This week, we share two posts discussing The Meritocracy Trap by Professor Daniel Markovits. In his 2019 book, Professor Markovits argues that meritocracy is a straightforward mechanism of class reproduction and wealth concentration—and that it is making life worse for everyone, elites included. The Meritocracy Trap has generated productive conversations about the causes and implications of wealth inequality, and what this means about potential movements to upend the present hierarchy. Because the book centers the gap between elite and nonelite labor as today’s most salient class division, critics have been quick to push back. In particular, some have challenged the book’s downplaying of the role of capital in its class analysis, as well as its optimism about elite cooperation in any project aiming for economic justice. While these are crucial parts of the debate around the book, we want to avoid rehearsing those arguments here.
By examining the social and political valences of a seemingly neutral quantitative system, The Meritocracy Trap touches on several questions at the core of law and political economy. Today on the blog, Marshall Steinbaum and Andrew Hart argue that Professor Markovits omits capitalists from the story in part by relying too heavily on the flawed theory of human capital. Tomorrow, Jeff Gordon turns our attention to the book’s argument that industrial policy contributed to the technological innovations that over-reward elite workers at the expense of the poor and working class, and that industrial policy will be essential to build a fairer economy. You can find all the posts in this series, including responses by Professor Markovits, here.
There’s a big difference between the first Gilded Age and the second. Historically, rich people earned income from their capital and everyone else earned income from their labor, under the direction and control of the capitalists. This time around, the rich don’t just own capital; they also work. Daniel Markovits’s book The Meritocracy Trap is about just how hard they work, and what it says about them.
Markovits documents an American life increasingly dependent on meritocratic sorting processes that begin as early as preschool and spill out onto a labor market offering either “gloomy” or “glossy” jobs, with little in between. At its best, The Meritocracy Trap outlines a thoroughly depressing dilemma. Meritocracy’s “losers,” such as Amazon warehouse employees, face outrageous exploitation in the form of low wages and inconsistent and diminishing hours, alienating them from a sense of purpose and their place in society. Meritocracy’s winners, such as Markovits’s students at Yale Law School, are subjected to a life of constant and overbearing education and training so that, when the day comes to enter the workforce, they are prepared to put in the long hours to the exclusion of all other pursuits, their student debt forcing them never to abandon their place on the assembly line.
Although Markovits covers the outrages of “gloomy” employment thoroughly and ably, the elite workers in the “glossy” professions inspire his most interesting insights. Markovits’s theory is that meritocratic elites—the well-heeled lawyers, bankers, managers, and consultants—are miserable, just like everyone else. But for all its sociological and analytical merits, The Meritocracy Trap is on shakier ground when it turns to the economic causes of all this misery. By relying heavily on the theory of human capital, Markovits fails to account for the crucial distinction between the wealthy people doing the elite professional work and the even wealthier capitalists paying them to do it.
Markovits invests a great deal of energy establishing a new vocabulary to name the phenomena he describes, but the ways in which these terms correspond to the real world or cohere with the rest of his argument are not always persuasive or, indeed, entirely clear. Perhaps the most frustrating neologism is Markovits’s frequent reference to “the rich and the rest.” He means this as a convenient shorthand for the inequality that colors every aspect of American life, but it’s never certain who he considers “rich.” Sometimes, he references the “1%” and even the “0.1%”; other times, he seems to bundle together well-paid professionals with the billionaires at the economy’s commanding heights.
He often frames his analysis in terms of the “middle class,” without laying much groundwork for what he actually means, although it becomes clear that he generally takes it to mean everyone who is not rich. The underanalyzed questions about the differences between rich professionals and the ultra-wealthy capitalist class overwhelm the back end of Markovits’s argument.
The book’s trouble with class is one part of a broader issue with Markovits’s economic analysis. Markovits acknowledges that “glossy” jobs go overwhelmingly to the children of elite professionals. He even argues that meritocracy is primarily a ritual by which elites justify their own eliteness to themselves. Yet he leans heavily on the theory of human capital, arguing that elite professionals are “superordinate” (as opposed to “subordinate”) workers whose “extraordinary” skills justify their high salaries.
If ritualized class reproduction also produced the economy’s most skilled and productive workers, it would be a strange coincidence indeed. More plausibly, the pedigreed meritocrats already ensconced in the elite professions hire their own behind them, knowing that the primary job qualification is the ability to polish apples and eat giant plates of shit for hours on end, and believing that none are better qualified than people with a lifetime of practice. It is not the meritocrats’ skills that bring in their high salaries. It is their social connections, indicia of elite status, and ability to work 14-hour days that qualify them to profit from the lucrative transaction fees downstream of the capitalist elite in this super-consolidated economy. This is a skillset, in a way, but it’s very different from the traditional human capital narrative of economically productive talent being rewarded with worldly success.
Anyone who’s studied Chinese foot-binding is familiar with the awful things elite people do to themselves (and, in that case, their subordinated female dependents) whose entire function is in that they are quite visible and that poor people cannot afford to do the same. Such as attend Yale.
But no one would be foolish enough to claim that binding feet caused greater economic productivity, even if it’s undeniably correlated with greater wealth. With Yale, the causal story is at least plausible. More to the point, the meritocrats themselves believe it, which is the ultimate function of meritocracy. The most effective institution devoted to preserving hierarchy as it exists is that which convinces its own membership and stakeholders that that’s not what it’s doing. And elite academia, Goldman Sachs, Teach for America, and Google are exemplars of exactly that. To analyze those organizations and the meritocratic elite who inhabit them is well worth doing and understanding, but it is not a theory of inequality so much as an analysis of its epiphenomena.
A better explanation can be found in the distinction between the wealthy people doing the elite professional work and the even wealthier capitalists paying them to do it. Markovits stumbles through a critique of Thomas Piketty’s Capital in the Twenty-First Century, following along similar lines as some previous authors: that Piketty’s is a simplistic story of capital versus labor, but the super-rich of today in fact derive their wealth from their labor, so that story must not be true. Unfortunately, that dismissal misunderstands Piketty. In place of his analysis, it adopts the theory of human capital to explain extreme inequality at the top end of the income and wealth distribution. It therefore inherits that theory’s fatal flaw: misconstruing the emoluments of elite status with its cause.
First of all, it’s only thanks to Piketty and his research collaborators that we even know that rising inequality in the 21st century is due to rising labor income inequality, at least as income is categorized on tax returns. Second, Piketty offers a theory for that: the rise of the super-manager, who is paid so generously not because of his superior skills but because of his command of the allocation of bargaining rights within the firm. In this story, the super-manager is in a position to take not only the product of subordinate workers for himself (that would be the classic Marxist account), but also the returns to capital. This is what Markovits misconstrues as the founder’s share and contorts to fit within the human capital frame, when it is in fact the return to economic control and the power to coerce.
Even Piketty, writing less than a decade ago, did not fully grasp the emerging relations between management and ownership. He assumed that super-managers bargain against the shareholder-capitalists who appoint them to the executive suite. But it is increasingly clear that the super-managers are the capitalists. The most obvious example of this is in private equity, a business structure premised on uniting ownership with management, the better to squeeze rents out of every other stakeholder to the firm. But even nominally traditional public companies, with shares traded on the open market and governed by boards independent of (and with power over) management, have entered into private-equity-like arrangements in which executives are appointed by boards to loot assets on behalf of shareholders, and are thus richly rewarded with the kinds of capital shares that were once the province of the idle rich.
So if we have to choose between human capital and Piketty, Piketty wins, hands-down. But we don’t have to choose. Instead we have a better option: the super-rich have figured out how to run the economy’s most powerful entities solely in their own interest, without having to cut anyone else in on their sweet deal. And that’s true regardless of whether they obtained their position by inheritance or by founding companies, because those things are not, ultimately, that different. Markovits would do well to read Piketty’s sub-chapter “The Moral Hierarchy of Wealth” on exactly this point. The upshot is that there isn’t one.
Although The Meritocracy Trap’s causal analysis is not always persuasive, its description of life under meritocracy hits hard. Many people who pass through elite education are, of course, exceptionally bright, hardworking, and creative. Markovits, like any law professor, has seen scores of promising students with vague notions of doing good in the world succumb to the gravity of corporate law. Across all sectors, this same process grinds along: received ideology and financial imperatives funnel talented people into a narrow set of unfulfilling, all-consuming jobs in law, finance, tech, consulting, and management. From preschool on, the whole system is geared toward trapping the best and brightest in dark office buildings, facilitating mergers, writing code, revising corporate rightsizing plans, and defending black lung claims into the night.
Markovits, to his great credit, has compiled a formidable case that this is no way to live. At bottom, however, he proposes that the entire American political economy is driven by the social reproduction of haute bourgeois service jobs. Although that phenomenon exists, it is downstream of the actual forces determining who has wealth and power in society, meaning that the full story of meritocracy’s relationship to inequality must account for how the super-rich have shaped the economy before analyzing where the meritocrats have fitted themselves into it. The idea that the economy’s elite are, in fact, its victims is enlightening and potentially politically actionable. But while Markovits’s contribution is an important and illuminating one, it is ultimately a view of a part of the elephant, and not the whole thing.