[ Music ] >> My name is Daniel Markovits. I teach law at Yale Law School and I am sitting in my study in New Haven Connecticut which is where I wrote a large part of The Meritocracy Trap. The book tries to articulate a systematic argument against meritocracy. That might not seem like it's a very promising thing to do. Meritocracy is almost literal common sense of our age. Who could object to the idea that people should get ahead based on their own accomplishments rather than, for example, their parent's social plans. But in fact, I argue in the book, meritocracy is not functioning as it was designed to. It is instead producing its own hierarchy, a new kind of aristocracy, only now based on schooling and degrees rather than breeding. Meritocracy does this in two ways. First, it turns out that elite parents who, themselves, achieved their wealth and status by competing and being successful meritocrats, had an almost unlimited taste and enormous talent for educating their children. And, they devote more resources to training their children than anybody else in our society, much, much more. And, because education works, that means that rich kids do better at meritocratic tests than middle class kids and poor kids. And, so when it comes time to decide who gets ahead by testing people, the rich kids get ahead. And, in this way, education has become the mechanism by which elite perpetuate their status down through the generations. Second of all, meritocracy has remade work in America. The people who got these fancy intensive educations and took fancy jobs at the top of America's law firms and banks and corporations, then remade the way their businesses produced their products or delivered their services to favor precisely the skills and training that the rich people themselves had. So what they did is, they took discretion and productivity and work effort and status and pay away from middle class workers, remade jobs so that a small number of super elite, I say super ordinate workers can manage a distressed and excluded mass of other workers and capture almost all of the income and status for themselves. The result of this is that the riches 1% of Americans have roughly doubled the share of national income that they capture of the past 50 years, and that, 3/4ths of this increase comes from the peculiar kinds of income that you get when you do the very particular jobs that super educated, super ordinate workers in America do today. At first, meritocracy was invented as a way to open up society to everybody. Because it's true that no group, no race, no class, no class no gender has a monopoly on talented ambition. And, the old aristocratic elite, to be blunt, was not very smart and not very hard working. And, so when you let people get ahead based on their own accomplishments, what you did is, you let a whole bunch of people into the elite who weren't admissible before, and you opened up society. And, that happened in America between 1950 and 1975 in a big way. But, what then happened is the wheel took another turn, and the new elite, the one I was just describing, the one that got ahead by doing so well on these tests, sort of pulled up the ladder behind it and trained their kids, as I described, in these extravagant ways and privileged its own children. And, so on the one hand, what you get is a massive exclusion of the middle class. It's almost impossible to get ahead in America today if you don't have a fancy education. And, it's almost impossible to get a fancy education if you weren't born rich. The typical American public school, for examples, spends $12,000 to $15,000 per student per year on educating the kids who go through it. The Forbes top 20 private schools in America spend about $75,000 per pupil per year, so 5 times as much. And, it's just very hard to compete if you go to the school that spends 1/5th as much with the kids who have the benefit of the incredibly elaborate education. So on the one hand, meritocracy excludes the middle class from meaningful opportunity. On the other hand, the kids who get this fancy education, they may get ahead but they're not flourishing either because to get this education requires that the kids work all the time, that they're constantly tested, that they have tutors, that they always have to be in the top 1% on the standardized tests. You know, the University of Chicago in 1995 or something like this, admitted close to 3/4ths of its applicants. This year it will admit about 6% of its applicants. Stanford will admit fewer than 5% of its applicants. That means that, even if you have all of this privilege, even if you get the fancy education, if you ever make a mistake, you're not gong to get into the college you want to get into. And so the elite is also oppressed by this system. Now the excluded middle class has no reason to have sympathy for the rich. But, the rich is not doing well. And, that will turn out to be very important when we talk about what we might do to unwind the kind of inequality we have because there's something in it for those at the top also. They're not benefiting from this system, even though they may think they are. The system that we've devised also makes our politics extremely dark and angry. And, it actually does so in a way that classic Marxist diagnosis of capitalism suggest it happen. So what I've just described, all this fancy education which only the rich kids can get and these jobs that only people that have fancy educations can get, is the quintessential case of structural exclusion. That is to say it's not the individuals in the elite who are responsible for doing well and it's not the individuals in the middle class who are responsible for not getting into Harvard. It has everything to do with cast and social structure. But, the ideology of meritocracy tells those at the top, no, no you've earned it. So people in the elite don't think they're socially responsible for others. And, it tells people in the middle class who got excluded, if you'd been a little smarter, if you'd worked a little harder, if you'd tried a little better, then you would've succeeded. So it's your fault that you didn't succeed. So what meritocracy does is it disguises structural hierarchy and inequality as individual responsibility. And, that makes an elite smuggly believe it's entitled to what it has. And, it makes the middle class extremely angry and resentful because it turns the anger that it feels on being told you don't measure up both inward against itself as a form of self-destructive anger. That's what we see in the deaths of despair associated with the opioid epidemic for example. And outward at others in a form looking for other scapegoats. That's what we see in nativism and populism. And, so both those movements are in fact expressions of the original sin of meritocratic equality, inequality. One of the things I did in writing the book is I wanted to pick two towns in America that are sort of emblematic of the sort of equal middle class economy and society that America had in 1950, 1960 and the extremely stratified society and economy that we have today. And, so I picked Palo Alto California and Saint Clair Shores Michigan. Here's an interesting thing about those two towns, in 1960, they were roughly equally prosperous. They felt a little different. So you know, Palo Alto had the Grateful Dead. Saint Clair Shores had American style rock and roll not hippie culture. But economically, these were both prosperous middle class towns without a lot of people in them and everybody was doing well. Also in 1960, Saint Clair Shores delivered a landslide for Kennedy, Palo Alto went for Nixon. Now fast forward to 2016 and Saint Clair Shores is not a poor community. It has a poverty rate that is lower than the U.S. poverty rate. But there's nobody really rich there. And, it's not growing. There are not new businesses or new industries. And, it's very much living on the accumulated wealth of the mid century economy. It doesn't have a particularly high percentage of college graduates, it has a relatively low percentage of professional school graduates. It delivered a landslide for Donald Trump. Palo Alto on the other hand has become one of the riches places in the world. It has many, many more times the share of college and professional school graduates of the average of American city. It's housing prices are a large multiple of Saint Clair Shores' housing prices. And, it went for Hilary Clinton by something like 85% to 15% in the election. So we see how the two towns have separated from each other. And, the reason is very much what I describe in the book which is that Saint Clair Shores was built on mid skilled middle class jobs. In 1955, if you graduated high school in Saint Clair Shores, you could take the bus down into Detroit, you could get a unionized job working for a Big 3 auto manufacturer. And, if you worked hard and were relatively talented, by the time you were 50 you could be a tool and die maker making the equivalent of $80,000 a year today plus benefits. Today, those jobs are gone in Saint Clair Shores. And, what has replaced them? What's replaced them nationally is the jobs that you see in places like Palo Alto where you work for Apple or Google or the big venture capital firms that fund Silicon Valley. And, those are jobs you cannot get with a high school degree. Those are jobs you can't even get with a college degree. Those are jobs that you get with a degree from Harvard or a degree from Harvard Business School, or for that matter from Yale Law School. And, that's a much narrower slice of the population. And, at places like Harvard and Yale, there are more kids whose parents are in the top 1% of the income distribution than the entire bottom half. So the method of prosperity that Palo Alto generates is one in which the rich get richer across the generations and Saint Clair Shores stagnates and gets angry and vote for Donald Trump. If you want to understand why inequality has been growing so dramatically in the United States, and everybody agrees that it has and everybody agrees that the increase comes at the top. So what's been growing is the share of the 1% that the richest 1% of households get. You have to figure out what the cause of that is. And, there are two causes. One cause, which is one that's gotten a lot of a attention, is the shift of income away from labor and towards capital. So this is a shift of income away from people who work and towards people who own things. And, that shift is real. It's hard to measure for a variety of technical reasons, which we could talk about if we had more time. But, the biggest plausible measure of that shift is roughly speaking 9% of national income. The richest 1% of households have about 1/3rd of the capital. And 1/3rd o 9% is 3%. So that means that the shift of income from labor to capital accounts for about a 3% increase in the top 1%'s income share. But, the actual increase is about 12%. So the remaining 9%, the bulk, 3/4ths of the growth of the riches 1%'s national income share comes from something else. It comes in the form of a shift away from mid skilled labor and towards elite super skilled labor. So for example, a doctor, cardiologist used to make maybe 4, 5 times what a nurse makes. Today a doctor makes maybe 10 times what a nurse makes. A lawyer used to make maybe 5 to 10 times what a legal secretary makes. Today a partner at a law firm makes 10 to 20 times what a legal secretary makes. A CEO used to make maybe 30 times what a production worker makes. Today a CEO makes 300 times what a production worker makes. And, a big time banker today makes about 1,000 times what a bank teller makes where as the banker used to make maybe 50 times what a bank teller makes. Now all of these people I've described; the lawyer, the doctor, the CEO, the financier, those are people who, in some sense, work for a living. They don't own their clients or the companies they manage or the money that they distribute in the bank. They work for a living. But, they work in a way that gets them incredibly, almost obscenely high incomes. And, that's what drives inequality. And, one last thought about this, which I think is important, if one wants to figure out what to believe, which is the story that the culpritive capital is very convenient for elite intellectuals, for journalists, for professors, for writers. Because this group of people, we're not capitalists. And, so that story enables us to say we're innocent bystanders to a harm that's done by people richer than we are. But, the story I'm telling, which is that the driver of this inequality is elite labor and the institutions that certify and train elite labor. This is a story which puts responsibility on the broad professional class, on the people who work for the elite newspapers, television stations, who teach at elite universities, who work of fancy law firms. That group of people, which is the type of people who tend to consume books about inequality. And, they are, I include myself, so I say we are at the core of responsibility for what's gone wrong in the country. You know, writing this book was important to me for two reasons, one having to do with my past and one having to do with my present. With my past, I come from relative privilege. My parents are both professionals. But, I went to public schools in Texas to what, you know, not to fancy suburban public schools, to what would I guess now be called urban public schools. And, I went to school with a lot of kids who were obviously just as capable as I was and the kids I went to law school with were. And, if you go to school, you know that because you took the algebra test and they got a higher score than you did. So it's pretty obvious that they were just as capable as you were. But, those kids now are not partners at major law firms and are not making huge incomes and are not as able to put their own children through fancy private schools as the people I went to law school with. And, I was interested in figuring out structurally what produced that difference and what forms of training and work and transmission across generations of privilege produced that? So that's one reason why I was so interested in this book. The other reason had to do with my present, which is that my students at Yale Law School have changed a lot in the past 15 years. Fifteen years ago, they were privileged, they knew it, and they were pretty happy. They felt like they'd won the lottery and they were going to inherit the world. Today, their privileged, they know it, and they are anxious, stressed, in many ways quite miserable. And, I was interested in why? And, I think the reason why is that the generation that is in law school now is the first generation of elite kids who have spent their entire life in this system. And, what I see anecdotally is confirmed by data. If you look at elite university studies of mental health services, 50%, 60%, 70% of students at elite universities say they need mental health services. If you look at studies of high school students at elite high schools, there are studies at elite high schools would suggest that over 1/2 and as many as 3/4ths of the students at those high schools suffer severe, moderate to severe symptoms clinically of anxiety or depression. If you look at rates of drug or alcohol misuse in elite students, they are very high. And, that, I think, has to do in the way in which this system puts pressure on the elite as well as excluding the middle class. And, so that's another reason why I was interested in this book now. So I think the greatest ingenuity that a society can have is not technical or technocratic. Not the ability to invent a better transistor or a faster microchip or a better piece of code, those things are important. But, the greatest is human and moral. How do you find a way to build a set of ideas that can draw a broad commitment to making the society better? And, the reason I begin with this thought is that the situation we find ourselves in now is really dangerous. If you look across all human history, across all space in time, all of human experience, and you ask what has happened to societies that have allowed income, wealth, privileged to be as concentrated as the United States has today? And, I should say, income and welfare is as concentrated in the United States today as they were in Imperial Rome, that's how concentrated they are. If you look across all of space in time there's really only one example of society that became so top heavy and didn't end up unwinding through either succumbing to an internal revolution or losing a war. And, the only example is the United States in 1929. So there's a sense in which we have built ourselves or dug ourselves a very deep hole. But, there's also a sense in which there's a kind of a vibrancy, a willingness to try things, a generosity of spirit and experimentalism that is, I think, distinctive to the social and political culture of this country that makes it possible that we can get ourselves out of it. And one way we get ourselves out of it is by forging a coalition between the working class and enough of the elite in which the working class says look we need a fair economy, the middle class also. We need an economy that has good jobs for everybody. And, that means the rich have to give up some privilege and some wealth and some power. And, we need to re-balance work and school so that we have much less hierarchy in school and mangers have less power over workers at work. And, we know what policies would produce this. The problem is getting the political will to do it. And, on the other side of the coalition are enough of the rich who realize that the system they have now is not benefiting them either, that, while, if you get rich by inheriting a factory or land it's a great thing to be rich because your wealth makes you free. If you get rich on the back of your own intense training and labor, your wealth does not make you free. Your wealth makes you into an asset manager whose portfolio contains you and leaves you alienated and working all the time at tasks that you don't especially value because that's the only way to extract income from your wealth. And, so if the rich gave up some of their material advantages, they'd get back their authentic freedom. And, that's a coalition which could come together and change the structure of our society. And, I think we are starting to see it come together in our politics right now. We're starting to see a larger number of people who have privilege say this system is not good for anybody. And, we are starting to see a larger number of middle class people saying the problem is not immigrants, the problem is not people of color. The problem is the structural economic power and privilege that a very small elite has captured and we need to dismantle that. And, that's going to be the task of our society for the next 25 years. [ Music ]