26 October 2019

The new caste system

 Michael Hobbes writes:
“The sense that there’s a self-​sustaining and self-​dealing group at the top isn’t wrong,” Reeves said. “When you create a ‘meritocratic’ selection process where the production of merit is increasingly skewed by parental income, you end up with a hereditary meritocracy.” The 'Glass Floor' Is Keeping America's Richest Idiots At The Top, Michael Hobbes, 'Huffington Post', 13 October
True, but what is a meritocracy in one set of circumstances becomes something different when history moves on. What happens to what was (perhaps) a meritocracy is exactly what happens to any other organisation when faced with significantly changing circumstances: it begins to devote its time and energy to self-perpetuation rather than its stated, original, goals. Every organisation does it: be it a government body, a trade union, church or university. In the private sector too, large corporations, especially monopolies, find it more expedient to spend their time stifling competition and manipulating the regulatory environment to favour big, established firms like themselves. So I would not use the phrase 'hereditary meritocracy' to describe our ruling class: rather 'hereditary elite'. A caste, in fact.

We are beginning to see the result: a self-entrenching elite. In the English-speaking world (and perhaps beyond) we have a bifurcated society, in which those whose parents own property can aspire to own property, and those whose parents don't own property have very little chance of ever being able to buy a house, however hard working they might be.
Inequality in Britain is “now entrenched from birth to work”, according to a damning report by the government’s social mobility commission[.] Social mobility in UK 'virtually stagnant' since 2014, Richard Adams, the 'Guardian', 30 April
Part of the problem is that we have government of the people, by the people rich, and for the people rich. And one reason for that is that our policymaking processes are so obscure and protracted that only the rich (or their employees) have the means or capacity to follow it closely and thereby influence it. Ordinary people are alienated from the decisions that affect our lives.

One of the two underlying principles of the Social Policy Bond idea is that we - that is, society - should target goals that are meaningful to ordinary people; goals that we can understand and with which we can identify. So instead of politicians making themselves feel important by spending hours tinkering with various bodies' funding and regulatory arrangements, they would concentrate on articulating society's goals and raising the revenue for their achievement: things that government is actually quite good at. The achievement of these goals, on the other hand, is best done via a market. In economic theory, and on all the evidence, markets are the most efficient way of allocating society's scarce resources. By issuing Social Policy Bonds, government could target long-term, ambitious goals, without having to think about how to achieve them. That means, of course, that it would relinquish its power to decide who receives funding, and that is the sticking point. People rarely surrender power voluntarily.

So perhaps the more likely vehicle for the Social Policy Bond idea will be driven by philanthropists. I've tried to reach them, but so far without success.

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