In The Nation, Christopher Hayes has a brilliant article on the way that "meritocracy" inevitably turns into oligarchy, and what that means for our society today. Hayes's account of the transition from meritocracy to oligarchy isn't just about self-delusion ("I am on top, and I am superior, therefore we live in a meritocracy") but also about the way that those who move to the top cement their position by changing the rules. He relates this to the end of economic mobility in the US, the concomitant concentration of wealth, and the way that these factors were a harbinger of collapse in other societies.
In order for it to live up to its ideals, a meritocracy must comply with two principles. The first is the Principle of Difference, which holds that there is vast differentiation among people in their ability and that we should embrace this natural hierarchy and set ourselves the challenge of matching the hardest-working and most talented to the most difficult, important and remunerative tasks.
The second is the Principle of Mobility. Over time, there must be some continuous, competitive selection process that ensures performance is rewarded and failure punished. That is, the delegation of duties cannot simply be made once and then fixed in place over a career or between generations. People must be able to rise and fall along with their accomplishments and failures. When a slugger loses his swing, he should be benched; when a trader loses money, his bonus should be cut. At the broader social level, we hope that the talented children of the poor will ascend to positions of power and prestige while the mediocre sons of the wealthy will not be charged with life-and-death decisions. Over time, in other words, society will have mechanisms that act as a sort of pump, constantly ensuring that the talented and hard-working are propelled upward, while the mediocre trickle downward.
But this ideal, appealing as it may be, runs up against the reality of what I’ll call the Iron Law of Meritocracy. The Iron Law of Meritocracy states that eventually the inequality produced by a meritocratic system will grow large enough to subvert the mechanisms of mobility. Unequal outcomes make equal opportunity impossible. The Principle of Difference will come to overwhelm the Principle of Mobility. Those who are able to climb up the ladder will find ways to pull it up after them, or to selectively lower it down to allow their friends, allies and kin to scramble up. In other words: “Who says meritocracy says oligarchy.”
Hayes goes on to interview various Wall Street titans and hedge fund managers, and gets their own account of how they feel that they are innately superior -- the smartest guys in the room -- and how great it is that the nation takes its cues from them.