Meritocracy’s Broken Promises: A Selection from Daniel Markovits’s The Meritocracy Trap (2019)

“The academic gap between rich and poor students now exceeds the gap between white and black students in 1954, the year in which the Supreme Court decided Brown v. Board of Education. Economic inequality today produces greater educational inequality than American apartheid once did. Educational inequality separates the rich not just from the poor but also, increasingly, from the middle class. The academic achievement gap between rich and middle-class schoolchildren, for example, is now markedly greater than the achievement gap between middle-class and poor children. By the time children apply to college, the differences are greater still and focus more specifically on the exceptional performance of elites. Rich children now outscore middle-class children on the SAT by twice as much as middle-class children outscore children raised in poverty. The elite out-train the middle class by so much that depressingly few children from non-elite households overcome caste to perform at elite levels. Only about one in two hundred children from the poorest third of households achieves SAT scores at Yale’s median.

These unequal patterns arise inexorably through meritocracy’s inner logic. Meritocracy’s promise of equality—the theory that anyone can succeed simply by excelling, because meritocratic universities admit students based on academic achievement and employers hire workers based on skill—proves false in practice. The emphasis on excellence, whatever its motivation in principle, in fact produces admissions competitions and labor markets in which people from modest and even middle-class backgrounds cannot succeed. Exceptional cases always exist, but in general, children from poor or even middle-class households simply cannot compete in the battle for places at elite universities with rich children who have imbibed massive, sustained, planned, and practiced investment from birth or even in the womb. Workers with ordinary training, in turn, cannot compete with the immensely skilled and enormously industrious workers produced by the elite training.

These patterns, taken together, dramatically confine social mobility. Only one out of every hundred children born into the poorest fifth of households, and fewer than one out of every fifty children born into the middle fifth, will ever become rich enough to join the top 5 percent. A poor or middle-class child therefore faces longer odds against climbing the income ladder in the United States than in France, Germany, Sweden, Canada, Finland, Norway, and Denmark (and mobility in the last four of these countries more than doubles, and in some instances triples, that in the United States). Absolute economic mobility is also dwindling. The odds that a middle-class child will out-earn his parents have fallen by more than half since midcentury—and the decline is greater among the middle class than among the poor. . . .

Middle-class stagnation, elite prosperity, and rising economic and social divisions all fit together, as meritocracy transfers wealth and privilege dynastically down through the generations. Each turn of the meritocratic ratchet drives inequality inexorably forward, and these effects, taken together, dominate rising economic inequality overall. The early meritocrats harbored false hopes. Meritocracy has become the single greatest obstacle to equal opportunity in America today. . . .

Private schools and colleges are taxed as if they were charities, devoted to the public interest: alumni donations are tax-deductible, and schools and colleges pay no taxes on income from their endowments.

These practices make meritocratic education in effect a tax shelter that only elites can exploit. Where parents’ incomes and educations determine children’s academic achievement, even purely meritocratic admissions fill elite schools and colleges with students whose parents also have elite degrees (even if not from the precise schools that their children attend).

Although elite schools and colleges are taxed as public charities, meritocratic inequality makes them functionally into exclusive clubs. The tax benefits that they enjoy are meritocratic analogs to the allowances that aristocracies once gave to princesses and princes. Middle-class families pay for elite educations that their own children will never receive.

The tax shelter, moreover, is massive. The meritocratic inheritance, for its part, transfers roughly $10 million untaxed to each rich child. And in a recent year, Princeton University’s tax exemption amounted to a subsidy of $105,000 per student, compared to public education spending of $12,300 per student at the State University of New Jersey at Rutgers and $2,400 per student at Essex County College in Newark. (Numbers like these lead cynics to call Harvard, Yale, and Princeton ‘hedge funds with universities attached.’) . . . .

These facts provide government with enormous leverage over elite schools and universities, including even—indeed especially—over the richest private colleges. (Princeton has in recent years derived as much as four-fifths of its total revenues from tax-free endowment income and tax-deductible alumni donations, and the top twenty universities on average derive a third of their revenues from these sources.) Reforms should use this leverage to break up the club, insisting that schools and universities should be taxed as charities only if they actually function as charities—that is, openly and inclusively to educate the broad public.

There are many ways to go about this. But the best is the most direct.

First, private schools and universities should lose their tax-exempt status unless they draw at least half of their students from families in the bottom two-thirds of the income distribution. And second, schools should be encouraged (including through public subsidies) to meet this requirement by expanding enrollments.

Together, these reforms would exchange meritocracy’s exclusive, narrow, and profligately educated elite for an inclusive, broad, and yet still well-educated replacement. The reforms would spread the wealth that the meritocratic inheritance now concentrates, distributing ‘elite’ education across a wider population and at the same time improving education generally by reducing the strain on resources outside the elite. In this way, they would dramatically shrink the educational gap between the rich and the rest.

The reforms’ two prongs fit naturally together, as the second provides a road map to realizing the first. Elite education has become so extravagant that schools can afford to grow; and the schools that would need to grow the most (because their current students skew most toward wealth) are also the richest. The Ivy League could meet the condition for retaining not-for-profit status by doubling enrollments (drawing new students mostly from outside the elite) and still spend about as much per student as it did in 2000. Colleges generally could increase their enrollments by half and still spend roughly as much per student as they did in 1970. And private schools could double their enrollments and still have better student/teacher ratios than their public counterparts. Public funds paid to subsidize additional students would lend further support to already manageable growth. Certainly, the changes required today to make elite education inclusive are no greater than the revolution that elite schools and universities undertook by embracing meritocracy in the 1960s, and that then triggered meritocratic inequality’s rise. Institutions once transformed may be transformed again.

Populists are already taking aim at private schooling, especially at elite universities (which they attack as hotbeds of liberalism and ‘political correctness’); and their efforts are beginning to succeed. After years in which similar proposals died in committee, a modest excise tax on the incomes of the very richest private universities became law as part of the most recent tax reform. Populists who say that colleges and universities are bad for America may have narrowly political motives, but a clear-eyed understanding of meritocratic inequality shows that they are not wrong.

Elites, for their part, should also support education reform. For all the financial subsidies that it bestows, the current regime leaves elites battered, bruised, and vulnerable. Extreme meritocratic competition imposes human costs on rich students, associated with the grinding and dehumanizing admissions tournament, that are increasingly unbearable. And the rigor of the tournament increasingly means that no child, no matter how elite her parents, is safe from elimination.

Reforms that made education inclusive by expanding elite student bodies would not require displacing anyone from the incumbent elite and would even (both inevitably and by design) modestly increase the number of rich students who get into competitive schools. (In this respect, the reforms model themselves on the reforms that brought women into elite universities by growing class sizes, so that adding women did not require excluding men.) Even a small increase in the number of places available to rich students can dramatically relax competition among rich applicants. And the increase to authentic freedom that the new breathing room affords is massively more valuable to elites than any associated decrease in the income or status conferred by degrees. . . .

The old aristocrats were vulnerable to meritocratic competition because they bred underachievers, but the new meritocrats raise overachievers and therefore dominate meritocratic competition. The principal source of the skew toward wealth among college students, and especially among students at the most competitive colleges, is academic rather than narrowly financial or even cultural. The skew toward wealth does not reflect a breakdown of meritocracy so much as meritocracy’s triumph. Towering educational inequality reveals the inner logic of meritocratic inequality in its dark action.

Finally, the meritocratic approach to dynastic succession confers one more advantage on the elite, which distinguishes the meritocratic inheritance from its aristocratic predecessor. Whereas inherited physical and financial wealth famously breeds temptations toward profligacy and therefore its own dissolution—hence the early-twentieth-century saying that a family might go from shirtsleeves to shirtsleeves in three generations—human capital resists being wasted by those who are given it. . . .

In all these respects, the meritocratic approach to dynasty building mimics the truly hereditary birthright aristocracy that for centuries dominated elite life. Education assumes the role in meritocracy that breeding played in the aristocratic regime, and superordinate labor takes on the role once played by hereditary landedness. . . .

The increasing monopoly that elite families exercise over pathways to income and status, and the increasing exclusion of not just poor but also middle-class children from elite training and thus also work, realize rather than retreat from meritocratic values: the dynastic character of privilege does not reflect the corruption so much as the consummation of the meritocratic regime.”—Daniel Markovits, The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite (2019)