2009, 4)
In a purely meritocratic system, therefore, parents would not be able to engage in any practice that would give advantage to any of their children not available to all others. Parents, for instance, could not use their personal resources to send children to private schools, take children on vacations that may have educational benefit, pay for private tutors, or rescue children who falter because of their own incompetence or inadequacies. Parents would not be permitted to bequeath an inheritance to children or indeed to provide them with any resource not equally available to all other children. As political philosopher Adam Swift (2005, 269) has pointed out, perhaps this could only be accomplished through the establishment of universal state-sponsored orphanages that all children would be required to attend. Since it is unlikely that parents would voluntarily surrender their children to such institutions or submit to restrictions that would prevent them from naturally trying to do everything they could to provide their children with every assistance possible, it is unlikely that a pure merit system could ever be established. And herein lies the great American contradiction. Americans desperately want to believe that the system is fair and that everyone has an equal chance to get ahead. At the same time, we also emphatically endorse the right of individuals, with minimal state intervention, to dispose freely of their property as they personally see fit. But we simply cannot have it both ways. Inheritance and meritocracy are zero-sum principles of distribution; the more there is of one, the less there is of the other.
Furthermore, for a truly meritocratic system to operate, the influence of all other nonmerit factors identified in previous chapters would also need to be reduced to zero, including luck. To the extent that valued resources are distributed by random chance, they are not distributed by merit. As we have seen, luck comes in many forms, including being in the right place at the right time. As Swift correctly points out, “Taking equality of opportunity seriously means that people should not have better or worse prospects in life than one another because of things for which they are not responsible” (2005, 263). Luck could also refer to the genetic dice roll that provides individuals with whatever innate capacities they have over which they have no personal control. Even allowing genetic endowment as part of “merit,” the extent to which forces beyond one’s control influence life outcomes is substantial. While genuine equality of opportunity and achievement based only on merit are probably not possible, what is less well acknowledged by both the Left and the Right is that they may be neither entirely just nor desirable. British sociologist Michael Young, in his fictional satire The Rise of the Meritocracy (1961), envisions a society based truly on merit. In this futuristic society, individuals are assigned their place in society exclusively based on a system of rigid tests. Those who score highest on the tests fill the most important positions and get the most rewards. A strict hierarchy of merit is created and maintained. What at first seems like an eminently fair and just system in practice degenerates into a ruthless regime. The meritocratic elite feels righteously superior to all those below it and holds those at the bottom of the system in utter contempt. The meritocratic elite, secure in its lofty status, exercises complete and total domination of society. Those at the bottom of the system are incapable of challenging the elite and are permanently deprived of the capacity to rise up against their oppressors.
One possible advantage of a nonmeritocratic society is that at any time, for whatever combination of reasons, at least some of those at the top of the system are less capable and competent than at least some of those at the bottom. Such discrepancies should inspire humility in those at the top and hope and dignity in those at the bottom. But this can only happen if it is widely acknowledged that inheritance, luck, and a variety of other circumstances beyond the merit of individuals are important in affecting where one ends up in the system. This is why the myth of meritocracy is harmful: it provides an incomplete explanation for success and failure, mistakenly exalting the rich and unjustly condemning the poor. We may always have the rich and the poor among us, but we need neither exalt the former nor condemn the latter.
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