From the centre-left to the far right we hear the claim that capitalism is a meritocracy; a system where the best and brightest win out through dint of their personal qualities. But is this true?
Sure there is inequality in the world, say the defenders of meritocracy, but it’s justified inequality. Everyone has the same opportunities to work hard and rise to the top. People at the top of the business world are there because they’re “ethical, hard-working, and good”, according to Steve Jobs.
Those at the bottom of the pyramid simply need to work harder, be resilient, think creatively, stop blaming others, practice mindfulness, make vision boards, save more money, stop looking for handouts — the list of ways the poor need to improve themselves goes on.
‘We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else …”(Barack Obama, inaugural address, 2013)
The basic idea is that capitalism is an ethical system that sorts the best from the rest, rewarding them for their hard work and moral character.
So, let’s do a thought experiment.
Imagine a clean, white lab — far from the messy everyday churn of human life, the roar of cities, the competing cries of protestors — and imagine in it, 10 people. They can be any gender, colour, size, or temperament you care to make them. Nine of these 10 people have just the clothes on their backs and $100 dollars in their hands. One of these people has, besides the clothes on their back, a large workspace with all the tools and machines they could ever need to produce various useful things. As well as this, they hold in their hand a briefcase packed tight with $1 million.
The experiment is to see who is the hardest worker amongst these 10 people. The measure is simple — who can pursue their rational self-interest and profit most effectively. To do this they must produce widgets to be sold outside the lab. Each widget produced will bring in $1. Whoever makes the most money in the white room will be declared the winner.
They will need food, which they can purchase from a vending machine where all food items cost $2.50. The vending machine can also be bought for $100. Participants also need somewhere to rest, so simple comfortable flats are provided to rent for $20 per week. They can also be bought outright for $10 000.
What will happen here?
The nine poorer participants might ask to borrow the equipment they need from the rich participant (RP). If they are lucky enough to get it and work hard, they can probably produce the 55–75 widgets they’ll need to sell each week to pay for their rent and food. Assuming everyone has the same tools, this situation will lead to each member of the group producing roughly the same number of widgets, and whoever is slightly faster will win out in the end.
But, considering the imperative is to make as much money as possible, it would be more rational for the RP to rent or sell the equipment to the others. That way they’re making money before creating a single widget. This will also put the others at a bigger disadvantage because they need to produce even more widgets to cover the cost of equipment hire in addition to food and housing.
In fact, if the RP really wanted to be rational, they would invest 10.01% of their wealth and buy all the flats and the vending machine. That way they can collect the rent and food money the others’ spend, living rent-free and making money passively even if they produce no widgets. The next step to maximise their income would be to raise the cost of rents, food, and equipment hire to a level where the others can’t possibly produce enough widgets on their own to cover their costs of living. The RP could then offer them jobs producing widgets in their workshop.
By dividing up the production of widgets into specialised jobs carried out in a coordinated way, productivity could be boosted exponentially. Let’s say this operation produces 800 widgets a day. That brings in $5 600 per week. Since the imperative is personal profit — and remembering this work was all done using equipment owned by the RP — they can distribute those funds as they please.
Say rent is $40 a week and food items now cost $3.50, they only need to pay each of the other nine participants $113.50 a week each to ensure they have food and housing. Maybe they’ll chuck in an extra $30 a week to keep them happy, and a bonus now and then for someone who works especially hard or finds a way to improve productivity in the factory. Let’s say RP pays everyone $150 a week on average— that still leaves $4 250 profit, and they’ll get the bulk of those wages back as landlord and food merchant.
Inevitably, the RP’s wealth will grow exponentially and the wealth of the others will either grow slowly or stagnate. If anyone sees a radically different outcome for this experiment that’s plausible, please comment!
Is this result due to the RP working harder? Clearly not — if the labour in the workshop was shared then RP worked about the same as everyone else. If they simply oversaw things, they may have barely worked at all. Their wealth came not through labour but through owning the equipment, houses, and vending machine in the first place. The RP’s wealth combined with the relative poverty of the other participants is how they won: the others had no choice but to work on RP’s terms; refusal would mean going without food and shelter.
The outcome of the experiment was dictated not by the personal qualities of the participants but by the material conditions at the outset of the task. In a less clean way, this is the same process that plays out in a capitalist society.
When being a societal ‘winner’ is determined by economic success, and access to cash determines your quality of food, housing, medicine, education, and other necessities, those who start with more will be incentivised to leverage their advantage at every turn. Wealth will flow to those who already have the most and away from those who have the least. Those who don’t really own anything — most of humanity — will have to work on someone else’s terms, for someone else’s goals, and accept whatever remuneration they are offered in order to survive.
Whether people win or lose will be determined primarily by the economic conditions in which they began life, not by their personal moral qualities or their hard work. Someone working three low-paying casual jobs and raising a family works much harder than someone who collects rent but they are not rewarded accordingly.
Of course, our little experiment would run differently if each participant started with equal resources. But even the most vociferous defender of capitalism would admit people don’t start their lives with equal resources. Most children are born into families who own nothing, with parents who work their whole lives just to avoid sliding further into poverty. A few are born to very comfortable families, and even fewer are born into families with private wealth better compared to GDP than normal salaries. Given the way the experiment is set up, the only way its outcome could be different is if the 9 poor participants worked together to even the playing field.
Capitalism functions not to reward hard work but to maintain and intensify existing economic inequalities. If we want to change that, we need to start thinking outside the limitations of the social experiment we live in — we need to work together to break its rules before they break us.
Mr. Rows Namoura Coffee 
Capitalism is Meritocracy: A Thought Experiment
From the centre-left to the far right we hear the claim that capitalism is a meritocracy; a system where the best and brightest win out through dint of their personal qualities. But is this true?
Sure there is inequality in the world, say the defenders of meritocracy, but it’s justified inequality. Everyone has the same opportunities to work hard and rise to the top. People at the top of the business world are there because they’re “ethical, hard-working, and good”, according to Steve Jobs.
Those at the bottom of the pyramid simply need to work harder, be resilient, think creatively, stop blaming others, practice mindfulness, make vision boards, save more money, stop looking for handouts — the list of ways the poor need to improve themselves goes on.
‘We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else …”(Barack Obama, inaugural address, 2013)
The basic idea is that capitalism is an ethical system that sorts the best from the rest, rewarding them for their hard work and moral character.
So, let’s do a thought experiment.
Imagine a clean, white lab — far from the messy everyday churn of human life, the roar of cities, the competing cries of protestors — and imagine in it, 10 people. They can be any gender, colour, size, or temperament you care to make them. Nine of these 10 people have just the clothes on their backs and $100 dollars in their hands. One of these people has, besides the clothes on their back, a large workspace with all the tools and machines they could ever need to produce various useful things. As well as this, they hold in their hand a briefcase packed tight with $1 million.
The experiment is to see who is the hardest worker amongst these 10 people. The measure is simple — who can pursue their rational self-interest and profit most effectively. To do this they must produce widgets to be sold outside the lab. Each widget produced will bring in $1. Whoever makes the most money in the white room will be declared the winner.
They will need food, which they can purchase from a vending machine where all food items cost $2.50. The vending machine can also be bought for $100. Participants also need somewhere to rest, so simple comfortable flats are provided to rent for $20 per week. They can also be bought outright for $10 000.
What will happen here?
The nine poorer participants might ask to borrow the equipment they need from the rich participant (RP). If they are lucky enough to get it and work hard, they can probably produce the 55–75 widgets they’ll need to sell each week to pay for their rent and food. Assuming everyone has the same tools, this situation will lead to each member of the group producing roughly the same number of widgets, and whoever is slightly faster will win out in the end.
But, considering the imperative is to make as much money as possible, it would be more rational for the RP to rent or sell the equipment to the others. That way they’re making money before creating a single widget. This will also put the others at a bigger disadvantage because they need to produce even more widgets to cover the cost of equipment hire in addition to food and housing.
In fact, if the RP really wanted to be rational, they would invest 10.01% of their wealth and buy all the flats and the vending machine. That way they can collect the rent and food money the others’ spend, living rent-free and making money passively even if they produce no widgets. The next step to maximise their income would be to raise the cost of rents, food, and equipment hire to a level where the others can’t possibly produce enough widgets on their own to cover their costs of living. The RP could then offer them jobs producing widgets in their workshop.
By dividing up the production of widgets into specialised jobs carried out in a coordinated way, productivity could be boosted exponentially. Let’s say this operation produces 800 widgets a day. That brings in $5 600 per week. Since the imperative is personal profit — and remembering this work was all done using equipment owned by the RP — they can distribute those funds as they please.
Say rent is $40 a week and food items now cost $3.50, they only need to pay each of the other nine participants $113.50 a week each to ensure they have food and housing. Maybe they’ll chuck in an extra $30 a week to keep them happy, and a bonus now and then for someone who works especially hard or finds a way to improve productivity in the factory. Let’s say RP pays everyone $150 a week on average— that still leaves $4 250 profit, and they’ll get the bulk of those wages back as landlord and food merchant.
Inevitably, the RP’s wealth will grow exponentially and the wealth of the others will either grow slowly or stagnate. If anyone sees a radically different outcome for this experiment that’s plausible, please comment!
Is this result due to the RP working harder? Clearly not — if the labour in the workshop was shared then RP worked about the same as everyone else. If they simply oversaw things, they may have barely worked at all. Their wealth came not through labour but through owning the equipment, houses, and vending machine in the first place. The RP’s wealth combined with the relative poverty of the other participants is how they won: the others had no choice but to work on RP’s terms; refusal would mean going without food and shelter.
The outcome of the experiment was dictated not by the personal qualities of the participants but by the material conditions at the outset of the task. In a less clean way, this is the same process that plays out in a capitalist society.
When being a societal ‘winner’ is determined by economic success, and access to cash determines your quality of food, housing, medicine, education, and other necessities, those who start with more will be incentivised to leverage their advantage at every turn. Wealth will flow to those who already have the most and away from those who have the least. Those who don’t really own anything — most of humanity — will have to work on someone else’s terms, for someone else’s goals, and accept whatever remuneration they are offered in order to survive.
Whether people win or lose will be determined primarily by the economic conditions in which they began life, not by their personal moral qualities or their hard work. Someone working three low-paying casual jobs and raising a family works much harder than someone who collects rent but they are not rewarded accordingly.
Of course, our little experiment would run differently if each participant started with equal resources. But even the most vociferous defender of capitalism would admit people don’t start their lives with equal resources. Most children are born into families who own nothing, with parents who work their whole lives just to avoid sliding further into poverty. A few are born to very comfortable families, and even fewer are born into families with private wealth better compared to GDP than normal salaries. Given the way the experiment is set up, the only way its outcome could be different is if the 9 poor participants worked together to even the playing field.
Capitalism functions not to reward hard work but to maintain and intensify existing economic inequalities. If we want to change that, we need to start thinking outside the limitations of the social experiment we live in — we need to work together to break its rules before they break us.
Source:
Share this: