America’s elite: An hereditary meritocracy
economist.com
economist.com
The risk in "meritocracy" is that we no longer live in an agrarian society. In the modern economy skills, training, and education are the surest means to success. We've replaced the "landed aristocracy" with the "educated aristocracy". This could only be considered a meritocracy if the potential to become educated was equally available to all, but the situation in America is further from that ideal than almost any other place in the world.
Nope. Still land:
http://mattbruenig.com/2013/06/13/whats-more-important-a-col...
actually it was never just land either. It used to be about owning land, debts, gold and slaves
Now it's about owning land, debts (bonds), gold and shares.
https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...
52% own stocks.
http://www.gallup.com/poll/162353/stock-ownership-stays-reco...
I'm too lazy to google bonds and gold (both easily available to anyone with a brokerage account).
The means to success seem pretty accessible based on these numbers.
Looks for the % of Americans that own 95% of their home and try again.
PS: Out of 300 million There are under ~21 million households that own their home actually own their home.
There was a few pages with similar numbers. EX:"More than 20 million American homeowners own their homes outright. No mortgage." http://www.cnbc.com/id/100370046#.
I used under 21 because there seems to be diffirent definitions of home owner. IE if you get a reverse mortgage are you still a home owner, how about a small home equity line of credit, own 2 houses and have more than 1 house of equity etc.
Now if you were to just up and stop paying your debts, you can lose it.
...who has usually taken out a huge loan for the privilege, providing a stream of rents to the, uh, real aristocracy.
>52% own stocks.
Probably less than 1% could actually live off what they own, however, and rely primarily upon their labor for their income.
>The means to success seem pretty accessible based on these numbers.
Yes, well you intentionally made these numbers misleading didn't you? You didn't count the number of Americans whose incomes are derived wholly or nearly wholly from rents. You counted the proportion of Americans who owned at least one share.
As for owning one's home... were medieval peasants who owned a sliver of land aristocracy? According to you it sounds like it.
I find the whole concept of "aristocracy" as applied to the US nonsensical.
Aristocracy is a form of government (rule by "the best"), and we simply don't have it. The fact that your mortgage payments go to a servicer who funnels it to a CDO who funnels it to Calpers doesn't mean that members of Calpers are aristocratic rulers of the US.
And let me remind you that the mortgage holders don't necessarily own any land.
Of course you do.
>Aristocracy is a form of government (rule by "the best"), and we simply don't have it. The fact that your mortgage payments go to a servicer who funnels it to a CDO who funnels it to Calpers doesn't mean that members of Calpers are aristocratic rulers of the US.
Nope, the fact that the 1% own vastly more than Calpers or any other pension fund does mean that, though.
The point is, that the comparison is still bad.
i.e. "Slaves can be held from the time of their capture, purchase or birth, and deprived of the right to leave, to refuse to work, or to demand compensation. " http://en.wikipedia.org/wiki/Slavery
If you have a mortgage you can still refuse to work and just become homeless. Company men will not drag you kicking and screaming to your cubicle and force you back to you home in the evening to watch X-Factor until you vomit and pass out.
The real thing that leaves families impoverished and destroys them is when they have borrow half a million for a house to live in, only to find out that's only really worth about a quarter million a few years later during the economic crash, thus precluding them from actually selling it and moving somewhere that has an economy where they can work. That's principal, not interest.
If you have to make a mental association between your mortgage and institutionalized human suffering, maybe indentured servitude would be a better (but still ridiculous) fit.
In the US, personal bankruptcy is an option. But not all Western countries have this luxury. In Norway, for instance, personal bankruptcy basically amounts to entering a 5-year contract of indentured servitude (you by law have to earn as much as you can, and get to use only the smallest possible amount of it to feed and clothe yourself - the debtors take the rest).
I think the term exploitation would cover this?
Even if there is some form of semi-institutionalized gouging, it's still not slavery.
[0] https://en.wikipedia.org/wiki/Human_rights_in_the_United_Ara...
[1] https://en.wikipedia.org/wiki/Human_rights_in_Qatar#Immigran...
Consider the example of foreign language immersion. I picked up conversational Portuguese this year from Duolingo (a free app, admittedly requiring a 249rs/month data connection). Duolingo just released English for Hindi a few months ago which will do more to make English language education accessible than even the Catholic Church did [1]. Or consider coding - again, free from codeacademy.com or learnXthehardway. Same for math from Khan Academy and Wikipedia.
Lets distinguish access to education from access to certification. Access to education has never been more available than it is now.
[1] For those unfamiliar, many (non-Christian) Indian parents pay way too much money to send their kids to Catholic school for English language education. Secular English education is ridiculously expensive.
But the more important thing is in my opinion some kind of "drive" or "stickiness". We all know about the ridiculous high drop out rate from most MOOC courses. I think it might be that it is far less about education what makes kids succeed, but parents who are able to show their kids - may it be by example, by preaching, by pushing them - that they have to stick with things, even when it is "not fun", in order to succeed.
But this can compensate this with money - it allows you to push a kid in some kind of system (boarding school, etc) where it is more painful (social pressure, etc) to not stick with something (school) than otherwise.
I think the current system of traditional schools and online courses is a sort of awkward/silly transition state. Online education (as far as I've seen) is trying too hard to become some sort of 'school-but-in-the-cloud'. It would be like selling MP3s through record-stores-in-the-cloud in album form, ignoring things like YouTube and Spotify.
Online education shouldn't (in my opinion) be about MOOC courses. It should be about literally figuring out what you want to do, finding people who can help you, building actual relationships with real people doing real work, and then literally getting involved and literally doing stuff. More like massively-distributed-apprenticeships.
It's already happening, and I'm a proud early case study.
Modern aristocrats farm money, in the form of rents paid for access to money. Land ownership is a useful byproduct.
It's still a feudal system. In the same way medieval peasants were tied to their lord's demesne, the modern peasant class is chained inside the local capital flow network and dependent on its favours for survival.
Education will only get someone so far towards becoming a financial farmer.
The irony is that money is a fiction anyway, and socially it's just a proxy for executive power.
So when the aristocratic class decided to 'fund' a project they're simply giving it an aristocratic nod - which they only do if they believe there's an acceptable chance they can benefit from it personally.
No actual stuff flows from one person to another. There's just a temporary infusion of transferred political power and status.
This comment being posted on HN is quite ironic. Unless you are philosophically opposed to the Internet there have never been more options for capital access or less reliance on local "aristocracy". The contortions needed to make these kind of arguments should give some indication of their veracity.
That the aristocracy has become more abstract does not mean it has ceased to exist.
The digital tools will allow for significantly richer personalization - both with respect to the content being learned, as well as the facilitation of that learning via a skilled instructor. And, while we have the beginnings of these (digital/conceptual/pedagogical)tools, we don't a public conception yet of what this will actually look like.
There is a small number of high socio-economic status positions available at any point, and who gets those is determined mostly by how rich their parents are.
Meanwhile those at the lower end must live short stressful lives, fraught with misery, overwork and income insecurity, all the while being lectured that they are the "takers" by the media.
It seems someone has to end up on top, even if we were all equal.
Here's the thing though- landowners don't just own land. They receive disproportionate profits and dividends from charging others for the use of that land. They (broadly speaking) collect rent, which they can then use to build schools, pay teachers, build banks, collect interest, so on and so forth.
The descendants of landowners have the most resources, which allow them to get the best education, the best skills, the best referrals, the best jobs, best networks. In land-scarce Singapore, for instance, about 50% of top students in primary school come from families who own landed property- the elites, who make up about 16% of the population.
It's wonderful that commoners can now also compete- a man like Barack Obama could become President- but there's still a long way to go.
That said, "America is further from that ideal than almost any other place in the world" strikes me as rather... naive? There are more than 6.5 billion people outside America, and there are still people with no access to schooling whatsoever, no basic literacy, etc.
I don't think education is quite as important as it is made out here, rather it is a confounding factor. Owning the means of production (being rich) is what makes you rich(er).
The import of education applies mostly to the middle class.
Your point about the value of owning land in the past was spot on. Several hundred years ago the primary occupation was subsistence farming, which requires a lot of fertile land. The most readily available source of energy was the photosynthetic energy from the sun stored in the trees of the forest, access to which also required lands. And the most healthful food sources were the animals who lived off of those lands. But today? We have a diversity of occupations, ample energy and plenty of food (in the developed western world at least). We have these things because of an increasingly complex web of progress and interdependence that's been enabled by technology. The resources that really matter in 2015 are human resources. The world is changing faster than any textbook can keep up with, faster than even the best teachers can understand and communicate to others. The only way to find and take advantage of the newest the rent seeking opportunities is to associate with the people who are creating them. Knowing a guy who knows a guy is the new nobility, and no amount of book learning can compete with being a member of the "in" crowd.
On the brighter side, society is exponentially more egalitarian than it was in the days of the landed aristocracy. If a man from Victorian England could observe the current level of social mobility (again, in the developed west) he would end up flat on his fainting couch. Unfortunately there is no way to prevent the wealthy from using their resources to give their kids a better life than everyone else has. Most people genuinely love their kids more than anything, who's to tell them that they can't spend money on what they hold most dear? The good news is that the long view paints a pretty picture. We're as far from aristocracy as we've ever been, and we're not going back any time soon.
This is part of Europe's cartoon view of America. The educational problems in the US are largely cultural.
But I don't think being a doctor, lawyer, or Goldman-Sachs programmer, automatically makes you an elite. Owning a home doesn't make you an elite.
Having the capacity for power and influence, imo, makes you an elite. You don't necessarily need to express your power, but if you have no power to express except for buying a nice home, education, car, and so on, then I don't think you have power. Power is the ability to substantively influence political, social, or economic spheres. Bill O' Reilly has power. Peter Thiel has power. Bill Gates has power.
Because I really have to say, how are you an elite if you seem to lack so much say over the world around you? It almost looks like you are a luxurious piece of driftwood, bobbing to force of massive tides.
A lot of people have this standard of elite where if it's better than 99% of the world, then you must be an elite. But then I look at that remaining 1%, and I find too many servants of the elites (I consider a normal doctor to be a servant of the elites), which is why I don't like that capricious cutoff point. We should be focused on a more interesting question:
How do we describe power? Who has it? How much do they have? How does their power work? That's what I want to know when I drive an inquiry around "elitism".
I can believe the argument of hereditary meritocracy for an academic middle class, where children grow up in houses with books in them, rather than 24/7 TV, and parents who are able and willing to help their kids when they struggle with their school work.
But it does most definitely NOT apply like this for the "elite" - that is when you get a cushy, highly paid job where you can virtually do no wrong because you studied at the right university, visit the right clubs and (therefore) know the right people. And that is only until you come into your inheritance, when your "work" will consist of raking in the huge rent you are receiving because you are rich already.
While it's du jour to criticize the wealthy for the occupations they choose, I take issue with the idea that the jobs are "cushy" and ones in which you "can do no wrong". It's certainly true that going to the right university and knowing the right people gets your foot in the door, but for the most part the people who get these high paying jobs are immensely qualified. And the jobs they are doing are in fact challenging and you will be fired for underperformance.
I've been going through the interviewing process at one of these universities and while on the whole I'm not impressed with the quality of the students here compared with e.g. my high school (and I think there is a lot of smugness and false sense of superiority among many of my peers for presumably being smarter/better than everyone at a "lesser" school), I am, however, very impressed with the students I've met in the final rounds of the interview process for some of the top tier banks and other financial firms. They are among the most intelligent and well rounded of those I've met in school.
Economic rent arises when, for whatsoever reason, two or more persons compete for the possession of a piece of land, and it increases directly according to the number of persons competing. The whole of Manhattan Island was bought originally by a handful of Hollanders from a handful of Indians for twenty-four dollars' worth of trinkets. The subsequent "rise in land-values," as we call it, was brought about by the steady influx of population and the consequent high competition for portions of the island's surface; and these ensuing values were monopolized by the holders. They grew to an enormous size, and the holders profited accordingly; the Astor, Wendel, and Trinity Church estates have always served as classical examples for study of the State-system of land-tenure.
Or maybe the education system ended up being tailored for well minded people, and not for the others ? Education involves a lot of human interaction, it's pretty difficult to teach and learn.
> Neither has plausible ideas for what to do about it.
The purpose of education, in my mind, is to lift people out of poverty by just teaching them a job that their parents don't have any relationship with, and will never have.
If you put competition in something that is made to reduce inequality, you will be disappointed. Maybe expensive schools should be taxed to fund more public schools too. There's a student loan bubble, so why not tax it to fund community colleges ?
To be honest, I live in france, I think the problem with the US education system is what the education quality students are exposed to from age of 8 to 16. I think it's very heterogeneous in the US, and that might be the source of the problem.
Education is a wide-scope issue; availability is only part of the equation.
It's easy to perceive education as "immediate" from the middle/upper class point of view, but it's not so immediate in reality for families living on food stamps and/or multiple jobs, and/or with relatives in jail, and/or having children going to schools with high crime rates and/or poor teachers, and so on.
I strongly doubt that any of those self-made millionaires is the son of, say, a Mexican car washer.
If those were mentioned in the article he would not have much of an article would he?
And learning online may teach you the skills, but won't replace the prestige you earn or the connections you make at an ivy league university.
The fact that you're at a prestigious university in the first place means there's a good chance you're already rich. And the easiest way to get rich is to be rich in the first place. This is the point of the article. Not that education makes all the difference, but that being rich has so many advantages.
This can mean that their kids can get a better education. This means the kids get a better job starting and the grandkids get an even better start. It might take a few generations, but working hard can bring you up the ladder.
The Millionaire Next Door sets out the terms of an "Average Accumulator of Wealth" which are literally impossible to meet for young workers without family support.
The mobility charts don't lie, if you take all of the kids born to households in the bottom 40% of income -- fewer than 10% of those kids will ever earn top quintile salaries. Keep in mind how low of a bar that really is, in 2010, the cutoff line for upper 20% of single-earner incomes was at $42,000.
Spend less money, save more money -- all fine advice, but the average $40k/year individual can't possibly become "a millionaire" in any sense of the real value of a million dollars. Ignoring inflation then showing $1,000,001 in a bank account in 40 years doesn't really count.
As a general rule, pop culture personal finance books exist to make the authors wealthy -- not the readers.
Over there, potential students submit their high school performance reports to a centralised system and select programmes they want to study. Then system selects students based purely on their academical performance. It includes high school exam and average grades at final year of high school. Few top performers in each programme get all expenses paid, a bunch of good-but-not-best get partial coverage.
All seems good on paper, but it gets nasty during the last few years at high school. People do whatever they can to increase their grades. Including cheating, manipulating teachers and so on. In addition to that, people learn solely for the exams. Instead of gathering general knowledge, previous exams are studied to prepare for questions that may be in the upcoming exam. So it's either studying for grades or paying for studies.
Another problem is that some people graduate with the best grades and don't know what they want to do. But they're pretty sure to get a free spot thanks to good grades. They apply for random programme that has a cool title. Sometimes they end up enjoying it, sometimes they just sit through it and end up working in a different field. While people who were genuinely interested in that subject, but had lower grades, may not get even a paid spot.
It may be grass-is-greener thingie, but interviews and letters of application seem to be much better way. Grades do not show if particular person is a good fit for the specific programme. Different schools/teachers rate their students a bit differently as well.
Perhaps the best system would be a combination of anonymized grades/scores combined with anonymized interviews?
Anonymization definitely helps. It's strictly enforced on national exams there and it seems to work pretty well. I'd focus on ensuring that applicants themselves do the job though. For example, application letters could be written in a controlled environment, without any help from 3rd party. Some people would memorise prepared letters, but it would make it a wee bit more fair.
P.S. Anonymous interviews would look great. Live Robot voice converter, full face (body?) mask... I'd watch this movie.
There are areas of expertise and service the country needs and focusing resources on that is far better than the near blank check colleges enjoy, that blank check being the money loaned nearly without restriction to students who don't get a choice in paying it back. There needs to be restrictions to which schools they can be used at, the failure rates as some "universities" are just abysmal.
So set limits to what course can cost, the government already does it with medical services so their is more than enough justification. You are free to choose not to accept government loans and go where you want and learn what you want. I am quite sure a lot of schools would suddenly have costs in line with the requirements.
Actually, this kind of thinking in itself is a problem. If there is any deterrence in social mobility where potential value does not get the chance to become true value then by all means - address that deterrence. But taking a political standing questioning the moral for current state where (although resourceful) potential value becoming true value? This is wrong. Humanity getting better (through non-destructive ways) does not need justification in someone's eyes or qualification in some political doctrine's view, because it is in itself more important than any of these.
Caltech is unique in other ways - it's the only university with an honor system top to bottom.
https://news.ycombinator.com/item?id=8930360 links to this version of the story: http://www.economist.com/news/leaders/21640331-importance-in...
If you notice the a) compared to b) notice there are no graphs. ... read a bit more: B) has been re-edited down from print A) and re-purposed. I had to re-read both to see B) is a re-write. Even the sub-heading are changed. I do believe B) is an inferior version of A).
A) America’s elite: An hereditary meritocracy http://www.economist.com/news/briefing/21640316-children-ric...
B) America’s new aristocracy http://www.economist.com/news/leaders/21640331-importance-in...
I think that they make a lot of good points, and think it's a good article (I subscribe to The Economist), but also think it's primarily a political subject and discussion.
Turn that question around. What is society at large going to do for my children if I die today that I couldn't do better if I was living and directing my efforts toward them?
And to your second point, it's a chicken-and-egg problem. Because taxes are so vilified, we don't have the fiscal ability to take care of people as we should (in my opinion). If society at large had a form of basic income, that would answer your second point and one way to fund it would be to massively increase estate/inheritance taxes.
And regarding taxes as property violation, it's a very popular meme in the American Right/Conservative/Libertarian groups that "taxes = theft".