Killing the American Meritocracy

The American Dream is under attack like never before—not just the ability to fulfill the dream—but its very concept and history. At the core of the American Dream is the idea of meritocracy. There is no royalty in America, no titles of nobility, no entrenched caste system. You could be born anywhere, to anyone, and still achieve success. It was not just a story. Many real-world examples show exactly this trajectory. Poor children, and sometimes even penniless immigrants, grew up to achieve great success. Some even become titans of industry.

Why then is there such an effort underway to denigrate the idea of meritocracy? It is my belief that those who prefer a centrally planned society to one based on freedom, liberty, and personal achievement are intentionally rewriting history so as to make people believe that so-called “privilege” rather than merit has been the primary factor in achieving success throughout American history. This lie is then combined with the fallacies of communism (such as the labor theory of value and the fixed pie fallacy) in order to bolster the argument for central planning and massive government.

In order to understand the nature of the attacks on our meritocracy, we should start by understanding what a meritocracy is—and what it is not. Some definitions of the word smuggle in the concept of central planning: Merriam-Webster defines it as “a system in which the talented are chosen and moved ahead on the basis of their achievement.” Others try to divorce the concepts of wealth from success: The Cambridge Dictionary defines it as “a social system, society, or organization in which people get success or power because of their abilities, not because of their money or social position.” Neither of these definitions fully explains what meritocracy is as it relates to the American Dream, however, so perhaps a new term is required. I propose we call this the American Meritocracy.

Unlike what some of these other definitions imply, no one is necessarily being selected or moved ahead nor are wealth or social position irrelevant to success. In the American Meritocracy, a free market allows individuals to leverage all of their intelligence, talents, knowledge, wealth, connections, and even luck to get ahead. Those who are successful are correctly regarded as having earned their success, while those who are not successful are rightly considered less ambitious… or worse.

One of the most pernicious fallacies in public discourse today is that someone having wealth represents “inequality” in some meaningful manner. This idea ties in directly with the myth of “privilege” which expands the possible sources of “inequality” to include race, sex, religion, education, and any number of other things depending on who is defining it. The purveyors of the “privilege” doctrine conspicuously fail to explain the myriad success stories involving un-privileged members of society, however; it is as if these achievers do not merit their consideration. They will happily prattle on with anecdotes of the single mother working three jobs while accumulating more credit card debt each month, yet fail to mention the single mothers who save money, start businesses, win awards, and send their kids on to college. If confronted with these inconvenient tales of success, they will hand-wave them away as irrelevant outliers, falling back on statistics that prove little more than that people who are successful tend to be exceptional in many ways.

Behind the fallacy of “privilege” are two fundamental communist doctrines. The first is the labor theory of value, which posits a direct correlation between the value of a good or service and the labor required to produce it. The irrationality of this concept is easily seen in comparing two works of art. Both could be the same size, use the same materials, and take the same amount of time to complete, yet one could be worth millions while the other might be worth little or indeed be judged as truly worthless. The only difference between them is the perceived talent of the artist.

I say “perceived talent” because value is not actually an inherent quality of a good or service. Utility and scarcity may be inherent qualities in some cases, but value is always externally ascribed. Both pieces of art may be one-of-a-kind creations, so they would theoretically have equal scarcity, and both would fill an empty wall with equal aplomb, so again, their utility should be equal. Why then is one worth a million dollars and the other unsold? Because their value (like their beauty) is in the eye of the beholder. Be it because of the identity of the artist or certain ineffable qualities in his work, prospective buyers will ascribe far more value to one piece than to another with little or no regard to the quantity of labor involved in its production.

One could labor for a great many hours digging an unwanted ditch and then labor for hours more refilling it without ever having created any value for anyone. Likewise, one can spend their life in a dead-end job asking if folks “want fries with that?” without ever producing $15 worth of value in an hour. Indeed, with the proliferation of self-serve kiosks with flawless knowledge of ingredients and prices combined with perfect memories and increasing speeds, we may soon see a day when the ability to mumble about the availability of supplemental fries has no marketable value at all.

The second fundamental communist canard that underpins the delusion of “privilege” is the fixed-pie fallacy. Economist Milton Friedman summed up this pervasive error well when we said, “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” We hear this daily rhetoric expressed as concerns about “income inequality” and the supposedly unfair achievements of the “top 1% wealthy” who are nearly universally regarded with suspicion and envy thanks to the prevalence of this particular fallacy.

Skewed statistics suggest that these “Monopoly Man” caricatures have achieved their wealth by plundering the poor, yet these one-sided figures conveniently ignore that “the poor” are richer than ever before, enjoying far more luxuries and longer lives than their historical counterparts. Yes, the “rich” may enjoy a larger percentage of the pie today, but the pie itself is many times larger—and here’s the kicker—it has grown so much larger primarily because of the investments and contributions of those supposedly “evil” rich folks.

Look at it using simple math. If there is a 10-inch pie and you have two slices, how much pie would you have? Now imagine a 10-foot pie of which you have only one slice. To some people, this would be a tragedy, an unconscionable increase in “pie inequality” because you have just one-eighth of a total pie rather than the one-fourth you had before. But is this a reasonable way to measure things? (For the record, if you had 2 of 8 slices of a 10-inch pie, you would have approximately 19.6 square inches of pie. If you had 1 of 8 slices of a 10-foot pie, you would have 1,413.7 square inches of pie, an increase of 721%.)

While it is certainly true that state intervention has made the free market far less free than it could be, the American Meritocracy is still alive and well. Yes, due to taxes, regulations, and occupational licenses, it is more difficult to achieve success than it would be in a fully free market, but there are still virtually limitless opportunities for anyone who is willing to put in the necessary effort and to make the necessary sacrifices.

It is okay to be poor. Some people do not prioritize wealth creation, and that is their right. The problem is when they start blaming their poverty on other people or on “the rich” or “privilege” or some other external force that they claim is keeping them down. If you are poor in America, it is because you have not put in the effort necessary to become wealthy. This may seem harsh and judgmental, but that does not make it untrue. You can achieve success in the American Meritocracy, and if you do not, it is almost certainly your own fault.

Those whose ultimate goal is the eradication of the free market point to the existence of poverty as evidence that the free market has “failed.” They suggest replacing it with “universal” handouts in the form of fully subsidized education, healthcare, family leave, and even income itself. They imagine that these subsidies can be funded indefinitely by plundering the rich—ignoring that even at its current size, the government would blow through the net worth of the rich in a matter of months. In short, they want to kill the American Meritocracy and replace it with a one-size-fits-all communist utopia where the state controls everything and all the little people live in perfect equality.

Quite the fairy tale, is it not? Without “the rich” to keep growing the pie, the pie will naturally begin to shrink and each person’s “equal share” will shrink too. Add in an ever-expanding population, and the predictable economic contractions will guarantee worse outcomes across the board. Instead of some people living in poverty, everyone will live in poverty, and there will be no system in place to facilitate escaping it.

The American Meritocracy is not perfect due to government intervention, but it is still far superior to the abject failure of central planning that is on full display in Venezuela right now. After all, no one is eating zoo animals to stay alive in America.

The American Dream has always been that anyone could achieve success with enough effort and perseverance. This is still true for almost everyone who lives here. The fact that other people may achieve even more success than you does not diminish your success. Despite the fabricated doctrine of “privilege,” there is no ceiling through which you must break or systemic inequality you must overcome. If you can provide quality goods and services to which buyers ascribe value, you too can achieve success in the American Meritocracy. If you fail, you can blame your parents’ wealth (or lack thereof) your race, your sex, your religion, your education, or your astrological sign, and many people will accept your excuses—I will not.

Success in America is not a lottery, it is earned; and if you do not make the effort necessary to earn it, you do not deserve it. I am sure that holding these views makes me a heretic to the church of statism and a disbeliever in the gospel of privilege, but I make no apologies. Your life is of your own making—now go make it better!

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Poverty and Success

Perhaps the most unpopular opinion I hold is that—in spite of the myriad obstacles to success instigated by the state—success is still achievable by a significant percentage of the population (>95%) and poverty is a result of one’s own choices in a similar percentage of cases.

I am not suggesting that everyone’s idea of success necessarily requires financial wealth or that poverty (a lack of financial wealth) is always an undesirable state of existence. Some people do indeed choose to prioritize other goals above wealth, and that is certainly their right. I also acknowledge that there are some people (<5%) in any population who, due to severe disability or state maleficence (typically through the so-called “criminal justice system“), have limited or no ability to achieve financial success.

Caveats aside, my basic thesis is that greater than 95 percent of people are capable of and have the opportunity to achieve financial success, but that many (and even a majority) do not take advantage of their opportunities. There are numerous decisions, reasons, and alternative priorities that explain this phenomenon and the following are far from an exhaustive list.

  1. Not taking advantage of educational opportunities. In the U.S. and most developed countries, basic education is available to all at no charge and higher education is available inexpensively or even at no charge to those who can demonstrate financial hardship. In addition, the information age has led to an unprecedented increase in the quantity and quality of educational materials available at little or even no charge. Nearly anyone can learn to do anything if they are willing to put in the effort. Those who choose to live their lives in ignorance have almost always chosen that path.
  2. Having children (they cannot afford) too young. This is another huge predictor of one’s likelihood of achieving financial success. Having children represents nearly a quarter-million dollars’ worth of expenses taken on which will have to be paid in a span of fewer than two decades. Why do people make this foolish choice? If your finances would not support the purchase of a Lamborghini Huracán, they also don’t support you having a child. Wait or abstain!
  3. An unwillingness to relocate. Here we see another significant problem that plagues the perpetually poor. Sometimes opportunity doesn’t knock on your door. Sometimes you have to go hunt for it. Cost of living is also a major factor here. The Apartment List National Rent Report found that the median rent for a two-bedroom apartment in New York City was $2,523. It was even higher at $2,621 in San Jose, CA. Compare that to Phoenix, AZ or Houston, TX where the averages were $1,061 and $1,024 respectively.

It is not just rent either; today, the average cost for a gallon of gas in San Jose, CA, is $3.27 while in Houston, TX, it’s $1.93. Play with a Cost Of Living Calculator and observe the difference. Right now, the cost of living is 44.33% lower in Houston than in the San Francisco area and 56.82% lower than in the Manhattan area. Why do poor people stay in expensive cities?

What about finding a job? The lowest unemployment in the country right now is in the Ames, IA Metropolitan Statistical Area (MSA) at just 1.4 percent. That’s less than half the 3.6 percent unemployment rate in the New York MSA, and yet the cost of living in Ames, IA, is 59.19% lower than in Manhattan. If you are working full time earning $20 an hour (well above the minimum wage) in New York, you could move to Ames, IA, and take a job making $8.50 an hour and you would be better off ($8.17/hr. is the breakeven point.) Oh, and gas at Sam’s Club in Ames is going for $1.86 a gallon today.

So what is my point with all this information? My point is that if people would make smarter decisions—particularly about their education, when they have children, and where they live—they would have a far greater chance of achieving financial success. I’m not suggesting that it is always easy or that there are not obstacles to overcome, but I am suggesting that it is not nearly as difficult as some people claim. Poverty is not the fault of billionaires or of “greedy capitalists” or of some systemic injustice that keeps “po’ folks” down. Poverty is the natural and predictable result of ongoing poor choices, and until people realize this and start taking responsibility for their own culpability in their financial situations, we will continue to hear the growing chorus of complainers demanding political intervention to redistribute money from those who earned it to those who did not.

With few exceptions, it is fair to say that poor people make poor choices.

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Without Profit, There Would Be No Investment

Among the numerous fallacies embraced by socialism, one of the most notable is completely ignoring the value of investment and risk. Socialists love to talk about the value of “labor” and how profit is made on the backs of “labor,” but they ignore the fundamentals of human nature and of how the market actually works.

Labor doesn’t invest in building a widget factory. Labor doesn’t take the risk of widgets going out of style or being supplanted by something new in the market. Labor doesn’t pay for health and safety inspections. Labor doesn’t take the hit of depreciation.

Labor is paid first, before any profit is seen. Labor loses nothing when the factory burns down. Labor makes no investments and takes no risks, and therefore labor is not entitled to share in the reward. Labor makes a direct trade of time and skill for money. Beyond that, labor has no claim on the possible profits which a capitalist’s investment and risk may generate.

To be a laborer rather than a capitalist is a choice. It is a safe choice in which risk is traded for certainty and the possibility of profit is traded for the guarantee of wages. Most people are both laborers and capitalists. We engage in some direct trades of time and skill for money but we also make investments—be it in the stock market, bonds, cryptocurrencies, or even a loan (with interest) to a friend or neighbor.

Profit is not earned through labor. Wages are earned through labor. Profit is earned through investment and risk. The socialist sees this as unfair, but the socialist cannot explain why anyone would undertake a risky investment if there were no possibility of profit. Instead, the socialist is forced to embrace central planning as an alternative to all the productivity of the free market.

The socialist would have “the state” take on all the risk of investment in industry, infrastructure, research and development, and all other such things and then selflessly distribute the profits it will theoretically generate to the people—the laborers—regardless of what role or lack thereof they played in the generation of said profits.

What could possibly go wrong?

Everything, as it turns out. Unlike capitalists, who regularly fail, go bankrupt, and lose everything, the state cannot afford to take such significant risks. The state lacks the motivation of the capitalist and so it recoils when faced with the same odds at which the capitalist would jump. Even if one ignores the corruption and inefficiency which are endemic to all states, the state is just too risk averse to make meaningful gains in any sectors where it has primacy.

The possibility of profit is what makes investment and risk worthwhile. Without it, there is no incentive for investment and risk, and without investment and risk, there is no societal advancement, no innovation, and no wealth creation. People aren’t going to risk their resources unless the reward for doing so outweighs the risk. That’s basic human nature.

Contrary to what you may have heard, socialism doesn’t “work on paper” any better than it works in practice. It just doesn’t work, period. Attempting to remove profit from human existence removes the motivation which drives humanity to improve itself. Even if socialism didn’t fail catastrophically (as it always has when put into practice), it would, at best, still lead to the devolution of mankind as productivity ground to a halt. That’s not a future anyone should advocate.

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Divide and Conquer Bullshit

So when they get done taking away guns from felons, those accused of domestic violence, those with medical marijuana cards, those under age 21, and anyone who might possibly ever suffer from depression, do you really think that they won’t come after yours too? How stupid do you have to be to fall for this divide-and-conquer bullshit?

The right to keep and bear arms applies to every human being without exception, and the violation of anyone’s rights is a violation of everyone’s rights. To condone the confiscation of anyone’s arms by the state is to endorse the confiscation of arms as a legitimate power of the state. How can self-described “gun rights supporters” be so blind?

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Freedom Has Unlimited Potential

Those who clamor for excessive details on how a stateless society would operate have accepted the fallacy that good outcomes require central planning. While we can speculate endlessly about what private entities might arise in the aftermath of the state’s abolition, such speculation has little chance of accurately capturing the diversity and depth of an unbridled free market.

The fundamental evil of statism is coercion and, free of that anchor, billions of ideas and goals will be put to the test in a competitive yet voluntary laboratory. Freedom has unlimited potential! Removing the state from the equation will unleash that potential like never before in human history.

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Logically, Consumption SHOULD Require Production

People like to say things such as “there shouldn’t be homeless people” or “no one should ever go hungry.” I actually disagree with these ideas and I know that many people will think I’m a horrible and heartless person, but let’s break down these concepts. Why is it that some people can’t afford things like food or housing? The simple answer is that every individual’s consumption is naturally limited by their ability and willingness to create value. Put another way, in order to obtain goods and services, one must be able to offer goods and services in trade.

Those who can’t or won’t offer goods and services in trade can’t reasonably expect to simply be given the things for which other people are willing to trade. It’s illogical. If I have an apple and two people want it, one of whom offers a pear in trade and the other who offers nothing, logic dictates that I should trade for the pear. Likewise, if two people want to stay in my guest room and one offers to do my yard work while the other offers nothing and instead requests breakfast in bed, the choice is an easy one.

Fundamentally, I disagree that there “shouldn’t be” people whose consumption is limited by their own inability to create value. On the contrary, those who have nothing to offer “should” (in a logical sense) receive nothing in exchange.

Now, this subject brings up the idea of charity, and charity is a voluntary choice through which an individual chooses to provide goods and services to someone for nothing or for less than their market value. This is a matter of personal preference and does not fall under the rubric of justice or fairness. I certainly do not condemn charity, but I also do not consider it morally obligatory. I would also argue that, in most cases, charity is not particularly logical. There are exceptions, of course, and charity might arguably have logical value as a type of insurance against rioting or some such thing, but for most people in most cases, charity is an emotional choice rather than a logical one.

So, yes, my no-doubt unpopular opinion is that some people actually “should” be homeless and go hungry. There is no inherent right to consume goods or services, and those who can not or will not engage in productive* activity do not deserve to be given those things which they can not voluntarily obtain.

* Productive activity is defined as activity which produces value to a prospective buyer or trading partner. Neither productivity nor value are inherent or objective qualities and are therefore subject to the market and to the demands of its participants.

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