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Home Publications Blogs Beat the Press David Brooks Is Right, but He's Also Wrong

David Brooks Is Right, but He's Also Wrong

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Friday, 25 January 2013 08:27

Okay, I'm stealing from Paul Krugman today. Brooks' column today points out that modest redistributional measures implemented by Obama don't amount to a hill of beans next to the enormous upward redistribution going on in before-tax income. The restoration of Clinton era tax rates at best take away 2-3 years of growing inequality of before tax income.

Where Brooks is out to lunch is when he tells readers:

"On the one side, there is the meritocracy, which widens inequality."

That one is more than a few million miles far of the mark. When Erskine Bowles earned $340k as a director of Morgan Stanley as it was pursuing practices that would have landed it in bankruptcy had it not been saved by a government bailout, was that due to meritocracy? Did all the CEOs who got tens of millions of dollars in compensation as they tanked their companies get their pay due to meritocracy? Is the reason that our doctors get twice as much as doctors in Western Europe meritocracy?

The list here is very long, yes it's my book about Loser Liberalism, but you have to be pretty blind to realities in the United States today to think that the story of inequality is primarily about meritocracy -- although it might be useful for some people to think this.

Comments (16)Add Comment
http://www.harrowell.org.uk/blog
written by Alex, January 25, 2013 9:12
"When Erskine Bowles earned $340k as a director of Morgan Stanley as it was pursuing practices that would have landed it in bankruptcy absent had it not been for a government bailout, was that due to meritocracy?"

Short answer: yes.

Longer answer: Michael Young's notion of the meritocracy was a society in which the elite believed that they were there on merit, and therefore that their privilege was well-earned. He feared that they would be worse as a result.
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written by Kat, January 25, 2013 9:40
Alex,
you are correct.
also, related:
http://opinionator.blogs.nytimes.com/2013/01/24/timothy-geithners-legacy/?hp
...
written by Kat, January 25, 2013 10:03
Here is more from Michael Young. He talks about the Blair cabinet being stuffed with meritocratic elites, but you get the idea.
[url=http://www.guardian.co.uk/poli...29/comment

The Rattner on Geithner piece seems like the logical conclusion if you believe that there could ever be this neutral force called the "meritocracy".
awesome link, thanks
written by pjm, January 25, 2013 10:13
Kat, I did have to search for it, but thanks nonetheless:
http://www.guardian.co.uk/politics/2001/jun/29/comment
...
written by Kat, January 25, 2013 10:32
pjm,
Thanks for posting the correct link. Not sure what happened.
"Might be useful ..." ??? Let's be clear
written by John Puma, January 25, 2013 12:04
It IS useful, to those with lots of money and NO discernible merit, to pay obsequious little toads like Brooks to constantly refer to as "merit" the attitude of entitlement of his overlords/paymasters.
Meritorious Makers Are Not Phil Gramm Whiners
written by Last Mover, January 25, 2013 2:56
On the "hill of beans" side, take Brooks at his word and use it to justify restoration of tax rates from the Eiesenhower era that would collect way more revenue than a hill of beans.

That way, whether the rich are a plutocracy of takers they actually are, or a meritocracy of makers they claim to be, won't matter since they pay their way either way. As they whine about higher taxes, remind them it's only plutocratic crooks who create fewer jobs. Taxes don't faze true meritorious job creators.
exceptions and rules....
written by pete, January 25, 2013 5:45
Nice try. Certainly bank shareholders should be able to claw back some money, but of course exec comp is small potatoes compared to the losses. On the other hand, when the dot coms funded their progress with options rather than salary, which eventually led to lots of dot com millionaires, thats not necessarily a bad thing. Careful to begrudge the value producers.

Now, those with monopolies, like AMA and SEIU employees gathering rents relative to say European counterparts, sure...take that away by having the U.S. join the EU and flooding our health care industry with underpaid workers from Greece Spain and Italy, let alone England Germany and France.

Oversight
written by bobs, January 25, 2013 7:42
What Dean Baker conveniently forgets is the undisputed fact that the heads of Wall Street banks would much rather be taxi drivers or short order cooks. It's only their mega salaries and bonuses that keeps them in the executive suite and in their helicopters. Mess with their compensations, and next thing you know, it'll be Lloyd Blankfein who'll be taking your order of cole slaw and onion rings! Now, tell me, is that really what you want, Dean Baker?!
It was a typo.
written by Tom Allen, January 25, 2013 9:21
Brooks simply misspelled "meretricracy" -- rule by prostitutes.
need more such examinations of "meritocracy"
written by watermelonpunch, January 25, 2013 9:33
(better post title than Krugman's IMHO... much more peppy!)

http://www.merriam-webster.com/dictionary/meritocracy
meritocracy : a system in which the talented are chosen and moved ahead on the basis of their achievement


I think sometimes when people use the word, they focus more on the talent (real or imagined!) and less on the achievement.

Do we really have a society where people's pay is based upon their achievements?

And who decides what achievements are worthy?

I imagine a lot of shareholders who sold out at the right time thought CEOs that ran their companies into the ground, were, in fact, doing a good job... while they were shareholders. Once they passed the hot potato, why would they care about the result of said company & the comp of the CEO in light of it? When they got the top dollar for their shares, I'm sure they thought the CEOs were worth every penny at that time.

How about comparing garbage collectors with prostitutes.
Neither profession requires any higher education. Both professions require a certain degree of physical fitness & ability to tolerate the unpleasant.
Yet the one that's pretty critical to a functioning civilization & human health, I'm pretty sure, usually gets paid less than the one that is sometime a danger to human health and that many people actually consider detrimental to society.

Basically, IMHO, the term "meritocracy" is subjective & vague enough to be nearly irrelevant in any discussion about wage equality or inequality, about who deserves what, or about what the market favours at any given time.

If we're not willing to specify exactly what we value, we shouldn't use our values as an argument.

Hired killers get paid quite a bit, I believe. To be successful at that takes some talent as well I would think.
For all we know, David Brooks could be defending hit men & paid assassins when he references people getting paid commensurate to their achievement via meritocracy.

We don't know what's in someone's mind when they say they think people are getting paid what they deserve.

I think it's very important to keep in mind that when someone says "meritocracy", they could mean rewarding people you would never believe deserving of such reward... and you might never know it.
Instead of "Meritocracy," the best term is...
written by Ebenezer, January 25, 2013 11:06
...kleptocracy.

It's painfully obvious how incompetent many of those in positions of power are, and how rich their rewards are for miserable (or, if we're fortunate, mediocre) results. There are many who are much more competent and ethical than these folks, but they're not going to get into power unless they're willing to sell their country out.
The wretched poverty of the San Joaquin, due to goverment policy, NOT meritocracy
written by Rachel, January 26, 2013 11:20

Brooks devotes some of his column to ridiculing the San Joaquin Valley, as if the poverty there were somehow due to the personal failings of its population.

But in fact, much of the poverty and lack of education in the San Joaquin and Sacramento Valleys is manufactured.

Barbara Boxer and friends, to start with major offenders, have long promoted a policy of taking water from the San Joaquin. This naturally leads to unemployment in this agricultural region. And now others have imposed carbon tax burdens on the employment in the Sacramento and San Joaquin Valleys, for the sake of making an environmental statement (and extracting money to give to businesses they care more about). And at the same time, tax dollars go from the San Joaquin to pay for elite educations, out on the coast mainly, while useful trades eucation, such as LVN schools for high school dropouts in the valleys, is neglected, or privatized. These are some of the policies from which the valleys suffer.

So the unemployment rate stays high. Not because people there don't have brains and initiative. Only because the highly privledged people on the coast don't care (in some cases, may not even know) what the policies they make are doing to poorer people inland.
Merit pay or rents?
written by Perplexed, January 26, 2013 7:15
So meritocracy exists and global warming doesn't? How have so many become so gullible? Have we just been on the island too long? Is there something in the water?

We have so co-mingled our "merit pay" with our rents that we no longer have the ability to distinguish one from the other. Let's face it, with no better information about which is which, the best estimate is that 1/2 is "merit pay" and 1/2 is "rents;" there's no mathematically sound reason to assume that 100% is merit pay as Brooks does. Why would we assume any different proportion when we expend so little effort in measuring and reporting on which is which? Does the "science" of economics have responsibility on helping to close this information gap or is it OK that they just go along with the ruse? Maybe its just too hard measure or fit in to existing models so why expend the effort?

Why don't we have any government produced estimates on what our levels of rents/GNP are? How do rents differ economically from taxes except from the fact that they largely evade measurement and transparency? Why don't our "entitlement" statistics include monopolies, corporate welfare, tax expenditures and other forms of rents. Shouldn't we have all the "entitlements" on the table before deciding on which ones should really be cut.
...
written by liberal, January 27, 2013 9:02
Perplexed wrote,

Let's face it, with no better information about which is which, the best estimate is that 1/2 is "merit pay" and 1/2 is "rents;" there's no mathematically sound reason to assume that 100% is merit pay as Brooks does.


Nah. For income above some level (say, $1M), a reasonable starting assumption is 100% rent.

Why don't we have any government produced estimates on what our levels of rents/GNP are?


Yeah, I wonder why that would be...

Why would we assume any different proportion when we expend so little effort in measuring and reporting on which is which?


The most egregious example is neoclassical economists conflating land (earnings = 100% rent) and capital.
I guess if you define merit....
written by thoughtbasket, January 30, 2013 9:27
....as knowing the right people, then maybe we're living in a meritocracy. After all, Erskine Bowles got to be a director of Morgan Stanley because his dad was an investment banker and prominent North Carolina politician. So Erskine, you see, got promoted on the merits of being a Bowles.

I wrote an entry on the lack of true meritocracy in the US on my blog: http://thoughtbasket.com/2009/...ritocracy/


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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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