Aaron Swartz reviews Twilight of the Elites, an indictment of meritocracy

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47 Responses to “Aaron Swartz reviews Twilight of the Elites, an indictment of meritocracy”

  1. chellberty says:

    Saw an interview of Chris Hayes talking about this book recently on The Big Picture with Thom Hartmann it was a good interview.

    http://www.youtube.com/watch?list=UUY8x1K2FMBw-jm-WCPbcHEg&v=h5wmpHU7GTo

  2. Jordan Pez says:

    People have a natural drive to survive.  When survival is determined by being in power then the same methods used to survive in the most primitive sense are used to maintain that power since ultimately it represents survival.

  3. Scurra says:

    Of course it’s worth noting that not all of the elite are created equal.
    Bill Gates seems to be actually trying to help the world to improve.
    The Koch bros. merely seem interested in trying to help themselves.

    Great review of what is clearly a very interesting book.

    • jimh says:

      And Bill Gates made his money, while the Koch brothers inherited a vast fortune.

      From the New Yorker*:
      David Koch joked about his good fortune in a 2003 speech to alumni at Deerfield, where, after pledging twenty-five million dollars, he was made the school’s sole “lifetime trustee.” He said, “You might ask: How does David Koch happen to have the wealth to be so generous? Well, let me tell you a story. It all started when I was a little boy. One day, my father gave me an apple. I soon sold it for five dollars and bought two apples and sold them for ten. Then I bought four apples and sold them for twenty. Well, this went on day after day, week after week, month after month, year after year, until my father died and left me three hundred million dollars!”

      * http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer#ixzz1yGGnonJP

      • Navin_Johnson says:

        Gate’s father co-authored a book on the subject:

        http://www.amazon.com/Wealth-Our-Commonwealth-Accumulated-Fortunes/dp/0807047198

        Gates, whose son cofounded Microsoft and became the wealthiest man on the planet, teams up with Collins, program director of the nonprofit United for a Fair Economy and Responsible Wealth, to explain why the government should continue to levy estate taxes on the fortunes of America’s wealthiest citizens (which President Bush, advocating its elimination, has provocatively called the “death tax”). In reviewing the tax’s history, the authors explain the Founding Fathers’ concern with maintaining conditions of equitability that would enable any American with sufficient ambition and perseverance to accumulate a fortune within his lifetime without creating a new aristocracy. The robber barons of the Gilded Age thwarted those intentions, so the estate tax was established in 1916. The tax was controversial from its inception, and the authors reveal how carefully orchestrated efforts by a handful of wealthy families, think tanks and PR firms drummed up public opposition in the 1990s, even though the tax didn’t apply to most Americans.
        Congress voted to repeal the estate tax in 2001. It’s bad enough, Gates and Collins argue, that the government will lose $30 billion a year over the next decade because of the repeal

  4. Recluse says:

    Paging Thorstein Veblen.  Your Leisure Class is ready…

    http://en.wikipedia.org/wiki/Thorstein_Veblen

    • Saltine says:

      Veblen’s ideas were in many way prescient, but the “leisure class” is not the same as the “1%”; the “leisure class” is something more like the upper middle class, at least as I believe he thought it. Since he wrote the book, the perqs of the leisure class have filtered downward to a degree. Basically I think he was describing a progression of industrial society and hinting at or somewhat intuiting consumer society. But consumer society is different than what he imagined, an intensification of his prediction.

      One thing I notice that really worries me is how many of the very poor are well-served by consumer society when it comes to distractions. Smart phones and cable TV and cars are readily available to people who cannot afford college or home ownership. I believe we do “bread and circuses” rather well, and part of that is the channeling of the critical political drive of Nietzschean ressentiment or Marxist class consciousness into consumerist one-upsmanship, so, in that, Veblen is pretty useful.

      • Ethan Taliesin Houser says:

        Right.  The bread and circuses are used to preserve the status quo.  And while we have more than ever before, it’s IN SPITE of our economic system, not because of it.  Thank technology for the benefits.

        Ironically, many in Veblen’s day had the idea that with industrialization, and advancements in technology, and more efficient production methods, that there would be more down-time for the working class. 

        Fewer work-hours needed to produce more goods and services should equal more leisure time for the workers themselves. 

        Problem is, under capitalism these things are only produced for profit, not for the benefit of society–and there’s not only competition between workers for jobs (keeping the wages low) there is also competition among the capitalists (making sure they hire the lowest wage workers). 

        Leisure doesn’t just mean “time off from work,” otherwise we would have a growing “leisure class”– AKA the unemployed. 

        That’s my two cents, anyway.

        • Jim says:

          Yeah, because we all know that poor people, deprived of nutrition and entertainment will instantly gain 10 points of IQ and $40k in annual income.

  5. duncano says:

    There are an awful lot of problems in the world that could be solved by redistribution of wealth. It’s odd that a widespread conception of capitalism is that it’s somehow a free system with endless opportunity. It’s called capitalism for a reason, people – because it rewards those who control the capital (means of production/wealth) in a perpetual cycle.

    • Marko Raos says:

      Exactly, capitalism is the very opposite of free opportunity/meritocracy. By its very definition. Every economic system is vulnerable to corruption however capitalism seems to have it built-in.

  6. Adam S. says:

    At a minimum, the estate tax system needs to be trashed. Change the rate to 90% at 1 million, and 95% at 10 million, then cap the max amount any one person can recieve in a will at 10 million.

    No more WalMart heirs. No more kids who never worked a day handed billions. You seen seen all money getting pissed away record breaking auctions at Christie’s and Sotheby’s. One of the WalMart kiddies just built a monsterous Art Museum with daddy’s money. In Arkansas.

    • jimh says:

      My thoughts exactly. Higher inheritance taxes like you describe have always served to redistribute wealth at the end of life, where it makes the most sense. And we used to have exactly that system in place not so long ago. People would still inherit lots of money and privilege, but it would help build a bigger middle again.

      The myth of meritocracy persists as the elite naturally rig the game once they’ve won. People born rounding third still somehow believe they’ve hit a home run. Of course those in power during our lifetimes have systematically changed the laws that would level the playing field for the next generations.

  7. Teller says:

    Been spending time in the Meritocracy of the Silicon Valley where the money flow is so high it seems a separate country (except for the traffic jams) from the one where unemployment is in the 8s.

    • Adam S. says:

      I would not call Silicon Valley a meritocracy. Facebook won the first round of the social network war because it had exclusive access to people with Harvard.edu accounts.

  8. Wreckrob8 says:

    We wuz robbed. Meritocracy is the means by which one elite widened its scope for the introduction of new blood to preserve itself. So, the game is changing again. Plus ca change…

  9. jameslosey says:

    If you’re in Washington, DC there is a discussion with Chris Hayes about his book tonight. (It will also be streamed online): http://newamerica.net/events/2012/twilight_of_the_elites

  10. puppybeard says:

    It looks like an interesting book. My initial feeling though, is that I want to see discussion of the myth of meritocracy.

    It was never in place by consensus, and the rules it leans on were never applied in the spirit they suggest, of everyone having the same odds.

    Where was the starting line of this competition, when everyone was in the same position? What everyone knows is that no such egalitarian state ever existed, but it’s a point that often seems missing from the assessment of this and related topics.

    • Navin_Johnson says:

      Regardless, countries like the U.S. see themselves as having a level playing field when they never have. We have had policies that seek to make for a more level playing field in the past.

  11. internalsyndication says:

    Premise #1: People work if/when paid for their time/effort.
    Premise #2: People exchange money for a good/service, only when they prefer the good/service more than the money in their hands.

    Use Premise #2 in the realm of owners purchasing employees’ time/effort to get Premise #1.  Extrapolate both of these ideas and what do you get? Meritocracy and wealth inequality… People who do/provide the most, earn the most. 

    Being rich does not mean being immoral. Giving money to your kids should bother no one other than the kids. You can’t balance the budget on the backs of “the rich” it’s a mathematical impossibility even if you take everything they earn…

    Justice is not equality. Life is not fair. Do the most with what you can, because that’s all you’ve got. And remember, money is not happiness. Some people sacrifice their life to earn a buck while others prefer free-time and distractions to mind-numbing work. Neither is more moral so long as no rights/laws are infringed upon.

    Why all the vitriol for “the rich”?  Envy is disgusting…  So a famous person writes a book, makes a movie, talks on the radio, owns a sports team, owns a business, gets exorbitant speaking fees… So what? Their success only goes as far as people want to consume what the other is providing. Don’t buy the book, don’t go to their movie, don’t listen to them, don’t buy their products… Sheesh… 

    “Let’s take other people’s stuff, because they haven’t EARNED it. No one should be able to give more than $X to their kids because, well, that’s just unjust. Someone should write a law, and take their money…”

    • Navin_Johnson says:

      People who do/provide the most, earn the most.

      Ha, that is simply untrue in many cases, never mind that the hierarchy that you so passionately defend often just rewards existing wealth with more wealth.  Rentier capitalism, shifting/controlling/conjuring up assets, none of this has to do with providing or “doing’, and that has become even more painfully obvious with the great recession. When bosses of failed banks get rewarded for their failures, do you think people are *angry*, or just “envious” as you suggest?

      There’s a reason that the poor in the U.S. mostly stay poor while the rich almost all stay rich, and it has nothing to do with “merit”.

    • andyhavens says:

      I don’t have anything against people having a lot of money. It’s when the tools for making more money and keeping more of that money are unfairly distributed to the wealthy that you have an issue.

      You say that people will pay X for a service “only when they prefer the good/service more than the money in their hands.” That’s true. But what if the good/service costs more than they can reasonably pay? If I can afford to hire a $500/hour tax attorney, I can keep a lot more of my pay, regardless of my salary. Problem is, very few people making $30,000/year can afford that. So someone with more money is in a position to keep it regardless of my ability/desire to pay for similar treatment.

      And buying the time/attention of the politicians who create the tax rules falls under the same condition. If I can write Rep. X a check for $5 million on behalf of a bunch of rich people who want Exemption Y continued… guess what happens to the group of people who can’t afford to write that check? Their exemptions go away (or never existed).

      There will never be a level playing field, no. “Them that has shall gets, them that’s not shall lose.” Money always will help. You can be a much more comfortable idiot with a lot of money. That’s fine. What we’re seeing, though, are systems put in place that discourage actual merit in favor of people who can pay to get around and change the rules that would normally encourage improvements.

      We’ve confused the size of the trophy with the requirements to do something trophy-worthy. It’s like the winners in a race getting to decide how to run, judge and reward the next race. I got no beef with people who win getting to enjoy the spoils… I just don’t want them to be able to redefine “win” forever and ever.

    • Saltine says:

      And here, folks, is someone whose thinking is so recidivist  that it predates Locke’s idea of a social contract: pre-modern, pre-enlightenment thinker, but post neoliberalism. “Thank you sir, may I have another? I am unworthy!”

    • Antinous / Moderator says:

      Wow. You’re a veritable meme machine.

    • PaulDavisTheFirst says:

      your faith that the rich and powerful got to be that way by playing by “the rules” is touching.

      economies exist because groups of people agree to trade with each other in various ways. the group sets the rules. the rules are there to make the economy work better for everyone, at least in the long run.

      you claim “Being rich does not mean being immoral”. hard to argue with that. but equally hard to argue with is the fact that there are plenty of people who ARE immoral and rich. i’m not envious of them – i’m angry with them.

      the current rich and powerful didn’t play by the rules. they changed the rules, and they broke the rules. the vitriol isn’t envy – its the same as the anger you would have at the person who broke into your house. the hypothetical “free market” landscape in which companies and individuals compete to offer services and goods has been dead for a long time, if it ever truly existed, and what you have now is a collection of rentiers erecting barriers to entry in the marketplace and in the legislatures.

    • jimh says:

      It’s all fine and good to say “life isn’t fair”, and “money isn’t happiness”. But I don’t think you understand that your beloved free market just doesn’t operate when the wealth is super concentrated at the top. And that’s what is forming now: a new aristocracy.

      I’m not saying people shouldn’t make a lot of money for their talent and hard work. I’m saying that they shouldn’t be able to change the rules so they can hold on to all of it, and block the next generation(s) from having the same chances.

      Once the credit runs dry and unemployment rises even further, you’d best read up on what the French Revolution was about. Hint: it wasn’t envy.

      • Teller says:

        When you keep reading just beyond the F.R., one tyranny replaces the other, at least in the short term. The tenets of an org, say, like the Meritocracy Party sound to me like they require an adherence enforceable only by a similar Reign of Terror.

        • jimh says:

          Oh, absolutely. I think the point is not to have an *absolutely* level playing field, but instead to keep measures in place to prevent us from getting to the point where it all falls apart. And I believe we are on track for just such a failure if we don’t do something to correct the course.

          I don’t think taxes are tyranny, however, so YMMV.

          • Teller says:

            Ok, I get you.

            (guy at piano bar plays Danny Boy) You know, these economic times are like a baseball team on a losing streak. Fingers point, tempers flare, wholesale change is demanded. Once we string together some hits, get a mini-boom going, put people back to work, recharge the housing market – all this desperate measure talk will be a thing of the past.

        • Navin_Johnson says:

          If only the heads of their aristocracy were still attached to say: “I told you so”

          • Teller says:

            The French believed a severed head functioned for moments after separation, so they’d quickly lift it by the hair and laugh in its face.

    • ultragreen says:

      internalsyndication: 

      “People who do/provide the most, earn the most.”

      This is wrong in so many ways, but it is characteristic of the simple black-and-white version of the world that many conservatives have.

      1) Money is merely an artificial creation of marketplace capitalism. It isn’t the same thing as the ‘value’ of what people provide or create. It also ignores the intrinsic value of human existence that predates capitalism, and that will ultimately postdate it.

      2) About one-half of the money that is ‘earned’ in a capitalist society doesn’t even come from labor — it is derived from ownership of some form of capital. A person can lie in a comatose state for years and still derive income from capital. This is not possible when someone derives income from their labor.

      3) Many people engage in forms of labor that are important to our society, and yet they never receive a dime from capitalism. Consider the role of women in our society in relation to the tasks of raising children and maintaining a home. Do they earn wages from the capitalist system while engaging in this important behavior? They do not. Does this mean that these domestic tasks have no value? Obviously this is untrue. Therefore, money does not equal value.

      4) Furthermore, some people are handsomely rewarded for activities that can be considered harmful to the broader society. Some international drug dealers are multimillionaires, and yet people assign a negative value to this means of acquiring wealth. Similarly, some people have become incredibly wealthy by owning gambling casinos, and yet there are many members of our society who think this kind of business causes more harm than good to our society.

      5) Capitalism rewards people for the mass-marketing of junk food, tobacco products, stock market manipulations, and other dubious items of commerce, and yet it fails to reward people for the finest creations of science and art because there isn’t any mass market for it.  Advances in quantum physics, astronomy, philosophy, etc., occur largely outside of capitalist markets.

    • ultragreen says:

      internalsyndication: “Life is not fair.”

      So what does this mean? Are you saying that people should meekly resign themselves to a never-ending horizon of economic exploitation? If life isn’t fair, then  perhaps the rich should meekly resign themselves to being heavily taxed by everyone else.

      internalsyndication: “And remember, money is not happiness.”

      A surplus of money does not provide much happiness, but a lack of money to acquire even basic necessities (food, shelter, health care) opens wide the door to a vast horizon of abject and unnecessary suffering.

      internalsyndication: “Envy is disgusting…”

      If envy is disgusting, then greed is also disgusting. And because the driving force behind capitalism is both envy and greed (two sides of the same coin), then it too must be disgusting.

  12. tomrigid says:

    I remember sitting in a bar in Eugene OR, and an old fellow sat next to me and ordered a beer. We got to talking, and it turned out we didn’t agree on politics or economics. I liked the Democrats, he liked the Republicans. He owned a business and, after growing up dirt-poor, had made his money through hard work and sacrifice. He was very angry that a “death tax” would be levied on his estate.

    I asked him how he made his money, and he told me, and I asked him how his customers paid him, and he told me, and I asked him what they would use to pay him if they didn’t have any money, because the wealthiest people had it all and gave it to their children. He hadn’t considered it.

    Then I told him that the only reason he was able to better himself was because some angry folks got together around the turn of the 20th century and instituted an estate tax. I told him that he could have worked his fingers to the bone for his whole short life before then and never made a dime of profit, because there just wasn’t enough money being spent. And at the end of it, I think I made him see the economy as something other than a morality tale with ants and grasshoppers.

    People can be convinced. You just need to get them away from their friends.

    • Tynam says:

       Thanks, tomrigid.  Ultimately, this is the answer – it’s an education problem.  Unfortunately, the bad guys control way too much of the information system.

    • jimh says:

      And the talk radio.

    • internalsyndication says:

      If there were, physically, too few dollars floating around for people to conduct business then those dollars would be more and more valuable as they became more and more scarce (ie deflation). That isn’t what’s happening now and so we shouldn’t seek to “liberate” those dollar bills from “that rich guy’s money silo” because us commoners think dollar bills are endangered. Bill Gates having billions is in no way a negative for me (and arguably for all humanity).

      Rich people don’t sock their money away in mattresses. Even it’s in the bank, that means that it is most likely invested.

    • internalsyndication says:

      You can argue that businesses are holding lots of cash assets right now, and it’s because businesses are scared for what future holds. If it were greed, then the cash would be pulled out. You could make the case that there isn’t enough demand, but the business owner’s I’ve talked to (less than 5, but still…) have all cited major concerns about taxation and fixed costs of having employees both being unknowns for the coming years. There are avenues for expansion, and cash on hand, but a swing of a few percent in year to year fixed costs can put a business under.

      I see a lot of spending being paid for with future dollars, and that seems pretty concerning to me (and a lot of others as well).

      • PaulDavisTheFirst says:

        your experiences with business owners are not in line with the reports of major media outlets surveys of the US business environment. NPR, Bloomberg, CNN and the WSJ have all done multiple stories on this claim about “regulatory uncertainty”, and its just bunk. businesses are not hedging because of “regulatory uncertainty”, certainly not the businesses that are likely to be a part of a significant reduction in unemployment.

        • internalsyndication says:

          I haven’t talked to any titans of industry, I was only saying that the few small business owners I’ve spoken with did tell me these things. One guy was looking to expand his dry cleaning business, but was worried. Another talked about expanding his body shop. Another was a small manufacturer hovering at around 80 employees. I’ve also spoken to numerous medical practicioners, but that’s a whole ‘nother ball of wax.

  13. llamaspit says:

    I like Chris Hayes, and excuse me for raising this point, but isn’t he using HIS show to flog his book? How is that different from Billo?

  14. internalsyndication says:

    The sports analogy is very close to someone deciding how to “distributing wealth” in a fixed pie.

    The use of the word “distribution” for nearly all of the economy is a terribly misleading term.

    Hypothetical: Tim works his butt off everyday, and volunteers for more hours whenever possible. Let’s also say Tim only has 1 kid. Say he averages 60hrs a week with overtime pay. Sam values home life more and only works 30hrs a week because he wants to be with his kids more. Sam,for the sake of argument has 4 kids.

    Over the course of their careers earning the same $/hr, based on prudent saving Tim could easily have hundreds of thousands of dollars more than Sam. How can anyone in their right mind refer to this as unequal “distribution” of wealth. More $’s in Tim’s pocket does not equal fewer $’s in Sam’s.

    I know this is a gross simplification, but I’ve made a lot of choices to go down the path of future higher earnings. I will one day be in that much despised 1%. How have my life choices taken anything away from anyone else (in terms of earning opportunities)?

    • tomrigid says:

      Interesting that you frame these facts (job, kids, etc…) as choices. How many of those choices were actually opportunities that you had because of the choices made by others? And how many people do not have such opportunities, either because their forebears didn’t make such other-regarding choices or because they also lacked initial opportunities?

      Nobody chooses to have poor parents, or to go to crappy schools, or to have bad role models, or to be a bit “off” in the head. Some people have a much harder time than others, for reasons that are entirely unrelated to their choices (though they may relate to yours). Before you measure yourself against another man you should climb down from your stilts and give him a hand up from the ditch in which he stands.

      • internalsyndication says:

        I understand that some are born with more than others, but I don’t think you can ever “correct” the injustice in who had what available to them systematically via some government program. Despite what you may think, I do in fact want to help the least among us (once I start earning), but I honestly don’t believe a system of government can (in a just way) correct for things like bad parents or having a moderately lower IQ. When is someone responsible for getting drunk regularly and when is it a disease that they should be relieved of the responsibility of earning a paycheck? 
        I’m an atheist, but the Mormon church helps a lot of needy individuals (even if they’re not Mormon) by providing them with food, helping them pay bills, and sometimes finding them work. I have heard second-hand that it’ll also withdraw that support if it’s being exploited. 

        So much of this is trying to boil down to “To each according to his need, from each according to his ability”, and I’m not trying to just shout this and say case closed. Just understand that going down that rabbit hole of an ideology has not worked well in the past. 

        • tomrigid says:

          We don’t need a government program. We just need the largest estates to pay their fair share. They never do so voluntarily, because of that autocatalytic mechanism so prevalent in our system, so we must have a claw-back mechanism.

          It’s nice that you are optimistic and ambitious. Those are healthy qualities in a young person. But don’t make the very common mistake of extrapolating from your experience to the general case, because 300 million people (to take the US example) will defeat your expectations. Morality, like microeconomics, scales unevenly and with funky results.

    • atimoshenko says:

      The objection you raise is exactly what makes the problem tricky. Inequality of outcome (good) need not lead to inequality of opportunity (bad), but, given human nature, it often does.

      I see no problem with different people making different choices for earning different incomes. After all, different people have different preferences (requiring different balances between income and leisure to optimally fulfil), so a one-size-fits-all approach makes no sense. Someone who enjoys hiking in the woods would be better off making different choices from someone who enjoys collecting watches.

      The problem is that income generating capacity does not end with choices. It’s not only “I want to make more money, so I will work until 10PM each day” or “I want to make more money, so I will get a PhD” or whatever else. In an advanced economy (and taking luck out of consideration), the ability of a person to generate and/or capture value is a product of talent x effort x tools. Of course, already captured value can be used to acquire more/better tools, leading to the autocatalysis described. Given enough money, one stops needing anything other than money to make money (since one now has the power to capture and extract value being generated by others). As privilege rises, it becomes increasingly easier to keep than it is to earn (so no more equality of opportunity), with most efforts then being spent competing for positions than generating value at those positions, and economic structure becoming rent-seeking and extractive. Depending on how one deploys one’s earnings, one’s earning money today can become a way to diminish another’s ability to earn money in the future. Given enough accumulation, a small group can monopolise access to productive assets, with the great, unwashed masses then having to beg them for a turn – a few own everything and everyone else in a slum… it’s exactly what happened during feudal times, and exactly why economic growth at that point was close to non-existent.

      Put simply, it is a difference between income inequality and wealth inequality. Person invents something smart and makes a ton of money – great. Person then uses that money to cement his position (looking at other, just starting, inventors and using his factory to quickly copy and perfect their ideas before they are able to do so in their garage) – not so great.

      So, no problem with income inequality provided inequality in de facto control over productive and/or fungible wealth is low. Of course, without such wealth inequality, I strongly suspect that the scope for income inequality – the scope for income as determined by CHOICES – would be a hell of a lot lower than we see today.

      Why did great fortunes in America used to be made at the frontier (and are still made at innovation frontiers today)? Why was America-as-frontier so attractive to Europeans? Because frontiers were too far for established wealth to extend its dominance to. Greater equality of wealth then made for greater equality of opportunity, greater progress, and greater growth.

      • IronEdithKidd says:

        You wrote an excellent comment here, too bad it’s directed at a young libitarian.  It’s like talking to a brick wall - very dense, and completely immovable.

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