 Let us go to the second topic I want to talk about, which is meritocracy. Now, meritocracy is a complicated concept because people use it in a variety of different ways. Generally, I dislike it. I dislike the term a lot. Because it's the idea of accuracy, right? Of accuracy implies political power. Aristocracy is the aristocrats' rule. Democracy is the majority, rules. Meritocracy suggests that it's ruled by the meritorious, those who have merit. Well, what merit gives you the ability to rule? So it conflates, and this is a package deal, it conflates political merit. The merit of a political elite, and we'll see how this plays out in the world today, with the merit of a marketplace. So people, often who are advocates of capitalism supposedly at least, often say that capitalism is a meritocracy. But it's not. Capitalism is a system in which there are no rulers. That there are no people who rule over others. The marketplace, yes, is based on merit. But that doesn't make it a meritocracy, and that's a big difference. And this struck me because there is a new book out. I'm trying to look what the... I read the author of the book, published an article in Bloomberg, which I think is a really fascinating article, and clearly throughout the article he conflates the idea of creating a civil service, like in France and in Great Britain, of merit, or like in China, of merit, and the idea that in the marketplace people rise by merit. A meritocracy ruling over me. Now the reason he's writing this is in a sense a good reason, because the idea of merit as an economic standard is clearly under assault. It's under assault obviously by CRT, which says it's not about merit, it's about race. But it's under assault by real thinkers like Michael Sandel, the philosopher from Harvard, who wrote a book about the tyranny of merit, and Daniel Malkovich. I don't know if you guys have seen my debate with Daniel Malkovich. One of the best debates I've done, definitely worth seeing. It's the thing that I've got the most... The long-form event that has gotten the most views of anything that I've done. It's got, I think, over half a million views, and it's a long debate, so that's a huge number of views for an actual debate. So where are all my subscribers? They come subscribe and then they leave. I don't know. But Daniel Malkovich, who I debated from Yale, dismisses merit as a trap. So you've got some of the leading intellectuals in our top universities, Harvard and Yale. And when they mean merit, they mean merit in the marketplace. But this guy, his name is Adrian Wildridge, has written a book about the virtues of merit, the virtues of meritocracy, and how it's a building block of modernity, of capitalism, of liberalism. But it's the other way around. Capitalism and liberalism lead people free. And when people are free in an economy, in the jobs that they have, in the professions, in the things that they engage in, merit is rewarded. That's how a marketplace works. Merit is rewarded. Value creation is rewarded. So to the extent that there's any validity to the idea of meritocracy, it's capitalism creates it, not the other way around. And capitalism doesn't say people of merit should be better off than people without merit, because it doesn't say that, because you might have merit as a teacher and never make a lot of money. But you will still, in a private education system, you'll still rise up, you'll still be recognized, you will still have more job opportunities than somebody who is not a good teacher. So capitalism rewards merit, but it doesn't necessarily mean that, you know, if you're good at something, philosophy or something, you're going to be super rich. It doesn't translate that way. So capitalism values your freedom, and then leaves us free to reward the people who provide us with values. In other words, to provide people who have merit, and therefore providing us with values. And that is what is under attack today. What's under attack today is the idea that eight people have merit, because it's all luck anyway, that merit is earned, that merit is just, that merit is deserved, the rewards of merit. Because we believe today, left and right, that individuals are basically either products of their environment or products of their genes or products of a combination of their genes in the environment. But the one thing they're not a product of is their own choices. That one person who doesn't shape their lives is themselves. And therefore, the whole idea of merit is being undercut. So there's a massive campaign, particularly in the United States, against merit. Now what I found interesting about the article is, again, he conflates this. For example, he's complimenting China on, in politics, trying to hire into the Communist Party apparatus, the smartest, the brightest, the kids who get the highest scores. And he compares that to the civil servants of the British and the French, which he says is why the British and French were so successful. Oh, the British and French were so successful in the 19th century and the 20th century, because to a large extent they left their economies alone. And to that extent they succeeded, and to the extent they didn't, they didn't succeed. He does have some interesting data, though. And he does show that when you have an economy that values merit, in other words, a relatively free economy, put it another way. An economy that doesn't regulate heavily, doesn't control heavily, doesn't plan heavily, doesn't have economic planning, industrial planning, like the Republicans would like us to have, and Democrats. Those economies do well even when they have large welfare states. So for example, the Scandinavian countries that have big government, large welfare states, regulate little and generally value merit in the marketplace. They have real competition, and therefore they do okay. They can be used by Bernie Sanders as a model, even though Bernie Sanders is far more of a leftist, far more of a socialist than anything that exists in Scandinavia. He says countries that resist meritocracy have either stagnated or hid their growth limit, but that's not the meritocracy that they're resisting. What they're resisting is free markets. What they're resisting is capitalism. He gives Greece as an example. And he contracts meritocracy with nepotism, clientelism, where people get jobs based on who they know, not in their ability. And that's a good differentiation. So if you compare Italy to France, you know, you compare France and Germany after the war, they were focused on markets. They were focused on rewarding merit. If you look at Italy, Italy invented the word nepotismo, nepotism. And of course, Italy and Greece fall ag, northern Europe. Northern Europe ranks very, very high on his rankings of meritocracy, of no crony, no nepotism, no clientelism, no government arranging who succeeds and who doesn't. But basically, economies left free to reward people. He says, you write countries that favor recruiting professional managers who open competition, have higher growth rates than those that favor recruiting amateur managers through personal connections. I mean, that should be obvious, should be new. America has the highest overall management score. So in terms of management, in terms of business, we have the highest score in the world. Followed by Germany and Japan, rich world laggards such as Portugal and Greece and big emerging market countries such as India have a long tail of unmeritocratic and therefore badly managed firms. These are two recent studies of very telling. One is from the University of Chicago and they look at America's GDP growth per person from 1960 to 2020. Through the prism of talent distribution, this is interesting. They claim that roughly a fifth of the country's growth during this period can be explained by improved allocation of talent, talent going to its most productive activity, particularly the opening up of highly skilled professions to new talent pools. Think technology. In 1960, 94% of Americans, but so not just technology, but think of, this will piss off some people, think of diversity. And I'm not talking about diversity in terms of conscious diversity. I'm talking about lack of discrimination. Think of the fact that in the United States since the 1960s, we have eliminated discrimination against women and against minorities from professions. And therefore talent, we now evaluate people not based on the color of the skin, I mean, except if you're in the CRT. And we don't evaluate people based on whether they're male or female. We evaluate it based on how talented they are. So here's an example. He says in 1960, 94 of American doctors and lawyers were white men, 94%. By 2010, that number shrunk to 60%. Now, this makes us more productive and a more just society because we're basically allowing people, people are rising up based on their skill set, not based on the color of the skin. Now, I assume that the study controlled for things like affirmative action. Another study measures country levels of merit based progress, right? Provided by the World Economic Forum and they calculate this and they rank the world's advanced economies roughly in terms of their meritocracy score, right? These are not exactly numbers you would want to fight over. They're not great numbers. But what they find is that Sweden comes on top and Italy at the bottom. Northern European countries cluster at the top along with the US and Japan. Southern European countries lie at the bottom. This is among developed countries. But what they find, and this I found really interesting, high meritocracy scores have benefited much more from new technology than low scored countries like Italy. Why? Because Italy's loyalty based management style had no negative consequences for productivity growth in the decades before 1995. Because everything was pretty simple. It didn't require extraordinary ability to run a, I guess, a straightforward factory where you could to some extent mimic what was being done by others. But when the IT revolution took off, and I'm quoting this article, loyalty based management reduced Italy's productivity growth by between 13 and 16 percentage points. That's huge, huge. Yes, I know Northern Italy is different than Southern Italy, but this is cross country aggregates. He also has some good examples of what happens when you move away from meritocracy. He gives example as City College of New York, which most of you have probably not heard of. It used to be, it used to have a reputation of the Harvard of the proletarian. It took in thousands of poor adolescents, many of them offsprings of immigrants, and produced at the other side, but they took them in based on ability. They introduced on the other side doctors, lawyers, academics, 10 alumni are Nobel Prize winners, 10, which is astounding. Then in 1970, this is in the 50s and 60s, the university introduced an open access regime admitting anyone who had graduated from the city's high schools. The result was a boom in the number of students, a collapse in academic standards. By 1978, two out of three students admitted to the college required remedial teaching and reading, writing and arithmetic. Dropout rates surged, talented scholars left, and a college that had once specialized in producing the rocket fuel of a successful society, which is talent, absolutely, became synonymous with protests and sit-ins. Again, reading from the article. So he gets it, to some extent, but then he attributes the same characteristics to government. Okay, I'll give you one last example. Venice, which he uses. He says in the early Middle Ages, Venice was the richest city in Europe. In Venetian sailors, there were 36,000 Venetian sailors, 36,000 in the Middle Ages. Popped up everywhere, all the way to China. They were innovative. They had ingenuity, dynamic culture. As a consequence, they patronized some of the best artists in the world and built spectacular buildings. You can see them in Venice to this day. Now, one of the reasons for this is because they had a fairly open political system. Rather than having aristocrats from a few families rule over the city, like most cities in the world at the time, Venice had a system where the ruler was voted in by the ruling families, but selected in, right? So there wasn't a court, there was a council of wise men. But the amazing thing was social mobility was allowed. People would go in and out. Somebody looked at this and in the years 960, 971, 982, dark ages in Europe. New names on this list made up 69%, 81%, and 65% respectively on those records. So they kept a record of who were the families that could vote for the leadership. And so these institutions became very inclusive, very dynamic. Then all that changed. In the 12th and 13th centuries, a few families rigged the system. They put out what's called a book of gold, which lists only the families that were acceptable. And the vibrancy, the dynamism slowly died, slowly died. And you can see that in Venice's becoming less and less of a relevant city, less and less important. By 1500, the Renaissance, where other cities are booming. The city population is now lower than it had been in 1330. So the city is shrinking. By 1851, it's considered a ghost upon the sands of the sea. Which is the subtitle of a book called The Stones of Venice. So you want dynamism. You want mobility, social mobility. Social mobility is a consequence of merit. You succeed, you go up, you fail, you come down. Now, one country has tried to do this at the political level as well as the economic level, and that is Singapore. And in Singapore has tried to hire the best people to run the government and to do some industrial planning. And it allows for free markets. It has that combination. And the author argues that that's what the world needs, and that unfortunately China is completely embracing this model. What they're not getting is that in spite of Singapore's relative authoritarianism, it's still pretty free. Suddenly, as compared to China, and that the real model should be the United States of America. Fourth of July is coming up. It's a good time to remind you. Not a group of meritocracy, not a meritocracy of bureaucrats, but bureaucrats limited in what they can do, limited in their power, constrained by a constitution, constrained by their job of protecting individual rights. So the solution is not for all of us to become like China, even though that's where I think the world is heading. The solution is to be everybody to become like what the United States should and could have been, what the United States came close to be, close to be. What we need today, what I call the new intellectual, would be any man or woman who is willing to think. Meaning any man or woman who knows that man's life must be guided by reason, by the intellect, not by feelings, wishes, wins or mystic revelations. Any man or woman who values his life and who does not want to give in to today's cult of despair, cynicism and impotence, and does not intend to give up the world to the dark ages and to the role of the collectivist broads. Alright, before we go on, reminder, please like the show. We've got 163 live listeners right now, 30 likes. That should be at least 100. I figure at least 100 of you actually like the show. Maybe they're like 60 of the Matthews out there who hate it. But at least the people who are liking it, I want to see a thumbs up. There you go. Start liking it. I want to see that go to 100. All it takes is a click of a thing, whether you're looking at this. And you know the likes matter. It's not an issue of my ego. It's an issue of the algorithm. The more you like something, the more the algorithm likes it. So if you don't like the show, give it a thumbs down. Let's see your actual views being reflected in the likes. 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