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Markets and communities: the social cost of the meritocracy

Published online by Cambridge University Press:  07 July 2021

Jean-Paul Carvalho
Jean-Paul Carvalho*
Affiliation:
University of Oxford, Oxford, UK
*
Corresponding author. Email: jean-paul.carvalho@economics.ox.ac.uk
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Abstract

Critiques of the meritocracy have centered on its narrow definition and biased assessment of merit, its stigmatization of the unsuccessful, and excessive competition. This paper identifies a different mechanism that could have pernicious social and political consequences. Economic mobility sorts people based on certain ‘productive’ traits, separating them into classes, and thus alters social externalities. This sorting–separation–externalities mechanism can produce between-class polarization in social outcomes (e.g. alcoholism and drug abuse) and worsen aggregate outcomes over all classes, consistent with rising ‘deaths of despair’ in the United States (Case and Deaton, 2020, Deaths of Despair and the Future of Capitalism. Princeton University Press). When traits are endogenous, transition out of a caste-based society produces an initial burst of economic mobility which dissipates over time. Thus, a dynamic meritocratic society devolves into a static class-based society. I set out an alternative model called the ‘experimental society’, which is less susceptible to these problems.

Keywords

Austrian economicscultural evolutionmeritocracysocial economicssocial mobilitytime preferencesZ13P00
Type
Symposium on Institutional Analysis, Market Processes, and Interdisciplinary Social Science
Information
Journal of Institutional Economics , Volume 18 , Issue 3 , June 2022 , pp. 501 - 519
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of Millennium Economics Ltd.

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