The Weekly Sift

The biggest mystery of recent years is: Why are all our institutions failing at the same time? Think about it:

• We just had a banking crisis that required trillions of dollars of bailouts and interest-free loans to the very people who caused it and profited from it. No one went to jail, in spite of massive evidence of criminality. More-or-less nothing has been done to prevent the same thing happening again.
• Our election campaigns have become open bidding wars. As a result, Congress is largely unresponsive to the desires of anybody who’s not rich, and the number of people who rate the “honesty and ethical standards” of congressmen as high or very high is an anemic 7% — the same rating lobbyists get.
• The public distrusts scientists. Among scientists who study climate, 97% believe in man-made global warming. But only about half of the public does, and that’s a recovery to 2009 levels after a considerable dip.
• The Catholic Church has been rocked by its pedophilia scandal. And the worst of it is this: When bishops found out, they uniformly protected the guilty priests rather than the innocent children. That part of the scandal goes all the way to the Pope, and there’s been no house-cleaning of implicated bishops.
• Public expectations of presidential candidates have plummeted. In 2000, Al Gore was tagged with being a “serial exaggerator” after saying a few mostly true things. This year, much of Mitt Romney’s stump speech consists of publicly debunked lies, and it’s not an issue. Voters shrug and say that all politicians lie.
• The Supreme Court has become partisan. People have always complained that the Court’s legal philosophy was too liberal or too conservative. But only since John Roberts and Sam Alito replaced David Souter and Sandra Day O’Connor have major cases routinely been decided on 5-4 party-line votes. Today, if the president who appointed you was Republican or Democrat, that’s the side you take. The shock of Roberts’ ObamaCare decision wasn’t his legal reasoning, it’s that he crossed party lines.
• In discussions about baseball’s Hall of Fame, the main topic isn’t how good players were, it’s whether they cheated or not. It’s very possible that the biggest stars of the 1990s — Barry Bonds, Roger Clemens, Alex Rodriguez, Mark McGwire, Sammy Sosa — won’t be in the Hall.
• Both Presidents Bush and Obama embraced the doctrine that the president can rain death on countries we are not at war with. If Americans get killed in the process, too bad. American citizens might even be the target.
• Trust in journalism has collapsed. Again and again, the press has been the watch-dog that didn’t bark: Iraq’s non-existent WMDs, the housing bubble, and so on. Plus, they’ve increasingly practiced he-said/she-said journalism that punts the question of what is true. Newspapers are closing, reporters are being laid off — and yet, at the top, the marquee journalists remain the same no matter how many stories they screw up. The marquee pundits keep their jobs no matter how often they are proven wrong.

It goes on and on. All eras experience some institutional failure, but usually when one institution fails, you can take refuge in another: When Al Capone had city government in his pocket, the feds took him down. When the political process denied justice to blacks, the courts provided it. When Nixon’s White House was corrupt, Congress, the judiciary, and the press performed well.

What’s bizarre and unsettling about our era is that there seems to be nowhere to turn. Why is that? What’s making all our institutions suspect at the same time?

Devil theories. If you’re a certain breed of conservative Christian, what’s going on is obvious: The Devil and his minions are stepping up their malignant activities in preparation for the End of the World. And various secular subcultures have their own devil theories: the Koch Brothers, the worldwide socialist conspiracy, and so on.

While I’m no fan of the Kochs, all these one-big-conspiracy theories seem nutty to me. (I’ll bet lots of eras had evil billionaires.) But I do have to give them this: A devil theory is an answer on the scale of the problem. 

Conspiracy theorists respond to our attempts to be rational with: “What? You think this is all a coincidence?”

They’ve got a point. This situation begs for a UFT (Unified Failure Theory, or, as I sometimes call it, Unified Fuck-Up Theory), something that pulls it all together. But could we get a non-crazy one?

The meritocracy did it. If you read classic mysteries, you’ve seen this situation before: The clues link up here and there, but don’t make sense when you put them all together. Usually that means that the murderer is somebody who is off your radar completely, either because you’re trained not to see them (the butler) or you trust them implicitly (the vicar or the victim’s loyal-but-mousy sister).

That’s the approach Chris Hayes takes in Twilight of the Elites. Whatever ties these failures together must be something we’re incapable of doubting. Otherwise we’d have seen the connection by now.

What is it that all our smartest people believe in implicitly? The meritocracy. The principle that the most talented, hardest working people should rise to the top.

And while belief in the meritocracy is self-serving for those who do make it to the top, it’s more than that: All the social progress of the last half-century — civil rights, women’s rights, gay rights — justified itself in meritocratic terms: If you are good at what you do, you should rise, even if you don’t look like the people currently on top.

But what if elite failure — bankers who can’t bank, representatives who can’t represent, immoral moral leaders, and so on — is the dark side of the meritocracy?

What is meritocracy? Hayes says meritocracy depends on two principles: inequality and mobility. There is a top to rise to, and nothing but your own limitations can stop you from rising.

The problem is that the combination is unstable: When inequality passes a certain point, the people on top become powerful enough to screw up mobility. Eventually, no matter where they came from originally, the meritocratic elite comes to look on itself as a class and pursue its own interests.

The first example Hayes gives is the best: his alma mater, Hunter College High School in Manhattan.

Entrance to Hunter rests on a single “objective” measure: one three-hour test. If you clear the bar, you’re in; if not, you’re out. There are no legacy admissions, and there are no strings to pull for the well connected.

Hunter’s racial/ethnic composition never matched New York City’s, but the gap has widened in recent years. The entering class was 18% black/Hispanic in 1995, but just 4% in 2009.

Why? The test-prep industry. If you’re almost Hunter quality but have money, you can train to pass the test. If you’re just barely Hunter quality and you don’t have money, you’ll get aced out.

New York’s wealthy elite has figured out how to game the system for its children. And Hunter’s selection process has not kept up because … why would it? People powerful enough to make the system ungameable are precisely the ones who want to game the system.

Entitlement. What happens when a meritocracy gets corrupted like this? The appearance of rigorous competition remains, leaving the elite with an undeserved sense of entitlement: We are the ones who passed the test, so we deserve the cookies.

Such a ruling class would have all the competitive ferocity inculcated by the ceaseless jockeying within the institutions that produce meritocratic elites, but face no actual sanctions for failing at their duties or succumbing to the temptations of corruption. It would reflexively protect its worst members, it would operate with a wide gulf between performance and reward, and would be shot through with corruption, rule-breaking, and self-dealing as those on top pursued the outsize rewards promised for superstars.

But such a ruling class would also not be as smart as it thinks it is. It might, for example, think it has come up with a totally new and foolproof way to handle financial risk — and screw it up.

It would also see success as its own justification, an attitude that Hayes connects to Enron and the mortgage bubble. The people making the most money must be the smartest, and anyone who tries to tear them down is just jealous.

Co-opting Obama. Newcomers to the ruling class really did have to jump some hurdles, and as a result they have undue faith in the class they have entered into. President Obama, for example, cannot shake his faith in the experts. Surely the bankers must be the right people to fix the banking system. The businessmen must be the right people to revitalize business. If they weren’t the smartest people in the room, they wouldn’t have made it to the top, right?

Fractal inequality. This is my favorite phrase from the book. No matter how high you rise — the 1%, the 0.1%, the 0.001% — there always seems to be a higher level where the real action is. Again, Hayes uses his own experience well: When he finally got an invitation to the Davos meetings, it seemed like evidence that he had really made it. But once there

you realize that in the context of Davos attendees, you are a member of the unwashed masses

And the people you look up at are the unwashed masses of an even higher level.

As a result of this fractal inequality, everybody is constantly struggling to rise higher, grasping for whatever advantage they can get, and no one reaches a position where they can relax and turn a beneficent eye to the people below.

Distance. Representative democracy was supposed to close the distance between the rulers and the ruled. Leaders were supposed to spring up from among the people, and then go off to represent them in Congress.

Again, that’s been circumvented. No one who isn’t already well connected can hope to raise the money necessary to run for Congress or just about any other major office. And so we have a huge social distance between the leaders and the led.

That distance leads to disasters like New Orleans. The evacuation worked very well, Hayes points out, for people with cars. The leadership just underestimated the number of people without cars or what they would be likely to do, even though that information was available if anyone had thought to look for it.

So that’s the picture in failure after failure: A entrenched and entitled elite, hyper-competitive within itself, but distant from the people their actions affect.

What to do? It’s a basic part of our political rhetoric that we want equal opportunity, but want the government not to try to equalize outcomes. Hayes thinks that position is naive. With sufficient inequality of outcome, equality of opportunity is impossible. Meritocracy needs some inequality (or there’s nothing to win). But too much inequality destroys the meritocracy itself. So Hayes’ solutions are all about seeking more equality of outcome.

A second approach is something I’ll explore next week: moving towards a more anarchic system, where less responsibility is delegated and less is expected or demanded of elites. The text for that discussion will be The Leaderless Revolution by Carne Ross.