America’s Elite: An Hereditary Meritocracy

http://www.economist.com/news/briefing/21640316-children-rich-and-powerful-are-increasingly-well-suited-earning-wealth-and-power

America’s elite

An hereditary meritocracy

The children of the rich and powerful are increasingly well suited to earning wealth and power themselves. That’s a problem

“MY BIG fear,” says Paul Ryan, an influential Republican congressman from Wisconsin, is that America is losing sight of the notion that “the condition of your birth does not determine the outcome of your life.” “Opportunity,” according to Elizabeth Warren, a Democratic senator from Massachusetts, “is slipping away.” Marco Rubio, a Republican senator from Florida, thinks that “each element” of the sequence that leads to success “is eroding in our country.” “Of course you have to work hard, of course you have to take responsibility,” says Hillary Clinton, a former first lady, senator and secretary of state, “but we are making it so difficult for people who do those things to feel that they are going to achieve the American dream.” When discussing the chances of ordinary Americans rising to the top, politicians who agree about little else sound remarkably similar.

Before the word meritocracy was coined by Michael Young, a British sociologist and institutional entrepreneur, in the 1950s there was a different name for the notion that power, success and wealth should be distributed according to talent and diligence, rather than by accident of birth: American. For sure, America has always had rich and powerful families, from the floor of the Senate to the boardrooms of the steel industry. But it has also held more fervently than any other country the belief that all comers can penetrate that elite as long as they have talent, perseverance and gumption. At times when that has not been the case Americans have responded with authentic outrage, surmising that the people at the top are, as Nick Carraway said, “a rotten crowd”, with bootlegging Gatsby better than the whole damn bunch put together.

Today’s elite is a long way from the rotten lot of West Egg. Compared to those of days past it is by and large more talented, better schooled, harder working (and more fabulously remunerated) and more diligent in its parental duties. It is not a place where one easily gets by on birth or connections alone. At the same time it is widely seen as increasingly hard to get into.

Some self-perpetuation by elites is unavoidable; the children of America’s top dogs benefit from nepotism just as those in all other societies do. But something else is now afoot. More than ever before, America’s elite is producing children who not only get ahead, but deserve to do so: they meet the standards of meritocracy better than their peers, and are thus worthy of the status they inherit.

It takes two

This is partly the result of various admirable aspects of American society: the willingness of people to give money and time to their children’s schools; a reluctance to impose a uniform model of education across the country; competition between universities to build the most lavish facilities. Such traits are hard to object to, and even if one does object they are yet harder to do anything about. In aggregate, though, they increase the chances of wealthy parents passing advantage on to their children. In the long run that could change the way the country works, the way it thinks about itself, and the way that people elsewhere judge its claim to be an exceptional beacon of opportunity.

Part of the change is due to the increased opportunities for education and employment won by American women in the twentieth century. A larger pool of women enjoying academic and professional success, or at least showing early signs of doing so, has made it easier for pairs of young adults who will both excel to get together. Between 1960 and 2005 the share of men with university degrees who married women with university degrees nearly doubled, from 25% to 48%, and the change shows no sign of going into reverse.

Assortative mating of this sort seems likely, on average, to reinforce the traits that bring the couple together. Though genes play a role in the variation of intelligence from person to person, this is not a crude genetic determinism. People tend to encourage in their children what they value in themselves and their partners. Thus people bought together by their education and status will typically deem such things important and do more to bring them out in their children, both deliberately and by lived example—processes in which nature and nurture are more than likely to work hand in hand.

Not only do graduate couples tend to value education; they also tend to have money to spend on it. And though the best predictor of an American child’s success in school has long been the parents’ educational level—a factor which graduates are already ahead on, by definition—money is an increasingly important factor. According to Sean Reardon of Stanford the past decades have seen a growing correlation between parental income and children’s test scores. Sort the students who took the SAT, a test for college applicants, in 2014 by parental income and the results get steadily better the further up the ladder you climb (see chart 1).

First, cultivate your kindergarten

Another factor is family stability. Wealthier and better educated American families tend to marry before having children, and like most married couples they split up less than unmarried ones. This correlates with various good outcomes for their children.

The educational benefits of being born to wealthy parents are already clear in toddlers (see article). Families which are used to and eager for success try to build on them at kindergarten. Competition for private kindergarten places among high-status New Yorkers is farcically intense. Jennifer Brozost of Peas, an educational consultancy, recommends that parents apply to 8-10 kindergartens, write “love letters” to their top three, and bone up on how to make the right impression when visiting. Some parents pay for sessions at which their children are coached on how to play in a way that pleases those in charge of admissions.

Once children enter the public school system—which about 90% of them do—the advantages of living in a well-off neighbourhood kick in. America is unusual in funding its public schools through property taxes. States have a floor price for the education of each child, but parents can vote to pay more local tax in order to top this up, and frequently do. Funding levels per pupil can vary by up to 50% across a state, says Mike McShane of the American Enterprise Institute, a think-tank.

Sometimes this results in poor students in cities that collect lots of property tax being better funded than the children of wealthier families in the suburbs. More often, though, the opposite is true. The result is that America is one of only three advanced countries that spends more on richer pupils than poor ones, according to the OECD (the other two are Turkey and Israel). And on top of spending on school, there is spending outside it: the gap between what rich and poor parents shell out for museum trips, music lessons, books and so on has been widening (see chart 2). In a world where lots of people do well on SATs, cultivating extra skills matters.

The opportunities for parental investment continue in higher education, which is ever more costly (see chart 3) but offers ever greater returns. Between 1979 and 2012 the income gap between the median family with college-educated parents and one with high-school educated parents grew four times greater than the headline-grabbing income gap between the top 1% of earners and the rest, according to David Autor of MIT, rising from $30,000 to $58,000.

Those whose parents have provided good schooling and good after-schooling have advantages already—but some get an extra one from institutions that discriminate in favour of the children of alumni. According to a survey by the Crimson, Harvard’s newspaper, 16% of the 2,023 who got in last year had at least one parent among the university’s alumni. Harvard says that legacy preference is only ever a tie breaker in admissions; but with 17 applicants for every place there can be a lot of ties.

All this and lacrosse too

Most of the country’s research universities and liberal arts colleges grant preferences to legacy students; the practice seems widespread at universities just below the top tier. The University of Pennsylvania is particularly friendly to the children of alumni, says Katherine Cohen of Ivywise, a firm with several ex-deans of admissions on its books which provides advice on getting children into the best schools. Though it is rare, stories still crop up of the parents of academically borderline students buying admission for their children with a generous bequest to a particular school.

The fierce competition between universities to build endowments makes doing such favours for alumni enticing. And there is a public-good argument for it: a student who comes with $1m attached can pay for financial aid for many others. But in practice this is not how the system works. While it is true that some elite universities are rich enough to give out a lot of financial support, people who can pay the full whack are still at the centre of the business model for many. Mitchell Stevens, a Stanford sociologist who spent a year working in the admissions office of an unnamed liberal arts college in the north-east, found that the candidate the system most prized was one who could pay full tuition and was just good enough to make one of the higher-profile sports teams but had a strong enough academic record not to eat into the annual allocation reserved for students whose brains work best when encased in a football helmet.

Combined with the long-running push for racial diversity on college campuses, this makes for an esoteric definition of merit. Men are slightly under-represented across college campuses; African-Americans are not, but can still benefit from some forms of affirmative action; and there is always a need for those who are good at sports. Poor whites and Asians get a bad deal from this kind of filtering. Though the Ivies all deny operating quotas to limit Asian students—the best performing group in SAT scores—the number admitted each year has fallen from its peak in 2008 and stays strangely consistent both from year to year and between institutions. Caltech, a university which admits purely on academic ability, has more Asian students than other elite schools. It also has much less feared sports teams.

On graduation, many members of America’s future elite will head for the law firms, banks and consultancies where starting salaries are highest. Lauren Rivera of Kellogg School of Management interviewed 120 people charged with hiring in these sectors for a forthcoming book. She found that though they did not set out to recruit students from wealthy backgrounds, the companies had a penchant for graduates who had been to well-known universities and played varsity sports (lacrosse correlates with success particularly well). The result was a graduate intake that included people with skin of every shade but rarely anyone with parents who worked blue-collar jobs. “When we are asked to identify merit,” explains Ms Rivera, “we tend to find people like ourselves.”

Something similar has happened in corner offices of America’s biggest companies. As computing power has increased and clerical jobs have been automated, the distance between the shop floor and executive positions has increased. It was never common for people to start at the bottom and work their way to the top. Now it is close to impossible. Research by Nitin Nohria, the dean of Harvard Business School, and his colleagues has shown how in the second half of the 20th century a corporate elite where family networks and religion mattered most was replaced by one whose members required an MBA or similar qualification from a business school. This makes the managers better qualified. It also means they are the product of a serial filtering that has winnowed their numbers at school, college and work before they get their MBAs.

More than 50 years ago Michael Young warned that the incipient meritocracy to which he had given a name could be as narrow and pernicious, in its way, as aristocracies of old. In America some academics and thinkers on the left are coming to similar conclusions. Lani Guinier of Harvard speaks for many when she rails against the “testocracy” that now governs America. Once progressives saw academic testing as a way of breaking down old structures of privilege; there is now a growing sense that it simply serves to advantage those who have been schooled to excel in such situations. Heirs to Andrew Jackson on the right have their own worries about the self perpetuation of an American elite, but no desire at all to use government as a leveller. Both sides can agree that the blending of merit and inheritance is un-American. Neither has plausible ideas for what to do about it.

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