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The Meritocracy Trap - An Interview with Daniel Markovits, Yale Law Professor
What if everything we've been taught about getting ahead in America is actually a trap? Yale Law professor Daniel Markovits drops a bombshell by revealing how meritocracy—our cherished national myth—has become the very system destroying both the middle class and crushing even those who "succeed" within it.
Markovits takes us on a fascinating journey through the transformation of everyday industries. Remember when working at McDonald's meant having actual cooking skills? Today, those jobs have been de-skilled to button-pushing, while a small elite of food scientists earns millions designing pre-packaged meals. This pattern repeats across retail, finance, medicine, and law—middle-skill jobs vanish while a small group at the top commands astronomical salaries and those at the bottom struggle with minimal wages.
The most surprising revelation might be how this system harms even those at the top. Unlike aristocrats of old who could simply collect passive income from inherited wealth, today's elites must exploit themselves through crushing work schedules. They spend entire lives being evaluated, tested, and molded to market demands rather than pursuing meaningful interests. Their wealth comes at the cost of their freedom and fulfillment.
Markovits offers practical advice for navigating this broken system, suggesting that starting businesses or relocating to areas with greater social mobility might provide alternatives to the elite credential chase. He leaves us with a powerful insight: "We can't make social policy for exceptional people. We have to make social policy for the rest of us who are ordinary." In a world that increasingly rewards only the exceptional, perhaps that's the most revolutionary idea of all.
A few years ago, I walked through a Barnes and Nobles and noticed this book, the Meritocracy Trap, by Daniel Markowitz. Out of all the books I walked past, I'm not quite sure why this one in particular pulled my attention. Maybe it was this clever picture of a star trapped by a hook, or maybe it was a subtitle which reads how America's Foundational Myth Feeds Inequality, dismantles the Middle Class and Devours the Elite. But whatever it was, I felt this immense pull to pick up the book and start reading it. So I picked it up and read. The description in the back Part of it reads as follows Today, upward mobility has become a fantasy.
Jonathan:The embattled middle classes are now more likely to sink into the working poor than to rise into the professional elite, and even the rich adults who manage to claw their way back to the top are required to work with crushing intensity, are required to work with crushing intensity. All of this is not the result of deviations or retreats from meritocracy, but rather stems directly from meritocracy's successes. Today, upper mobility has become a fantasy. I sat on this thought for a while and reflected on the many instances in which I've heard friends, family and people in general say that the middle class is disappearing or that it's exceedingly difficult to get ahead. I thought about the yesteryears where, supposedly, one income could support an entire family. I thought about the days in my youth when I was told that college was a necessity for a stable life but, after graduating, learned that a degree was not sufficient. I thought about the way my mother broke her back to invest in my education so we can get ahead, and all my family who helped me finish school. What's interesting about this book is the way it chips away at this idea that ability and effort is all one needs to strive, and that the most successful people made it to where they are exclusively on their innate talent. Now, don't get me wrong. I strongly believe that no one does anything extraordinary without hard work, but it's important not to forget that no one is self-made. We all need help. The problem is that opportunity isn't afforded to everyone.
Jonathan:I sat down to read this book and two hours flew by. I was hooked. I bought the book and spent the next two months reading it, and even after finishing it I wanted more. So I reached out to the author for an interview and gracefully, he agreed. So I'm beyond excited to share this interview with you. The author, danny Markowitz, is a professor at Yale Law School and the founding director of the Center for the Study of Private Law. Before you listen, please take a moment to subscribe to the channel and share it. It helps me grow this platform. I hope you enjoy this conversation. Professor, let me just start by briefly defining meritocracy and please jump in and my definition is a little off or an incomplete, but I like to just define it in very simple terms. But meritocracy is a system whereby people receive economic and social benefits based off their accomplishments and effort and not based off their race, gender, class or their parents' wealth.
Daniel:I just want to say, yeah, that's exactly right, except one thing I don't know that effort independently matters. It's based on their accomplishments. I don't know that effort independently matters.
Jonathan:It's based on their accomplishments, and that's going to be important. That's going to be important later in the conversation, because you can try really hard, but if you don't have the support for your effort, you might not accomplish very much. And meritocracy is that it is a myth, partly because of what you just said, but it's a myth because those who receive these great economic and social benefits acquire them in many ways precisely because of their class and their parents' wealth. And let me just try to explain this in a very simple way using a hypothetical person. Let's say me.
Jonathan:Just try to explain this in a very simple way using a hypothetical person. Let's say so someone who becomes the head of a top law firm or management company got there because of special skills that he or she acquired during his many years of intense education, and he acquired these special skills at elite universities. But for him or her to get into this elite university, he had to outperform all of his peers throughout his entire academic career, and one of the reasons he outperformed many of his peers is because his parents invested tremendous amounts of money into his education by way of private schools and tutors as early as five years old. So, overall, a meritocracy is a myth because the most significant factor, in addition to some hard work, is that this hypothetical person's success is attributed mainly because of his parents' investment into his education. Now, is that a fair way of illustrating what a meritocracy is in a very simple way? I know that was super broken down.
Daniel:You know, that's great and that picks up, I would say, half of the reason why meritocracy is a myth. So it picks up the half that says meritocracy is not the same thing as equality of opportunity, and right, great. So the reason why so equality of opportunity says basically everybody has the same chance of succeeding and what determines how far you go or how well you do is just you, just how hard you try. And what meritocracy adds to this, which means it's no longer a quality of opportunity, is what we said at the beginning, which is that it's your accomplishments that count, not your effort. And your accomplishments are your effort plus what was invested in you. And, as you said in the story you just told so well, if one person gets huge amounts invested in them and another person gets very little invested in them then it's natural that the person who got all the investments is going to accomplish more, because education works.
Daniel:People are good at the things they're taught, and so when some people get taught a lot more than others, they're going to accomplish a lot more. And so one reason why meritocracy is a myth is that these enormous differences in investments mean that it's not equality of opportunity. It's, in fact, inequality of opportunity. It's a system whereby kids of rich parents do much, much better. The other reason why it's a myth, which I just want to get out there, is that the things that the people who do well end up being able to do so well, the things that we call skills in our meritocratic system, may not actually be valuable at all. So take the person who's the managing partner of a huge law firm. So that huge law firm makes all its money almost all its money in and around managing capital, managing great concentrations of wealth, either for individuals or mostly for corporations in the financial markets.
Daniel:And the skills that enable you to do a good job as a lawyer for capital would not be very valuable skills if we lived in, say, an agrarian society or if we lived in an industrial society. They're really good skills to have, only because we live in a highly financialized society, and that's a society in which there's a lot of inequality. So it turns out that the people who claim to deserve so much wealth and status because they're so skilled count as skilled at all only because there's a lot of inequality, and so the skill is a myth. The thing that they're so good at isn't actually socially valuable. It's just valuable when there's inequality, and that means it can't justify inequality. And that's the second way in which meritocracy is a myth, and that means it can't justify inequality, and that's the second way, in which meritocracy is a myth.
Jonathan:Well, definitely, thank you for elaborating on that, because one of the main things I want to touch on in this episode is exactly what these high skilled jobs are and what the particular skills are needed for them. And I want to do that for a number of reasons. Number one is I'm curious to know if these jobs can be performed by middle class folks with lesser skills, so to speak. And then, thirdly, I want to focus on the jobs, because I think what I really want to do is help us get through this entire moment, because, as I said earlier, what I find so fascinating about your book is that it bluntly and vividly lays out the economic system that we're in right now and the traps that most of us find ourselves in.
Jonathan:So I want to give our listeners just practical advice moving forward, although I do understand that you offer broad political solutions for this, and I think one of the best ways to get into this is by going industry through industry. Like right now, you just focus on the legal industry, but let's quickly go over into, like, the food services industry, because I really just want to show the development of labor markets and how the economy has evolved. So in your book you have a section in which you focus how McDonald's, our favorite fast food company, evolved from its inception in the 1950s to what it is right now in the 21st century, and I think that story beautifully captures how our economy has shifted and how middle class jobs have been replaced by lower skilled jobs and then higher skilled jobs at the top. So do you mind explaining that story about McDonald's to set forth yeah, great.
Daniel:So look. So McDonald's started as basically a way to standardize and quality control a typical diner. So you know you had short order cooks, and being a short order cook is actually a skilled job. It's not a super skilled job, but it's not. You got to have a lot of skill to do. I mean, anybody who's ever tried to say, just make dinner for a family of five realizes that you got to have timing. You got to stay on top of the order of things. You're going to need to know how to cook. You need to know how to take the tags that come in. You're not doing it for one family, you're doing it for 20 families. You need to keep track of the workflow. This is not something maybe you're a cook, I don't know but it's not something that I could do coming off the street successfully. I'd have to practice and learn and be the kind of person who was that, and so what McDonald's was in the beginning was basically a way of standardizing, that way of making food where all the food was made in the restaurant and you had skilled cooks. And being a McDonald's worker was a way up the ladder into the American middle class and the American upper middle class because these were skilled jobs. These were jobs that gave you training and then gave you real, meaningful advantage.
Daniel:Now what's happened over the past 40 or 50 years is that almost all of the labor input into making the food has been moved out of the individual restaurant. So super skilled, you know something between chemists and food scientists have figured out ways to produce hamburgers and fries and shakes and other things that people will want to eat, that don't actually require a skilled cook, that are pre-mixed and pre-prepared in such a way that the only thing that happens in the individual McDonald's restaurant is you open the packet, you put the thing in the machine, you hit a button, you wait till the buzzer goes off and you take it out. And so the production process of McDonald's has changed in such a way as to de-skill the worker in the individual McDonald's and to reduce actually the number of workers you need and replace them all with machines and then a small number of super-skilled workers who are the people who can design making food in this way and manage the very complex supply chains that you need in order to make food in this way. And so what that means is that the people who have those super skills at the top, who are food scientists and managers, get huge sums of money. The CEO of McDonald's makes $10 million a year. The CEO of McDonald's did not make $10 million a year in 1960. And so what you have is the de-skilling of the line workers and the up-skilling of the executive managers, because the technology of production has been transformed.
Daniel:We could talk about this example. This is the food example. We could talk about retail. We could talk about finance. We could talk about medicine. We could talk about finance. We could talk about medicine. We could talk about law, we could talk about manufacturing and, in field after field of the economy, that's the pattern that we've seen.
Jonathan:I see, let's get one more example on the field right now. We just discussed food services, but how about retail, for example? How is this happening in retail?
Daniel:Totally so. You know, as recently as 1970s 1980, most retail sales in America were still made by single branch stores. These were locally owned, and to be a retail worker in one of those stores was, again, a skilled job. Why, why? Well, you probably controlled stock as well as sales. You probably did ordering. You had to be able to keep accounts, you had to be able to anticipate your customers' demand. You had to be able to answer questions about the goods that you were selling to the customers. So you had a whole series of skills that you had to have, and these weren't the kind of skills you needed to go to graduate school or professional school for, but they were also real skills. You couldn't walk off the street and do it well, and in fact, the New York Times in the late 60s wrote an article saying that the problem with trying to hire unskilled people in retail is they can't sell anything.
Daniel:Now, what's happened since then is that retail has consolidated into bigger and bigger and bigger stores, big box stores, now online stores like Amazon, which have figured out how to sell things, how to stock things, how to do accounts, without requiring any particular skills from the line workers that they employ. Instead, again, it's managers and people who design algorithms that take suck all the skill out of selling. And Amazon has figured out a way to get its warehouses full of just the number of things it's likely to sell, to get its goods to you very, very quickly, to get a way of describing and evaluating its goods so that actually other customers help provide the expertise that the salesperson used to provide. Like it used to be, you went into a retail store. You'd ask the salesperson which of these do I want? Give them what I need?
Daniel:Now you go on to Amazon and they have this complicated system of customer questions answered and asked and reviewed and stuff. So the person who invented that system is a super skilled worker, whereas the retail workers in Amazon have been reduced almost to robots. The people who work in Amazon warehouses wear wristbands and belt measurement things that tell them exactly where to walk and where to move and how quickly and which box where to find things in the warehouse, and so they have again been de-skilled. And so again in retail, you had a system which was dominated by middle-class, mid-skilled labor the people who sold and managed single unit stores being replaced by a system which was dominated by middle-class, mid-skilled labor the people who sold and managed single-unit stores being replaced by a system in which a small number of super-elite workers and executives manage and dominate a large number of de-skilled line workers who are paid very, very little. And that's the system again, you see the spread right, the polarization of the workforce, and that's what's happened, as I say, in industry after industry after industry.
Jonathan:What I'm thinking about right now is this tension between efficiency and the greater good of our society. For example, while you were illustrating the McDonald's example, I'm trying to remember the last time I actually had McDonald's. It was a very long time, because I try not to eat fast food. So, although McDonald's has locations throughout the entire world, if I had the option of eating at a small mom and pop store, I always go to that mom and pop store. So right now, earlier, you mentioned that efficiency isn't the only measure that we should use when it comes to our economy right now, and the best example I can think of is my preference to going to the mom and pop shop as opposed to the more efficient McDonald's that can get my hamburger to me in a number of seconds, as opposed to, let's say, the mom and pop shop, who has to put in the labor to get me a meal. So could you speak more about how these high skilled jobs aren't necessarily that good for society, although they are highly efficient?
Daniel:Yeah. So first of all I want to push back a little bit. I'm not sure they're always that efficient, all right. So in some fields, like finance, like medicine, you know we have sectors dominated by super skilled workers and the best economic analysis of finance in America today suggests, for example, that it is no more efficient than finance was in 1960 when it was all mid skilled workers. If you look at American medicine, which is dominated by more high skilled workers than any other country's medical system in the world, you know we spend a higher share of GDP and more dollars per patient than most anybody else and produce worse outcomes. So it's not always even true that these systems are more efficient. But but the other part of this is to ask you know good for whom and in what circumstances? So if you look at, if you look at retail, for example, you know Amazon has been great for the American consumer.
Daniel:You know it, I can get something anything tomorrow and it's really cheap. On the other hand, it's been terrible for the American hand, it's been terrible for the American worker and it's been terrible for the American neighborhood. And of course, I'm not just a consumer, I'm also a worker and I live in a neighborhood, right. And so what's happened with this push towards local partial efficiency at the point of sale has had all these costs elsewhere. Because, you know, I can't get the old retail job anymore. I can't get a middle class job working in retail. If I want a middle class job, I need to go to college and get a degree, whereas that wasn't true when I could take a job as a stockist or store clerk in my local retail store, learn the ropes, become the salesperson or manager in that store and raise and feed a family based on my wages as a retail worker, right.
Daniel:And in addition, my neighborhood has become kind of hollowed out. Lots of the hubs of where we used to gather and see one another and be together in public have been destroyed, which is also a cost, right. So that even where these systems appear to be super efficient in the sense that they deliver the narrow good in question at a really low price. They take away all sorts of other benefits that the old system didn't, and I think many of us I mean you from your story about going to the mom and pop store, you know, restaurant me too. I would rather, you know, pay 20% extra to go to a store that's owned by the people who work there. Now of course I can afford to do that because I've got a job whose wage hasn't been depressed by the system, and so the system is self-reinforcing, because if all the workers just get paid the rock-bottom wages, then they can't afford to go anywhere else than the stores that charge the rock-bottom prices. But if people got paid more they could afford to pay more.
Jonathan:They could afford to pay more, which is why most people are forced to buy from Amazon, for example. So it seems like we're paying a steep price for two-day delivery, like the hollowing of neighborhoods, the depression of wages, and I'm not sure that this price is worth it, although on a day-to-day basis I have found myself ordering things from Amazon if I need it quickly. But then I ask myself do I need it that fast?
Daniel:Right. But the other problem is, I mean, you know, like I happen to live in a place where there is actually a hardware store two miles away, but there are lots of places where there is not a hardware store two miles away. So you know, if you want a hammer well, it's Home Depot or Amazon.
Jonathan:Yeah, there's no option. Right, right, there's no option. So what are you going to do? You've mentioned in your book how the workplace was more democratized. For example, at the middle of the 20th century, someone could begin from the mailroom and work their way up to the top, but then I think at around the 70s or 80s, that workplace training was effectively delegated to the universities. Could you speak more about that delegation of the on-job training in combination to student debt and the astronomical amount that we have right now?
Daniel:Yeah, so I guess the two parts to that observation that you made.
Daniel:The first is you know that this happened and how it happened, and it's really important to understand just how much training American workers used to get at work. You know this was true if you were a blue collar worker. You know if you worked for, say, one of the big Detroit auto companies, you could show up at 18, with or without a high school degree, and get a job. And then, if you had the capacity to learn and worked hard, you could get skills over the course of your career and you could end up being a tool and die maker, which is a highly skilled trade, and you could make in today's money the equivalent of $80,000, $100,000 a year, even without a high school degree, on the basis of skills that you acquired at work rather than at school. And if you were a white-collar worker, if you joined IBM as the lowest level manager, you could expect over the course of a 40-year IBM career to spend four full years in 100% IBM paid formal managerial training, so 10% of your time would be spent on being trained. Now, today, those numbers are down to zero. Today, basically no major American employer trains.
Daniel:White-collar workers are trained in universities and then business schools and professional schools, and blue-collar workers are trained in community colleges, outside of the workplace, and we can talk about why that happened.
Daniel:But but the consequence of that is obviously incredibly regressive, because the thing about workplace training is that you don't need to have savings to get it because you're earning while you're being trained, whereas university-based training you do need to have savings to get it because you need to be able to pay somebody else to teach you or, at the very least, to have some time when you're not earning because you're studying and you need to be able to sort of make the float of that time.
Daniel:And if you don't have any money, how are you going to do that? And that's that's even harder when universities give their credentials in big chunks, you know, like the two-year associate's degree, the four-year BA, and to get to the student debt part of this. The student debt is one of the ways in which people who don't have means pay to get this training. But it's a risky proposition, especially for people who don't finish the degree, because one of the big problems with its being a four-year degree is, if you make three and a half years or 3.8 years, you know the employment value to you of that is almost zero. You got to finish the whole course to get the benefit. And if you look empirically at student loan defaults and who is buried under student debt, the two groups that are really having the toughest time of it are one, people who didn't finish.
Daniel:And we are very bad at supporting people to finish college. So our rates of completion of college are much, much lower than, say, France or Germany or even England, and two people who go to for-profit colleges. The second is like just a scam. That's kind of, in a way, it's an opportunity created by what we're talking about, but it's not at the core of what we're talking about. Like someone has figured out a way to cheat people. But the first part the first part about this need to finish the degree that's really at the center of what we're talking about, which is that when you move training out of the workplace, you increase the risk of getting trained and make it really hard for people who don't have the security to bear that risk to do well in the system.
Jonathan:Right, and the one point six trillion dollar amount of debt that we have right now in the country makes a lot of sense when I consider all this. In fact, I'm actually working on a book right now about the economics of student debt cancellation about the economics of student debt cancellation. Hopefully I'll release at some point in January, but that's exactly my analysis that folks who don't finish or who go to for-profit colleges are the ones that suffer the most.
Daniel:I would love to see the book when it comes out. By the way, If you shoot me an email and I'll pick it up.
Jonathan:Oh, I really appreciate that. I just started working with an editor, so it should be done soon. Thank you very much for that. So let me quickly shift over to the third part of your book, which is that this meritocratic system also devours the elite. Now let me just say this Very few people have sympathy for people who are exceptionally wealthy, but what your book truly outlines is the trap that a lot of people find themselves in. You, as a professor at Yale, have a front row seat to the next generation of elite workers, and you have often mentioned how anxious and stressed they all are. The story of the banker or the law firm partner working 100 hours a week isn't remote. It's actually very common. So could you speak more about how this is devouring the elite and how this system doesn't seem to be seems to be hurting everybody? Essentially, according to what you say.
Daniel:So, first of all, let me just say something about your observation, which I think is right, is not a lot of people have sympathy for the rich, and of course they shouldn't. These are people who are making, you know, 100,000,000, $1 million, $5 million a year. They're doing just fine in a certain way, but I think it's worth focusing on them, for two reasons, though. The first is there's a difference between political sympathy and existential sympathy. Now, political sympathy is the kind of thing that gives the rest of us a reason to care and change. So we have political sympathy for middle class and working class and impoverished people who can't get their kids the schooling they need for the kids to have a stable, successful life, and what that means is all of the rest of us have a reason to change our system so that that these groups of people don't have these hardships. But but we don't have political sympathy for the person who's making five million dollars a year but oh no, has to work a hundred hours a week. On the other hand, at the same time, even that person has only one life to live, and their life is the whole of what they have in the universe, and it's entirely possible that their life, although in a certain sense they're rich and flourishing, is actually not that great from the inside. It may actually be pretty terrible from the inside, and one of the things the book describes is the way in which that life is pretty terrible from the inside, which is one you're working all the time. Two you've spent a whole life being evaluated by other people, you know, being inspected, tested, selected, trying to mold yourself to other people's standards, and even in your adulthood, the only way you can get the money that you so crave is by doing whatever the market will pay for. So maybe you're not actually really interested in banking law, but maybe you're interested in music or in architecture or in being a federal public defender. But if you want to make the money that you, with not totally irrational thoughts, think you will need in order to buy an education for your children that's like the education you had you end up going into these fields that are not interesting to you Now, and that's not a good life.
Daniel:Now why does that matter to the rest of us? Well, here's one reason why it matters to the rest of us when you have really concentrated privilege, it's incredibly hard politically to unwind it, because the people who have it tend to cling to it. Now, if we could make an argument that said to the people who have this privilege, you know what this actually isn't so good for you either. You know you're rich and you have all this status, but look at your life. Don't you think that you would be a lot better off if you had, you know, 30% fewer hours and 50% less income? And you'd still be plenty rich, and that would be better for you. And so, if this argument can become persuasive, it can become part of the toolkit that both political activists and policymakers can use to unwind the inequality that we have, and that's why I think it's an important argument.
Jonathan:You have a really interesting line in the book which says that the aristocrats centuries ago earned their wealth through inheritance, particularly inheriting land, and therefore please correct me if I'm wrong exploding the workers to generate wealth. Now it has shifted where the elite workers, their form of generating wealth is through their human capital and exploiting themselves, and I thought that analysis was quite interesting. Do you mind just sharing it briefly?
Daniel:Yeah, sure. So look, if I inherit let's say we're living in an agrarian society, or let's say, for that matter, we're living in an industrial society and I inherit land or a factory and I just own it. So the next thing I do is I hire a bunch of workers and I pay them less than they produce. So I mix their labor with my capital. I pay them less than they produce and I keep the difference, and so I am what Marx called a rentier. I rent out my capital to other people and I extract rents, and that's how I'm rich. And the key thing is I can do that and spend my time however I choose. Now, today, if the source of my wealth is not that I've inherited land or factories, but rather that I have this super intensive, super elaborate education which gives me a whole series of skills, the only way I can extract income from that wealth is by mixing it with my own labor. So I have to take my skills and work them, and so I have to work all the time in order to get my income. Now, I may still also exploit some other workers. So you know, you're a lawyer.
Daniel:How does a law firm work? Well, what partners do is they've acquired more human capital, more skill than they can mix with their own labor. And so they get associates. And so the partners generate the ideas, the litigation strategies, the contacts, the clients, the editing of the briefs, and the associates do the actual legwork and don't get paid their full product, and so the partners extract some of the associates returns okay. So so the partners are also being the frontier, they're also exploiting other workers, but the only way they can exploit the other workers is by working alongside them. See, the factory owner can just hire a manager and go to the south of France, but the law partner has to be there in the office, otherwise the associates aren't productive. And so the law partner works all the time too, and so they get.
Jonathan:They get super rich, but they're also working super hard, and that's a big difference between today's meritocrats and the old-fashioned aristocrats Right, and the part that I struggled with the book is when I compare the two systems, the aristocrats and the meritocrats. I would much rather have a meritocracy, for the following reason. Number one an aristocrat. The only thing that he had to do was be born lucky and to have the wealth transferred over to him. And there might've been some work here and there, although I understand they found the work to be degrading. The meritocrat, on the other hand, in order to earn his wealth, has to essentially work himself down to a pulp, work himself down to a grind. So if I were to compare these two systems, although I truly agree with you that our system needs to be changed significantly, it almost seems like this system is a much better alternative from what we were coming from. What are your thoughts on that?
Daniel:Yes, in a certain way the meritocrat is, I think, if you have my moral sensibilities, more admirable than the aristocrat, less corrupt, less depraved. In addition, unlike the old-fashioned aristocracy, meritocracy does not erect sort of categorical walls of exclusion to whole classes of people.
Jonathan:So the aristocrats?
Daniel:in every society. They were a clan, they belonged to the dominant race, the dominant religion, the dominant ethnicity, and so there are lots of ways in which, whereas aristocracy excluded all people of color, in the US, non-christians, non-protestants, catholics were excluded from the aristocracy in the US, the meritocracy lets some of these groups in. It lets some of these groups in. Given our religious and ethnic backgrounds, neither one of us would be part of the aristocracy, but we can be part of the meritocracy, all right. So in that sense meritocracy is better. But here's another thing that meritocracy does it produces enormous inequality.
Daniel:So the level of inequality and the level of concentrated wealth in the US today is much higher than it was under a much more aristocratic regime in the past and that inequality also actually harms not by categorical exclusion but just by demographic patterns many of the same groups who were previously categorically excluded. So here's a totally fascinating way to think about this with respect to race in the US and particularly with respect to anti-blackness in the US. So if you look at the racial income and wealth gaps in the US, the white-black income and wealth gaps in the US, the white-black income and wealth gaps in the US at the middle of the distribution. So for the median white man and the median black man in America, those gaps have not shrunk in the past 40 or 50 years. In fact they've sort of grown. On the other hand, if you look at the racial income and wealth gaps at the top of the distribution and so you ask, for example, if you take an African American man in the 90th percentile of the black distribution, where is that person in the white distribution? So there's a great paper by a man named Kerwin Kofi Charles, who's the dean of Yale's SOM business school and a co -author, which actually does this, and what they report is that, you know, in 1950, 1960, the elite earning black man in America was below the median of the white distribution. And we can see why that is because all of the high-paying jobs just had racial exclusions of African Americans. You know, you could not get a job at a major bank or a major law firm or a major hospital if you were black in America in 1960. And so that's why it didn't matter how high you were in the black distribution, you were still going to be in the bottom half of the white distribution, be in the bottom half of the white distribution.
Daniel:Today, somebody who's at the top of the black distribution is at maybe the 75th percentile of the white distribution or maybe the 80th percentile, if I remember the numbers right. And so that's the result of meritocracy, because that means that meritocratic people of color, meritocratic African Americans, can break into these elite institutions and they're still not doing as well as their white counterparts, but they're doing a lot better than they would have done under American apartheid in the 1950s. And so you have the two effects are going on at the same time. On the one hand, meritocracy makes it possible for us to have a black elite. Aristocracy made that impossible, and that's a good thing about meritocracy.
Daniel:On the other hand, meritocracy has increased the white-black income and wealth gaps at the middle of the distribution, right? So it's both a force for equality and inequality along racial lines at the same time, right, yeah, it's complicated. It's complicated, right. And the equality part, I think, is picking up on what you said earlier on when you said I kind of prefer meritocracy over aristocracy. Right, because it makes this whole thing. And then the inequality part is picking up on my critique of meritocracy, and both are true critique of meritocracy, and both are true.
Jonathan:I guess someone would say that although inequality is rising, the tide is rising all boats. I think that's what the mantra says, because right now what I'm considering is my iPhone, for example. You know, decades ago, if I wanted to have the function, the functionality of an iPhone, I had to carry about 10 devices. Now I can all have in the palm of my hands. So that seems to be innovation that has been benefiting everybody, although I take reservations with the invention of social media and other forms of deteriorating our mental health. But I would think most people some people, critics would say that there shouldn't be any problem with inequality because right now our standards of living have increased. In other words, if someone is making that much more money, but if I'm doing a lot better now than I was decades ago, what's the problem? I mean, how do you answer a question like that?
Daniel:First of all, the first thing is, the whole truth is always complicated, and so, yeah, we should not abandon the parts of meritocracy that lead to innovations that make everybody better off. But there are also lots of places at which what looks like an innovation that makes everybody better off maybe actually isn't. So let's think about health care for a minute. We have a lot of innovations in health care for a minute. You know we have a lot of innovations in healthcare. Some of them really do make everybody, or lots of people, better off, like being able to design these vaccines so quickly, which are saving huge numbers of lives.
Daniel:But then there are other kinds of innovations, like the innovation that allows a super skilled surgeon to replace my heart with either a donor heart or a mechanical heart. That looks like it makes people better off, and certainly it would make me better off if I needed a new heart. But all of the investment in that innovation could have gone elsewhere. It could have gone to investing in nutritionists, exercise therapists, nurse practitioners, public health workers who would figure out and help me live a life that makes me less likely to need heart surgery, and we're not very good at that in this country. We have epidemics of obesity and we don't know how to exercise the right amount, and those things collectively do much more damage to our national heart health than the surgeons can repair.
Daniel:And so yeah, innovation is good and skilled people are often innovators but we shouldn't blind ourselves to the ways in which the kinds of meritocratic inequality that we have give people incentives to innovate in ways that may not be the best directions of innovation for the society as a whole. You know, and some of this can be totally banal, so can I just tell just a simple example. Of course you know, a few years ago I was in England visiting my brother who lives over there. You know where they have a national health service and the national health service actually delivers medicine using many more non-doctors and non-specialists than our system does, but paying them middle class jobs. And I was in the pub with my brother and we were having dinner and the back of one of my molars broke off. It was Friday night, 7.30. So I go home, I call the National Health Service dental emergency hotline. They ask me can you get to the next neighborhood by 8.15? I'm like, yeah, I can do that. So I hop on a bus. I get to the next neighborhood by 8 15, where there's an emergency dental clinic which is staffed by two young men in t-shirts and jeans with a little NHS logo on it, neither of them dentists, but both trained mid-skilled workers. And they take a look at me and they say, look, we can't drill, we can't give you anesthesia, but what we can do is we can take some epoxy resin and we can shape a temporary crown for you and we can put it on your tooth and it'll last for a while. And so I was like, yeah, good, great, do that. So they do that. It takes them 15 minutes. They charge me, I think them 15 minutes. They charge me, I think, 13 pounds, 85 peak. I'm on the bus home by 8 45 to finish my beer. And that crown lasted three months right now.
Daniel:Now. Now, look, you know, for for twenty dollars I got the treatment I needed. Much. I could not have done that in the US for any sum of money. I would have had a weekend of pain and then I would have to pay someone thousands of dollars for the crown or whatever it was. If I didn't have insurance I would just have to live with it. And that way of providing medicine gave jobs to those two guys who were making middle-class wages, like they're not making US dentist wages. Us dentists make a lot of money, but they're making middle class wages. And so the whole system. The English had figured out a way to use mid-skilled labor to provide, at a reasonable cost, medical services that people needed. That's also innovation. It's like low tech innovation, but it's incredibly valuable innovation and we seem not to have it.
Jonathan:Right and it saved your teeth at that moment, so it's extremely valuable it was extremely valuable, right exactly, and it gave some people good jobs.
Jonathan:Right. So right now, what I'm thinking is how is that possible here in the United States? Because we have an ethos in the United States of wealth. For example, I'm looking at Forbes magazine and there's always a cover about Elon Musk or Bill Gates or any other uber millionaire, and as a society, we glamorize these individuals, we glamorize their work ethic and therefore most of us I'm not going to say most of us, but a large share of our population and therefore most of us I'm not going to say most of us, but a large share of our population strives for that. So, even if we can somehow politically envision how this is possible culturally, how do we move away from this American ideal of of riches for the lack of a better word, is that even possible?
Daniel:Yeah. So I think that's a really tough question. A really really tough question because it requires, I think, deep change at two levels. One is in our institutions and nurse practitioners and invest in social workers and exercise therapists and all nutritionists and those sorts of people, and we need to find a way, as a matter of our politics, to beat back the lobbies and special interests that protect the current elite, and so that's a kind of an institutional policy change. And then, at the same time, we need a kind of consciousness raising.
Daniel:We need to come to understand that the good life is not the life with the most, you know, it's not the life with the most income and wealth, but it may also not be the life with the most status or the most fame or the most Twitter followers or the most Facebook friends. You know, I don't know who, I think Bertolt Brecht said this, the German communist poet, that he wanted a life with no worker under me and no boss man over my head. Right, and so you know, it's the no worker under me, right? None of us wants a life with someone bossing us around, but lots of us want to be the boss, and that's what you're talking about and part of what we need to sort of come to understand, is that's not so good for us either. Actually, we can have enough wealth and enough power and enough status, and after that, more status distorts our lives and harms us. It doesn't help us.
Jonathan:Yeah, I mean it's going to take a seismic cultural change, which I often question, if it's even possible, but I think it's something that, as a society, we should question ourselves about. Let me ask you this, professor, because I don't want to move past the time that I asked for you. But you have a line in the book that says, indeed, starting a business permits economic success outside of elite institutions and without class betrayal. Small wonder, then, that the middle class ideal of prosperity is not to become a professional but rather to own a company. That line stood out to me because it gives hope for people who are not in the elite institutions and can live respectable lives that are earning money. So what advice would you give to someone based off that line moving forward in this system that we have to deal with?
Daniel:Yeah, I think that you know. The hard part is that there are two hard parts. One part is that there are large parts of the country where inequality is so entrenched and the elite is so powerful that it's really hard to do that, and so that's one real obstacle. The other real obstacle is that large businesses are increasingly acquiring the economic power to keep the small businesses from succeeding.
Daniel:We've got more and more monopoly any trust you yeah in sector after sector after sector and they are using that power. So, just as something that a lot of people don't know about, this totally shocking you Huge numbers of restaurant workers, fast food workers, sign covenants not to compete when they take their jobs at Taco Bell or McDonald's. I don't know that Taco Bell or McDonald's actually have them, but lots of these chains. There's a lot of work done about this. A lot of times they're not actually enforceable, but but people still treat them as enforceable. They suppress wages, they make it harder.
Daniel:If you've started taking a job in a big chain restaurant and you've signed a covenant not to compete, it's hard to open your own restaurant because now you're blocked, right, but so so. So my advice is, if you are outside of the elite, insofar as you are able, find places in the country, towns, areas, states where there are still these kinds of opportunities. You look at, actually, the, the. There's an economist called raj chedi who has a website on moving to opportunity which actually tracks social mobility in different cities and across the country and it's vastly different, vastly different.
Daniel:you know the the the most socially mobile cities in america have as much upward social mobility as the most socially mobile countries in Western Europe, and the least socially mobile cities and places in America have virtually no upward social mobility. And so you know, insofar as you are able to figure out what one of those places is and move there.
Jonathan:Yeah, right, get out the big, the big, the big sea, go to the small pond. Yeah, and also get not just the big sea, go to the small pond.
Daniel:Yeah, and also get not just the big sea, the small pond, but get out of these legacy entrenched cities with very dominant elites.
Daniel:That are low growth, low opportunity, and then, once you find the place where there's opportunity, then opportunity will become much more available. I mean, if there's a lesson of this book at the human level, it's that we can't make social policy for exceptional people. We have to make social policy for the rest of us who are ordinary. And what it means to be ordinary is that if there are no opportunities, you probably won't seize an opportunity, and if there are opportunities, you probably will. And so, rather than change yourself to try to become exceptional, try to find a place where there's opportunity.
Jonathan:When there's opportunity, seek the opportunity.
Daniel:Yeah.
Jonathan:Yeah, okay, thank you for that, professor Well's, we're coming around three o'clock and I don't want to take an extra minute of your time, but do you have any closing thoughts? And I just want to say for all our listeners that you should check this book out after listening to this episode. As I said, very few books give us a thorough analysis like this book, which is why I reached out to our guest today. But, professor marquis, do you have any closing thoughts before we log off?
Daniel:You know, Jess, it's been a real pleasure talking to you. I look forward to reading your book and I hope we can have another conversation sometime in the future.
Jonathan:Thank you so much, Professor. I will give you a heads up about the book. I really appreciate it.