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Msg  469629 of 471382  at  5/17/2021 8:49:53 PM  by

sandgrey


Meritocracy Is the Golden Ticket to Growth: Adrian Wooldridge

Meritocracy Is the Golden Ticket to Growth: Adrian Wooldridge
2021-05-16 07:00:17.238 GMT


By Adrian Wooldridge
(Bloomberg Opinion) -- Meritocracy is under assault from
all directions. For progressives, it is a tool of White male
privilege; for right-wing populists, an instrument of
androgynous cosmopolitan elites; and for ambitious parents, a
nightmare of sleepless nights and anxiety-ridden children. Black
Lives Matter, one of the most successful protest movements of
recent decades, puts meritocracy high on its list of targets.
Even some of the more distinguished ornaments of the
meritocratic system have given up defending it: Harvard’s
Michael Sandel calls it a “tyranny” while Yale’s Daniel
Markovits dismisses it as a “trap.”
This is more than empty rhetoric. The war against merit is
producing real consequences. San Francisco’s Lowell School is
one of the most successful schools in the country and has given
thousands of poor immigrant children (among others) a chance of
an elite education. The San Francisco Board of Education has now
banned it from using admission tests and introduced a lottery
system instead, with the school commissioner, Alison Collins,
pronouncing that meritocracy is “racist” and “the antithesis of
fair.” Elite schools in New York and Boston are also under
threat. Programs for the gifted and talented are being
dismantled across the country. Universities have been reducing
the importance of standardized admissions tests, with some going
so far as to make testing optional, and putting more emphasis on
“holistic assessment” instead. Companies are introducing formal
or informal quotas in the name of “equity” (which is
increasingly taking the place of equality of opportunity as a
measure of justice).
The significance of this is hard to overstate: Meritocracy
is one of the great building blocks of modernity, along with
democracy, capitalism and liberalism. We need to be very sure of
our ground if we are to start dismantling it. Is it really the
case that meritocracy is a tool of White male privilege? W.E.B.
Du Bois and Ruth Bader Ginsburg might have something different
to say. Are lotteries or holistic assessments really better ways
of distributing educational opportunities than standardized
tests? Most of us would hesitate before flying with a pilot who
had been chosen by lottery. Do we really want a society in which
group identities trump individual abilities? A glance at the
history of India or the former Yugoslavia suggests that we
should at least pause before taking this leap.
The easiest way to demonstrate the dangers of dismantling
meritocracy is to look at economics. Reasonable people can
disagree about questions of social justice — though I would
argue that the idea of merit is one of humanity’s most
successful privilege-busting inventions. But the evidence of
economics is overwhelming: Meritocracy promotes prosperity, and
dismantling meritocracy will reduce it. Those who support the
current campaign against merit need to admit that they are
opting for lower growth. Those who are still trying to make up
their minds need to take future prosperity into account.Growth’s
Not-So-Secret Sauce
The surest sign that a country will be economically
successful is not the health of its democracy, as some liberals
like to think, or the leanness of its government, as some free-
marketers imagine, but its commitment to meritocracy. Singapore
is a soft authoritarian power. But it has transformed itself in
a few decades from a poverty-stricken swamp into one of the
world’s most prosperous countries, with a higher standard of
living and a longer life expectancy than its old colonial
master, because it is perhaps the world’s leading practitioner
of meritocracy. The Scandinavian countries have some of the
world’s largest governments and most generous welfare states.
But they retain their positions at the top of international
league tables of prosperity and productivity in large part
because they are committed to high-quality education, good
government and, beneath their communitarian veneer, competition;
in other words — meritocracy.
By contrast, countries that have resisted meritocracy have
either stagnated or hit their growth limits. Greece, a byword
for nepotism and “clientelism” (using public-sector jobs to
reward partisan cronies), has struggled for decades. Italy, the
homeland of nepotismo, enjoyed a postwar boom like France and
Germany but has been stagnating since the mid-1990s. The handful
of countries that have succeeded in combining anti-meritocratic
cultures with high standards of living are petrostates that are
dependent on the accident of geography rather than the ingenuity
of their people. In the post-oil age, they will surely suffer a
sharp decline in their standard of living unless they change
their habits.
A raft of cross-country surveys reinforces this impression.
The Organization for Economic Cooperation and Development, a
global think tank, has repeatedly demonstrated that high social
mobility, a sure sign of meritocracy, promotes economic growth.
Both the World Bank and Transparency International show that
corruption is inimical to long-term prosperity. Nicholas Bloom
of Stanford University and John van Reenen of the Massachusetts
Institute of Technology have collected data on management
practices in more than 11,000 firms in 34 countries to produce a
veritable Domesday Book of management. They demonstrate that
countries that favor recruiting professional managers through
open competition have higher growth rates than those that favor
recruiting amateur managers through personal connections.
America has the highest overall management score, followed by
Germany and Japan. Rich-world laggards such as Portugal and
Greece, and big emerging-market countries such as India, have a
long tail of un-meritocratic and therefore badly managed firms.
Two recent studies are particularly telling. Four
economists at the University of Chicago Booth School of Business
have examined America’s GDP growth per person from 1960 to 2020
through the prism of talent distribution. They claim that
roughly a fifth of the country’s growth during this period can
be explained by the improved allocation of talent, particularly
the opening up of highly skilled professions to new talent
pools. In 1960, 94% of America’s doctors and lawyers were white
men. By 2010, that number had shrunk to 60%. This makes for both
a more productive and a more just society.
Bruno Pellegrino of the University of Maryland’s Robert H.
Smith School of Business and Luigi Zingales of the Booth School
have constructed a measure of countries’ levels of meritocracy
based on data from the World Economic Forum’s survey of expert
opinion on who holds senior management positions. The WEF asks
questions such as: Are senior managers recruited on the basis of
family connections or on merit and competence? Are senior
managers willing to delegate authority to juniors? And are
managers rewarded and promoted according to productivity? The
authors also posit that a country’s level of meritocracy in the
business sector is related to its level of meritocracy in the
wider society (quality of government, rigidity of employment
laws, quality of judicial decisions, size of the black economy,
vibrancy of the high-tech sector). They rank the world’s
advanced economies roughly in terms of their “meritocracy score”
(“roughly” because the data are based on perceptions, albeit the
perceptions of experts): Sweden comes at the top and Italy at
the bottom. More generally, northern European countries cluster
at the top, along with the U.S. and Japan, while southern
European countries lie at the bottom.
The authors show that countries with high meritocracy
scores have enjoyed much more of a bonus from new technology
than countries with low scores such as Italy. Italy’s loyalty-
based management style had no negative consequences for
productivity growth in the decades before 1995. But when the IT
revolution took off, loyalty-based management reduced Italy’s
productivity growth by between 13 and 16 percentage points. This
result suggests that the meritocracy dividend is growing along
with the IT revolution: Meritocracy is not just the secret sauce
of economic growth in the long term, but also a secret sauce
that is becoming ever more potent.
The comparative study of institutions points to the same
conclusion as the comparative study of countries. Independent
central banks are more successful at controlling inflation than
those that are beholden to governments and therefore voters.
Independent judges, appointed by technocratic merit commissions,
produce sounder judgments than partisan judges, elected by the
voters, in the sense that their rulings are much more consistent
and much less likely to be overturned. Public companies
routinely outperform family companies unless family companies
take the precaution of hiring professional managers.What
Happened to the Manhattan of the Middle Ages?
Another way to measure the prosperity-producing power of
meritocracy is to look at what happens if you remove it. The
City College of New York had a well-deserved reputation as the
“Harvard of the proletariat,” taking thousands of poor
adolescents, many of them the offspring of immigrants, and
turning them into the successful citizens of a knowledge society
— doctors, lawyers, academics and, in the case of 10 alumni,
Nobel Prize winners. Then in 1970 the university introduced an
open-access regime, admitting anyone who had graduated from the
city’s high schools. The result was a simultaneous boom in
student numbers and a collapse in academic standards. By 1978, 2
out of 3 students admitted to the college required remedial
teaching in reading, writing and arithmetic. Dropout rates
surged. Talented scholars left. A college that had once
specialized in producing the rocket fuel of a successful society
— talent — became synonymous with protests and sit-ins. In 1999,
a task force led by former Yale president Benno Schmidt
pronounced the larger City University system to be “in a spiral
of decline.” The college only began to recover after it
abandoned open admissions as a failed experiment.
The same thing happened, on a far larger scale, with what
was arguably the world’s first global city. Venice is one of
Italy’s least favored cities when it comes to natural resources.
Yet in the early Middle Ages it was the richest city in Europe.
Venetian sailors — there were some 36,000 of them in the 14th
century — popped up as far away as China. Venetian merchants
invented the prototype of today’s joint-stock companies, the
commenda. The same merchants used the proceeds of ingenuity and
dynamism to build some of the world’s most spectacular buildings
and patronize some of its most glorious arts.
This Manhattan of the Middle Ages owed its success in large
part to its unusual openness to talent: Rather than a hereditary
ruler, the standard at the time, Venice had a doge who was
selected by the ruling families; rather than a royal court, it
had a council of wise men whose job it was to advise — and
constrain — the doge. Social mobility was commonplace. Daron
Acemoglu of MIT and James Robinson of the University of Chicago
Pearson Institute calculate that in government documents in the
years 960, 971 and 982, new names made up 69%, 81% and 65%,
respectively, of those recorded. Institutions became more
inclusive: From the late 12th century onward, a hundred new
members were added every year to the Ducal Council, which kept
the doge under tight control.
Yet from the late 12th and early 13th centuries, the most
powerful families took to rigging the system in favor of their
children. In 1315 they succeeded in locking their position at
the top of society for good by publishing the “Book of Gold”
(Libro D’Oro) — an official list of Venetian noble families that
was intended to keep the social order exactly as it was.
Venetians called this La Serrata: the closure.
La Serrata spelled the end of Venice as the world’s most
successful city-state. A self-satisfied oligarchy used its power
to hoard opportunities and strangle innovation. The commenda
were banned. The state took over trade. Newcomers were kept out
or down. The city lost its vigor. By 1500, the city’s population
was lower than it had been in 1330. By 1851, when John Ruskin
published his magnificent “The Stones of Venice,” it was a
byword for decline: “a ghost upon the sands of the sea, so weak
­so quiet — so bereft of all but her loveliness that we might
well doubt, as we watched her faint reflection in the mirage of
the lagoon, which was the City and which the Shadow.”Meritocracy
With Chinese Characteristics
The West — and particularly the United States — is turning
against the meritocratic idea precisely when the greatest
geopolitical rival it has ever faced, China, is embracing
meritocracy more tightly. China is very far from being
meritocracy incarnate, of course: President Xi Jinping, who
appointed himself president for life in 2018, is the highest-
ranking member of a caste of Red Princelings whose parents and
grandparents came to power with the revolution. But alongside,
or rather mixed up with, the insider dealing of this rather
grubby elite is a very different China (and one that we
underestimate at our peril). Xi was a frequent visitor of the
late Lee Kuan Yew, the architect of the Singapore miracle. The
Chinese educational system is determinedly meritocratic:
Children compete to get into the best nursery schools so that
they can get into the best secondary schools and then into the
best universities. Examinations — most important, the university
entrance examination or gaokao that students take at 18 —
regulate the race to get ahead. This examination system, which
draws on the tradition of civil service examinations that were
administered for more than a thousand years, is now more geared
to produce scientists and engineers rather than Confucian
officials.
The Chinese Communist Party claims that it is trying to
create a system based on “political meritocracy,” with senior
positions allocated not on the basis of Western ideas of
democracy (which the elite associates with decadence) but with
objective performance measures; it is certainly shifting its
power base from the farm and the factory to the university and
the office, routinely recruiting the brightest young students
into its ranks. The party’s Organization Department acts as a
giant human resources department keeping records on high-fliers
across the country. Provincial governors and university
presidents are evaluated on the basis of their success in
hitting a number of targets. Perhaps all this is a contrived
illusion to conceal the money-grubbing of a self-perpetuating
clique. But the West should at least prepare itself for the
possibility that, albeit messily, China is turning itself into a
giant Singapore, determined to use meritocracy as a tool of
growth and social progress.A Case of Mistaken Identity
In the 1980s and 1990s, Western intellectuals convinced
themselves that they had discovered a firm link between economic
growth and democracy. Liberal democracies grew faster than other
political systems, they argued, and fast growth led to
democratic liberalism, in a self-reinforcing virtuous circle.
This discovery created a period of near-Victorian evangelism,
with policy makers welcoming China and Russia into the global
order on the grounds that they would inevitably evolve into
liberal democracies, and a group of neoconservatives even
arguing in favor of “regime change” in the Middle East on the
theory that democracy and prosperity would naturally replace the
toppled regimes.
This vision has not survived the passage of time. Far from
becoming more democratic as they have joined the global economy,
Russia and China have become more authoritarian (indeed, far
from seeing liberalism flowing eastward, we have seen
illiberalism flowing westward). And far from producing democracy
and prosperity in the Middle East, neoconservative policies have
produced bloody chaos. China has grown by about 10% a year for
the past four decades. The democratic West has suffered from the
worst economic crisis since World War II and a “great
stagnation.” Countries as diverse as Rwanda and the United Arab
Emirates have chosen authoritarian modernization over democracy.
There are many contingent reasons for this vast
intellectual failure: Vladimir Putin’s seizure of power in
Russia; the premature dismantling of the Baath regime in Iraq;
America’s ideological and economic enthusiasm for granting
mortgages to people who couldn’t afford them. Still, one reason
is more profound than all the others: The idea that there is a
necessary relationship between democracy and growth rests on a
false positive. The really robust relationship is between
meritocracy and growth.
The West has thrived materially over the past century or so
in large part because it managed to fuse democracy with
meritocracy. America’s Founders understood that the reason for
embracing democracy was not that it made us rich, but that it
gave ordinary people a say in how their country was governed.
They also understood that democracy could actually destroy
prosperity if it wasn’t diluted with a degree of meritocracy.
They built meritocratic restraints into the Constitution by
giving senators six-year terms and giving Supreme Court justices
jobs for life. They also put limits on the power of the state to
interfere in the wider economy. One reason meritocracy
flourished was that the U.S. made it easy for companies to claim
limited liability without declaring an explicit public purpose.
Another was that the U.S.’s lax immigration laws and vast
territories attracted tens of millions of ambitious and
energetic people from more crowded and tradition-bound
societies.
Other Western countries pursued a similar policy of fusing
meritocracy with democracy: France and Britain competed to
produce the world’s most elite civil services, and the European
Union imposed even more restraints on democratic overreach than
the United States did. During the golden years of the 1980s and
1990s this formula worked because the democratic part of the
formula generated political legitimacy and the meritocratic part
generated good government and economic growth.
A cohort of rising powers are trying a different approach:
linking meritocracy with autocracy of various degrees of
hardness. Lee Kuan Yew recognized that the best way to enjoy
Western levels of prosperity was not to introduce one-person-one
vote but to borrow Western mechanisms such as an elite civil
service, recruited through open competition and dedicated to
corruption-free government, and graft it onto older Mandarin
traditions of the rule of the scholar-bureaucrat. Since then a
growing number of countries, led by mighty China, have tried to
imitate his model.
The current attack on meritocracy is not just a threat to
the prosperity of particular countries. It is a threat to the
prosperity of the whole democratic world. Prosperity will
increasingly be identified with top-down authoritarian regimes
that make up for their failure to give their people a voice by
giving them jobs and improving their welfare. Democratic
countries in turn will be associated with economic stagnation,
populist revolts and racial disharmony, as people try to get
ahead in a low-growth environment by emphasizing their
membership in defined groups rather than their individual
merits.
When John Ruskin visited Venice in the 1850s to write “The
Stones of Venice,” the former global superpower had long since
lapsed into political decline and economic exhaustion. Much of
the post-meritocratic West won’t even have Venice’s abiding
loveliness to make up for decline. It will have a landscape of
decaying buildings and pot-holed highways — and the spectacle of
angry protesters perpetually brandishing group rights and
collective resentments.
This essay has been adapted from “The Aristocracy of
Talent: How Meritocracy Made the Modern World,” by Adrian
Wooldridge. To be published by Penguin/Allen Lane in the U.K. on
June 3, and Skyhorse in the U.S. on June 15.


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