Comment by hn_throwaway_99 | Hacker News Reader

Comment by hn_throwaway_99 | Hacker News Reader

hn_throwaway_99

I think this discussion of inequality misses a major point: even of a meritocracy is able to be "perfectly fair" when it comes to identifying merit (e.g. ignoring connections or inherited wealth), it still leads to pretty broken societies if there is so much inequality that only the very best of the very best can succeed.

As an example, take the NBA. The NBA does feel like it is about as perfect as it gets when it comes to being a real meritocracy. It doesn't matter so much who your connections or parents are, if you can't win on the court, you're out.

But what happens if the whole economy was like the NBA, where the very best of the very best made millions, and everyone else is left to make minimum wage selling concessions. Well, if you're a scrawny 5'4” dude, you know your options are hopeless, no matter how hard you work, and you just may think "Fuck it all, burn the whole system down, I'm screwed in any case."

I don't believe the whole economy is like the NBA, but it's gotten much closer to those dynamics over the past thirty years with the huge concentration of wealth, much of this due to technology being able to reduce the number of "winner" slots be increasing the size of markets.

Yup. The societal shift to an “NBA-like model” has been exacerbated over the last few decades as markets have globalized. Local markets lead to redundancy, which is globally inefficient but locally optimal.

If each local region needs its own widget factory, then to become a top widgetsmith you only have to compete with the local widgetsmith talent pool. Just as there can be many high school star athletes across the world, there can be many top widgetsmiths within their local widget factories across the world, even if each is likely mediocre relative to the global pool of widgetsmiths.

Now the widget market has globalized. To become a top widgetsmith, you now need to be the best in the world. There is no room for locally optimal widgetsmiths when the market can globally optimize, just as there’s no room for most star high school athletes at the NBA.

The upside is that the entire world gets much better widgets. The downside is that you can only make a good living as a widgetsmith if you’re the absolute best in the world.

I think there's more to the winner-take-all economy than the rate of technological change though. In theory technology should democratize information and power, but we've seen the opposite in recent years.

It's probably what PG wrote back in April—starting with the Chicago School of economic thought and the Carter administration, the US federal govt. deregulated the economy and took a more lax approach to policing anti-competitive behavior.

I do agree with your primary point: I think there is more to the winner-take-all economy than just technological change. However, when you say "In theory technology should democratize information and power..." In what theory? Technology like the internet, global media, and global supply chains means in the past where you could have many individual regional markets, with regional winners, now you have a lot fewer, but much larger markets, which concentrates power.

Even the NBA avoids "perfect meritocracy" at the margins of the league; there's a player's association, the NBA has had a pension since the 60's, there are salary caps and luxury taxes (to prevent super-teams from forming on the coasts), top draft picks often end up on the worst performing teams in prior yeas, each team has to contribute players to new rosters whenever the league expands, etc.

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