Read an Excerpt from “Doing Meritocracy Right” by Thomas A. Cole
As America’s most vaunted cultural value, meritocracy is celebrated by some as an institution and derided by others as a myth—or even a trap. Thomas A. Cole argues in Doing Meritocracy Right: How Business Leaders Can Turn an American Aspiration into Reality (and Why They Should) that if meritocracy is to persist as an institution—and it must—it requires structural support in the private sector. For America to achieve a version of meritocracy that more closely matches our aspirations, our business leaders must first offer equity of opportunity for individuals to demonstrate and develop their talents on equal terms. Read on below from an excerpt from the introduction to this practical guide to more fully achieving a meritocratic society.
Meritocracy is defined as “a system, organization, or society in which people are chosen and moved into positions of success, power, and influence on the basis of their demonstrated abilities and merit.” Another definition rounds out the point with “. . . not because of their money or social position.”
Individuals who achieve positions of success, power, and influence—the winners in a meritocracy—are referred to, and occasionally derided as, “the elite.” These individuals—the social elite— are different from, say, top athletes and virtuoso musicians, among others, who are labeled “elite” based on their success in their chosen fields. Compared to an elite athlete or musician (even Taylor Swift!), a member of the social elite has a greater capacity to exert power and influence over others. The social elite are most commonly, and in the scope of this book, the leaders of organizations in the private sector. Utilization of an appropriate definition of merit is perhaps the most important task in achieving a true meritocracy. It has a positive impact on inclusiveness, as well as on the quality of those who will occupy positions of power and influence. A meritocratic society requires that meritocracy be fairly implemented in each of two stages—in access to quality education; and in post-education advancement to positions of power, wealth, and prestige.
A first cousin of meritocracy is the American Dream, defined as “a social order in which each man and each woman shall be able to attain the fullest stature of which they are innately capable, and to be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.” The availability of the American Dream to persons regardless of race has been a challenge. Abraham Lincoln in 1860 said, “I want every man to have a chance— and I believe a Black man is entitled to it—in which he can better his condition—when he may look forward and hope to be a hired laborer this year and the next, work for himself afterward, and finally hire men to work for him! That is the true system.” And yet, over one hundred years later, Dr. Martin Luther King Jr. was still dreaming of the day when people “will not be judged by the color of their skin but by the content of their character.”
While meritocracy and the American Dream are cousins, there is a difference. The latter allows citizens to “attain the fullest stature of which they are innately capable,” while the former determines who will be members of the elite. Nevertheless, one of the steps to reform meritocracy—making it more inclusive through greater equality of opportunity—will also revitalize the American Dream.
Ironically, the term “meritocracy” was coined as “a derisive term for a new system of class oppression” by Alan Fox, writing in Socialist Commentary in May 1956.6 (The origin of the term is more frequently attributed to Michael Young, the author of the 1958 satire called The Rise of the Meritocracy.) Despite Fox and Young, for most of the second half of the twentieth century, meritocracy was credited with the positive connotations described in the quoted definitions. Moreover, the notion of organizing society in an anti-aristocratic fashion long preceded the coining of the term. Indeed, it is part of the origin story of our republic.
Meritocracy is like other principles of social organization— democracy, capitalism, the rule of law—in that the quality of execution is never perfect and the extent of achieving its goals can ebb and flow over time. Some of the flaws in the execution of meritocracy were present in the mid-twentieth century. A foremost example is the exclusion of many women and minorities (and even non-Protestants) from being assessed on the merits, from being part of the system, and from being given a fair shot at achieving the American Dream, much less joining the elite. Other flaws developed over that time period—the definition of “merit” became too limited; the pursuit of the rewards of meritocracy was gamed by the wealthy, with greater consequences when income and wealth gaps expanded and “credentialism” loomed larger. As a result, “meritocratic inheritance,” the modern version of aristocracy, grew.
The flaws in execution were evidenced in some spectacular and consequential failures on the part of the elite. It was the “best and brightest” and the “smartest people in the room” who brought us the Vietnam War, Watergate, the savings and loan crisis, Enron’s bankruptcy, the wars in Iraq and Afghanistan, the global financial crisis, and the opioid epidemic. And it was the elite who helped promote, and were taken in by, Madoff, Theranos, and FTX. Too many in the elite engaged in behavior that led to the #MeToo movement. Some in the elite are alleged to benefit from “crony capitalism” and engage in “rent seeking.”
Despite these failures, many in the elite have seemed to become more arrogant and out of touch. Some of the wealthiest of the elite fostered this impression by being the embodiment of Veblen’s “conspicuous consumption”—with superyachts, private jets, and homes (sometimes multiple homes) featured in The Wall Street Journal’s Friday “Mansion” section. And then, there is what might be called “conspicuous compensation” of the elite in business—the sometimes-breathtaking compensation of the CEOs of public companies. The amounts are large in absolute dollars and, also, in comparison to the median compensation of all employees. Both the amounts and the comparisons are “conspicuous” because they are required to be disclosed under rules of the Securities and Exchange Commission, the latter disclosure labeled “pay ratio.”
Two aspects of CEO compensation seem to be underappreciated by those who criticize it. First, it is heavily driven by stock price appreciation, and a majority of US households also benefit because they own public company equity, either directly or indirectly. Second, many entertainers and athletes make similar amounts and lead even more lavish lifestyles while providing fewer meaningful societal benefits. But they never seem to be criticized as arrogant, out of touch, or overcompensated. In fact, the astronomical compensation of some entertainers and athletes is sometimes lauded. Case in point: See the June 2024 article about three NBA players with the headline “$100 Million a Year . . . and Worth Every Penny!”
Others have noted that the elite frequently direct their condescension at those who are less educated and especially those who live in rural America. Demon Copperhead, Barbara Kingsolver’s Appalachian-based update of David Copperfield, includes these observations: “The ones in charge started cooking it into everybody’s brains to look down on the land people [that is, those in rural America], saying we are an earlier stage of human life” and “words have been flung like pieces of shit, only to get stuck on a truck bumper with up-yours pride. Rednecks, moonshiners, ridge runners, hicks. Deplorables.” Lest these quotes seem overly dramatic, remember the use of that last word in the 2016 presidential election and consider the success of anti-elite demagogues in garnering votes in rural counties. As John Cochrane put it so well, “there’s no better way to stick it to the elites than to vote for the man [Trump] who drives them most crazy.” Others in the elite were literally allowed to be out of touch as a result of being beneficiaries (sometimes gloating beneficiaries) of the “velvet rope economy.” This is Nelson Schwartz’s term for business models that allow the elite to purchase or otherwise receive priority treatment. Examples include luxury “skyboxes” at stadiums around the country, the Disney World Genie+ pass and the United Airlines Global Services status. Becoming the patient of a primary care physician on a “concierge” basis is another example. One of the best stories about arrogance on the part of the elite involves a self-important airline passenger who, unhappy with a gate agent, thundered, “Do you know who I am?!” The agent calmly said, “One moment, sir,” picked up her paging microphone, and announced to the terminal: “There is a man at the gate who apparently is suffering from amnesia; if you are missing someone from your party, please come here to assist.”
Those failures and arrogance have led to a loss of respect for authority and have fed demagoguery. This was recognized by none other than Steve Bannon. His explanation for the recent successes of populist and ultraright-wing politicians was that the elites “are more and more detached from the lived experiences of their people.”
In addition, recent experience with meritocracy has unleashed a flood of criticism. It has been observed that “criticism [of meritocracy] now crosses the political spectrum from the social-democratic left to the populist right.” The other recent books on the subject—and there are many of them—take a decidedly negative view of meritocracy. Their titles use terms like “tyranny” and “myth,” and they describe the winners in a meritocracy as “snobby cosmopolitans” engaged in a “charade” of making the world a better place. Meritocracy is called a “sham” and a “trap” that turns “every colleague [into] a competitor” and an “alibi for plutocracy.” It has been called an “ideological myth to obscure and extend economic and social inequalities.” It has been accused of “promoting a socially corrosive ethic of competitive self-interest,” even to the point of promoting cheating. David Brooks has asserted that “meritocracy’s utilitarian, instrumentalist mindset can, in some cases, distort a sacred bond: parenthood,” creating “meritocratic [as opposed to ‘simple’] affection” in which “some parents unconsciously shape their expressions of love to steer their children toward behavior they think will lead to achievement and happiness.”
Despite the fact that the notion has been around forever, it has been called the “ideological engine of late capitalism.” Perhaps the most pessimistic of all assessments was this—“There is reason to doubt that even a perfectly realized meritocracy would be a just society.”
The American Dream has received similar criticism. It has been called a “foundational myth” that puts too much emphasis on “individual determination, brittle self-sufficiency, and personal accomplishment,” detracting from “robust social programs that would address root causes” of social ills. A more whimsical criticism is George Carlin’s pithy comment: “They call it the American Dream, because you have to be asleep to believe it.” Finally, David Leonhardt in his recent book Ours Was the Shining Future laments “the decline of the American Dream over the past half century.” He attributes that decline to “the lack of a strong political movement dedicated to protecting that dream,” resulting in the abandonment of “democratic capitalism,” which he defines as “a system in which the government recognizes its crucial role in guiding the economy.” Leonhardt contrasts “democratic capitalism” with “rough-and-tumble capitalism.” I agree with Leonhardt that some degree of governmental regulation of the economy is needed. However, I believe that revitalizing the American Dream is best achieved not by increased regulation of businesses, but rather as a by-product of one of the steps to reform meritocracy—greater inclusiveness—and look to the private sector to take on that task.
Thomas A. Cole is chair emeritus of the executive committee of Sidley Austin LLP, a global law firm. He is the author of CEO Leadership: Navigating the New Era in Corporate Governance and coauthor of Collaborative Crisis Management: Prepare, Execute, Recover, Repeat, both also published by the University of Chicago Press.
Doing Meritocracy Right publishes this November. Pre-order a copy now and use the code UCPNEW to take 30% off when you order directly from us.