Sociation Today

    In this journal ten years ago, Robert K. Miller Jr. and I published an article, "The Meritocracy Myth" (2004) that summarized the main themes of a book that we had published with the same title. This article is an update and summary of the third edition of book, The Meritocracy Myth (2014). In The Meritocracy Myth, we challenge the widely held assertion that in America people get out the system what they put in it based exclusively or primarily on their individual merit. According to the meritocracy myth, America is a land of unlimited opportunity in which individuals can go as far as their individual talents and abilities can take them.

    We do not say that individual merit is a myth; rather, we assert that the presumption that the system as a whole fundamentally operates on the basis of merit in determining who gets what and how much is a myth. Non-merit factors that neutralize, suppress, or even negate the effects of merit also matter. We contend that the dominant ideology of meritocracy overestimates the effects of merit on economic outcomes like income and wealth while underestimating the effects of non-merit factors. All of the merit and non-merit factors we identified in the first edition of The Meritocracy Myth are still operative. In the ten years since publication of the first edition of The Meritocracy Myth, trends suggest that the non-merit factors have likely become even more important.

     I will first briefly summarize the merit and non-merit factors related to getting and staying ahead in America that we initially identified in The Meritocracy Myth.   Next, I will discuss recent trends that have likely increased the importance of non-merit factors. Finally, I will discuss policy proposals and prospects for the future.

On Being Made of the Right Stuff

In The Meritocracy Myth, we identified a formula for success that is generally associated with individual merit. We refer to this formula as "being made of the right stuff" which includes having innate talent, working hard, having the right attitude, and playing by the rules.

Innate Talent or Capacity

The central issue is not whether being smart, clever, or shrewd or possessing extraordinary cognitive or physical capacity helps at least some people get ahead. It clearly does. The issue is how much difference does it make and for how many. This is a complex issue and it is difficult to know precisely what mix of innate endowments and environmental influences affect economic outcomes. Most social scientists and neuroscientists now conclude that what matters is a combination of both and that these factors interact in complex ways. Capacities alone produce no effects. We do not know, for instance, how many potential world class violinists there are out there who have the coordination and "ear" for music to become world class violinists but who never picked up a violin. What matters more than capacities alone is that capacities are identified, developed, and cultivated to an elite level. Beyond minimum thresholds (i.e., being smart enough, being talented enough, being coordinated enough, and so on) evidence suggests that additional increments of raw capacity probably have negligible economic return for most people in most fields of endeavor. In short, we contend that sufficient talent or capacity to be economically successful is not rare or in short supply; instead, there are likely vast pools of untapped innate talent or capacity within the general population that are never identified, cultivated, or fully realized.

Hard Work

When Americans are asked to identify reasons why people are successful, they almost always answer "hard work" or some variant. This conventional wisdom is rarely questioned. However, what does working hard really mean? Does it refer to the number of hours worked, the intensity of effort expended per unit of time worked, or the number of calories burned in the execution of work tasks or some combination? The data indicate that Americans in general work more hours than workers in most other industrial societies. There is also a biological limit to how many hours one person can work in any one day. Among Americans who work full time, there is simply not enough variation in hours worked to account for the substantial and growing extent of income and wealth inequality. This is because compensation for work is more directly related to the kind of work people do rather than the number of hours worked or the intensity of effort exerted (Kalleberg, 2011). At the top of the system, the really big money in America comes not from working for a living at all but from ownership of property—especially the kind of property that produces additional wealth such as stocks and bonds, real estate, business assets and so on. Much of this type of wealth is inherited which requires neither talent nor hard work. On the other hand, those who work the most hours and expend at least the most physical effort in society are often the least well paid. Hard work matters, but in terms of compensation, what people do matters much more than how "hard" they are doing it.

Having The Right Attitude

Having the "right attitude" is associated with qualities such as ambition, a sense of personal responsibility, willingness to defer gratification, persistence in the face of adversity, willingness to take risks and so on. Attitudes are related to other attitudes and nuances of meaning among them tend to blend together so pinpointing a particular combination of "right" attitudes for success becomes difficult. Attitudes or orientations that, for instance, make for a successful insurance salesperson may be different than attitudes or orientations that make for a successful novelist. It is also not clear what attitudes are individually determinative of economic success as opposed to being merely associated with it or a consequence of it. It is one thing, for instance, to think of the poor as having a present time orientation because they are thrill seekers who live for the moment and another thing altogether to say that, regardless of one's personal value system, one is forced to be present oriented if you are not sure where your next meal is coming from. Much of what passes for "the right attitude" is also likely to be at least partially the result of differential access to preferred forms acting and behaving such as comportment, demeanor, and presentation of self to others (interpreted by others as "attitude") but is more of a reflection of social class background than uniquely personal or individual attitudes.

Cultural values such as heavy emphasis on educational achievement and entrepreneurial success are sometimes associated with more economically successful minority populations such as some Asian ethnic groups. While these values may be associated with higher levels of economic success, these orientations may also have structural origins. There is some selection bias, for instance, among recent Asian immigrant populations of persons with already high levels of educational and professional achievement. Entrepreneurial activity also may be prompted by both discrimination in wage employment and by the capacity to pool capital for investment among extended kinship networks and ethnic groups with communal orientations more common in some cultures than others. In short, such cultural values may have some effect on economic outcomes but these too are often mediated through economic and structural circumstances (Wilson, 2009).

Playing By The Rules

"Playing by the rules" or having high moral character and virtue is also often considered part of the merit formula for success. However, there is little evidence that the economically successful are any more honest than the less successful. While honesty and integrity are certainly worthy goals in their own right, we suspect that playing by the rules probably limits rather enhances prospects for economic success. The logic of this argument is that those who limit themselves to strictly honest means to get ahead have fewer opportunities to do so than those who do not limit themselves in this way. The indirect evidence for the wealth-enhancing character of unethical behavior comes from the significant amount of white collar crime in America. Such criminal activity includes corporate fraud, health care fraud, financial fraud, mortgage fraud, insurance fraud, marketing fraud, and money laundering. Much of this type of crime is hidden in financial complexities and often goes undetected. Suffice it to say at least some of the wealth of financiers, executives, and professionals has been acquired through less than ethical means. This is in addition to wealth realized from the sometimes highly lucrative so-called "irregular" or "under the table" economy much of it related to vice in the form of drug trafficking, prostitution, pornography, racketeering, smuggling, gambling and the like. Clearly wealth itself is not an indicator of moral superiority.

Non-merit Barriers to Mobility

In the first edition of The Meritocracy Myth, we identified a variety of non-merit factors that collectively blunt the effects of merit factors and limit opportunity for mobility. I will briefly summarize these factors below.

Inheritance

The most important of these non-merit factors is the effect of inheritance. Getting ahead in American is often described in the image of a foot race with the fastest runner—presumably the most meritorious--breaking the tape at the finish line. But the race to get ahead does not start anew with each generation. Instead, the race is more like a relay race in which we inherit a starting point from our parents. With the rare exceptions of childhood abuse or neglect, most parents want the best for their children and will do what they can to invest in their children's futures. What differs is not the motivation of parents to invest in their children's futures but the capacity of parents to do so. We identify a set of cumulative non-merit advantages that are available in varying degrees to those starting further ahead in the system to all but the poorest of the poor who have no advantages to provide. In this sense, only those who start out life at the very bottom of the system rely on merit alone to get ahead. All others pass on at least some non-merit advantages to their children which include enhanced childhood standards of living, differential access to networks of power and influence, differential access to prestigious cultural capital, intervivos gifts or transfer of material resources from parents to children while both are still alive, greater health and life expectancy at birth, and the inheritance of bulk estates when parents die. To the extent that parents are ultimately successful in advancing their children's future through investments they make or advantages that are passed on to children who start further ahead in the race to get ahead, then the system operates on the basis of inheritance rather than merit, with the effects of inheritance coming first rather than the other way around.

As wealth becomes more concentrated, the capacity of those at the very top of the system to pass on advantages to successive generations also increases. In a recent comprehensive analysis of inequality trends worldwide, wealth economist Thomas Piketty estimated that at least 50-60 percent of all total private capital held in the United States is derived from inheritance (2014:428). Given current trends, he anticipates that this percentage will likely increase in the future, especially if overall economic and demographic rates of growth continue to decline. This is because lower rates of economic and demographic growth in capitalist societies create less dynamism in the system as a whole and therefore less overall opportunity. These trends have the effect of locking in advantages of those already at the top of system.

Social Capital

Inheritance, in turn, is related to access to social capital, or the value of who you know. Almost everyone has networks of friends and relatives. What differs is the capacity of these networks in terms of access to power, information, and resources. In short, it helps to have family and friends in high places. Americans have a love/hate relationship with social capital. We love it when it works for us (that is, when we are advantaged because we "know" someone who can assist us) but we hate it when we are victimized by it (for instance, losing a job or a promotion over a less meritorious person who had connections higher up the food chain than we do). A growing body of research supports the folk wisdom that says that who you know matters for job placement and promotion beyond merit alone (cf. DiTomaso 2013; Fernandez and Galperin, 2014).

Cultural Capital

Inheritance is also related to access to prestigious forms of cultural capital. Cultural capital refers to knowledge of ways of life of the groups to which we belong which include norms, values, beliefs and codes of conduct. Full acceptance in privileged groups in society requires knowledge of the ways of life of those groups. The culture of the group separates insiders from outsiders. Knowing and abiding by these cultural ways of life are required to maintain one's status as a member in good standing with the group. By growing up in privilege, children of the elite are seamlessly socialized into elite ways of life through a kind of social osmoses. This kind of cultural capital has been commonly referred to as "breeding," "refinement," "social graces," "savoir faire" or simply "class" (meaning upper class). Those who aspire to elite circles must acquire this form of cultural capital from the outside in, which is much more difficult to learn and constantly risks exposure of more humble origins or negative labeling as a "social climber." Not having the "proper" demeanor and comportment associated with the most already privileged groups in society may be misinterpreted as "evidence" of lack of individual merit or worthiness unrelated to the performance of work tasks. Recent research confirms a pattern of cultural advantage for affluent children in educational settings (Calarco, 2014; Lareau, 2011) as well as a cultural advantage of job seekers beyond merit considerations who share cultural traits with perspective employers in the labor market (Rivera, 2012).

Education

    Education is both a merit and non-merit factor in the race to get ahead. It is a merit factor in the sense that grades, credits, and diplomas are "earned" and cannot be directly inherited, purchased, or appropriated. However, education is also a non-merit factor since access to educational opportunities and quality of education received is highly tracked by social class and as a result educational attainment is largely reproduced across generations. Unequal access to educational opportunities occurs for a variety of reasons, including unequal funding of public schools largely based on local property taxes, the option of exclusive private schools for the wealthy, and the unequal effects of social and cultural capital on educational attainment.

     A substantial body of new evidence on the effects of education on life outcomes emphasizes the casting of the "long shadow" of early childhood development on subsequent academic and adult success (Ermisch, Jantti, and Smeeding, 2012, Duncan and Murnane, 2011, Alexander, Entwisle, and Olsen, 2014; Smeeding, Erikson, Jantti, 2011). Cognitive and sociobehavioral traits related to "school readiness" are highly related to socioeconomic background. Privileged children are already ahead of the less privileged in cognitive ability, social skills, and preferred forms of cultural capital when they enter school. Privileged children attend better schools in safer neighborhoods staffed by more competent and appropriately credentialed teachers. In addition to options for private schools and locations in upscale communities with reputations for "good schools," privileged parents invest more in a variety of other educational amenities for their children such as books, computers, tutoring and preparation services, music lessons, summer camps, educational travel and other educational and cultural enrichment activities. Moreover, the gaps in spending for these types of activities between high-income and low income parents have increased over time (Kornrich and Furstenberg, 2013). Privileged parents are also likely themselves to have high educational attainment and to be familiar with "how the system works" and "how to work the system," intervening with teachers and school administrators, often very assertively, on behalf of their children (Lareau, 2000).

     At the college level, trends are showing increase costs of higher education and rising amount of student borrowing and debt at the same time there is a diminished job market for college graduates. Government subsidies for higher education have been sharply reduced and the costs have been passed on to students and their families. Student debt nearly tripled between 2004 and 2012 and by 2010 surpassed credit card debt as the second largest form of household debt after mortgages (Brown et. al. 2014).   Ultimately, this makes access to higher education less available and more costly for the less affluent independent of the merit of individual students.

Reduced Rates of Self Employment

In addition to education, being self-employed and starting a new business has historically been an important pathway toward upward mobility in America. Indeed, starting a business from scratch, striking out on your own, and being your own boss in many ways epitomizes the American Dream. Being self-employed exemplifies independence, initiative, self-reliance and rugged individualism—virtues held in high regard in American society. However, the percentage of the labor force which is self-employed has dramatically fallen overtime from an estimated 80% in 1800 to approximately 10% overall and about 7% of the nonfarm labor force today. Despite the entrepreneurial mystique surrounding self-employment, the reality for many is less than glamorous with many working long hours often for effectively lower earnings after having to fund their own health care, vacations, and retirement benefits. Some reluctantly resort to involuntary forms of self-employment when wage or salaried jobs are unavailable, including self-employment in the irregular and often illegal "underground" economy. The decline in self-employment has paralleled the ascent of large corporations and franchise operations. Because of economies of scale and the ascendance of large scale corporations that create barriers of entry for sole proprietorships, we contend that entrepreneurial pathways to mobility are less likely now than in the past.

Luck

We also identify luck—both the good and bad kind—as a non-merit factor affecting who gets ahead and who does not. The best chance for securing a job that matches one's skills and training is to be at the right place at the right time. In thinking about who ends up with what jobs, Americans tend first to think about what economists call the "supply side." In labor economics, the supply side refers to the pool of available workers to fill jobs. The qualities of individual workers and their suitability for employment, however is only half of the equation. The other half, the "demand side" refers to the number and types of jobs available. That is, what kinds of jobs are available, how well do they pay, and how many individuals are seeking them? In recent decades, the fastest growing segment of the American labor force has been the lower white collar service sector while there has been a sharp drop in the higher paid manufacturing and industrial sectors.

Although Americans are getting more education, the economy is not producing enough jobs with good pay, good benefits, security and opportunities for advancement commensurate with the capacities of workers. A recent Federal Reserve Study, for instance, showed that in 2012 33% of all college educated workers between 22 and 65 years old held jobs that do not require a college level degree; among more recent graduates between 22 and 27, 44 % held non-college level jobs and among the most recent 22 year old graduates 56% held non-college level jobs (Abel, Deitz, and Su, 2014). These data indicate that some college graduates who are underemployed eventually move into college level jobs but the demand side is clearly not absorbing into college level jobs all who are otherwise qualified and that the gap is increasing over time.

Beyond the prospects for income and occupational success, being at the right place at the right time also matters for acquiring wealth. Indeed the willingness to take chances and to risk capital is the primary justification for capitalism. If it would be possible to predict the future with certainty, there would be no risk. Although defenders of merit often deny or downplay the effects of luck, striking it rich through inheritance, entrepreneurial ventures, investments or the lottery necessarily involves at least some degree of just plain luck. In short, the imperfections and ultimate uncertainty of both the stock market on Wall Street and the labor market on Main Street add an undeniable element of luck into the mix of who "wins" and who "loses."

Discrimination

Finally, we also identify discrimination as a non-merit factor. Indeed, discrimination is not only a non-merit factor, it is the antithesis of merit. In addition to race and sex discrimination which have the most victims, we identify and document other forms of discrimination including age discrimination, religious discrimination, discrimination based on sexual identity and orientation, non-work performance discrimination against the disabled, and "lookism" or preferential treatment of the attractive. Lookism is an often overlooked form of discrimination but one that matters often in subtle but substantial ways. Although discrimination is down, it is not out. The most public and overt forms of discrimination have become socially unacceptable, driving a significant amount of the remaining discrimination underground in more coded or tacit forms but with equally devastating effects. Even as some forms of discrimination have been reduced, the residue of prior discrimination continues to reach into the present both in the form of cumulative costs of lost opportunity for its victims and in the creation of unequal starting points for successive generations (Stainback and Tomaskovic-Devey, 2012).

Recent Trends in Inequality

Below I identify several trends that have affected the dynamics of inequality since the publication of the first edition of The Meritocracy Myth. The net effect of these trends has been to reduce the capacities of individuals to get ahead in America based on individual merit alone and to further solidify non-merit advantages for those who are already privileged, especially at the very top of the system where income and wealth is highly concentrated. If these trends continue, America society may be moving further away from Thomas Jefferson's meritocratic vision for an American society based on a "natural aristocracy of talent and virtue" and increasingly resembling a more feudal like system in which sustained advantages at the very top of the system perpetuate an economic aristocracy of birth and privilege.

Increased Economic Inequality

For the past several decades, levels of income and wealth inequality in the United States have increased, especially between the very wealthy and everyone else. Federal Reserve data show that the total share of all income going to the top 5% of households increased from 31% of the total in 1989 to 37% of the total in 2013 whereas the income share of bottom half of households decreased from 16% of the total in 1989 to 14% of the total in 2013 (Yellen, 2014). Wealth disparities have increased even more. The share of all available wealth held by the wealthiest 5% of households increased from 54% in 1989 to 61% in 2013 whereas share of available wealth held by the bottom half of all households combined fell from just 3% in 1989 to only 1% in 2013 (Yellen, 2014). The increasing concentration of income and wealth toward the top of the system means that it is even more difficult to move up in the system based on merit alone. There are two key reasons for this. First, the distance between the bottom of the system and the top increases so that it becomes more difficult to close the gap as the gap itself is increasing. Second, already privileged families at the top have more resources available to pass on advantages to future generations and to insulate themselves from downward mobility. Therefore, the cumulative non-merit advantages described above are further augmented and solidified.

Globalization, De-industrialization, and De-unionization

Immediately following the post-World War II period, the United States easily dominated world markets since most of its pre-war industrial competitors had much of their industrial capacity damaged or destroyed. By the 1970s, these countries, especially Japan and Germany, had recovered and with U.S. help had rebuilt with new and efficient technologies and were emerging as serious global competitors. In 1973, an oil embargo imposed by the newly formed Organization of Petroleum Exporting Countries (OPEC) sharply increased production costs, which was especially detrimental to nations and industries with the oldest and least efficient production facilities. U.S. auto, steel, textiles and chemicals industries—the backbone of postwar industrial strength were especially hard hit. Newly emerging industrial powers especially India, China, and South Korea added to these global competitive pressures. The combination of increased costs of production and increased foreign competition reduced corporate profits. American corporations responded to these new competitive pressures through a variety of strategies. Domestically, factory production shifted away from the urban industrial north-central and northeastern parts of the United States to locations in the South and Southwest with lower wages, less unionization, and less government regulation. To further reduce production costs, corporations aggressively shifted production and technical support services abroad. Millions of manufacturing jobs were lost. New jobs were created but most of these were in the "soft" low-wage, low-skill, low unionized service sector of the economy. The growth sector of the American economy was being transformed from auto, steel and oil to fast food, day care, and shopping malls.

New communication technologies accelerated the globalization of markets. The trade deficit for the United States dramatically increased as imports exceeded exports, placing downward pressure on domestic wages and benefits. Under these conditions, corporations often extracted wage and benefit "concessions" and "givebacks" from workers and moved to replace high paid workers with outsourced contract labor and dramatically increased part-time, temporary, and contingent labor, Corporations also aggressively moved to break up existing unions and prevent new ones from forming, further reducing wages. Rates of unionization have sharply fallen from 20.1 % of the labor force in 1983 to 11.3% in 2013 (U.S. Department of Labor, 2014). Under these conditions, corporate profits and CEO pay sharply increased while ordinary worker wages stagnated or declined.

The Financialization of Capital and the Great Recession

At the top of the pyramid chain of corporate dominance in the U.S. economy are big banks and other major financial institutions such as insurance, securities, credit, and mortgage companies. This is the "paper tiger" sector of the economy not involved in the making or selling of "things" but in moving money around; that is, in the buying and selling of money, credit, or financial risk. As with other sectors of the U.S. economy, the financial sector has become increasingly consolidated. In 1970, the largest five U.S. banks held 17 percent of total industry assets; by 2010, the largest five U.S. banks held 52 percent of total industry assets (Rosenblum 2011). This growing level of consolidation along with deregulation of the finance industry contributed to a high risk "too big to fail" environment in which a major portion of the America economy was controlled by a few large financial entities operating under minimal regulatory oversight. This environment set the background for a series of events that would trigger the onset of The Great Recession in 2007.

Following the structural shifts in the U.S. economy associated with globalization and de-industrialization, the U.S. economy was kept partially afloat by the dot-com technology bubble of the 1980s and 1990s which crashed in 2000. To help stimulate the economy, the Federal Reserve reduced interest rates (the cost to borrowers) to practically zero. This meant that banks could borrow money cheaply and get good return by loaning it back out at even reduced rates. The availability and low cost of credit, especially for mortgages, stimulated the housing market and fueled a rapidly rising housing bubble. The federal government had set up a program to help low income families become home owners and insured loans against default and provided relaxed rules for eligibility. These "sub-prime" loans were then "packaged" and resold by banks and financial institutions to investors. Market confidence in these securities eventually eroded and the supply of credit was cut back. Housing prices plummeted and huge numbers of borrowers defaulted on their mortgage loans. Banks and investment companies were left holding huge sums of these "toxic assets" for which they did not have sufficient capital reserves to cover the resulting losses. With banks and investment companies unable to absorb the losses, the economy as a whole rapidly dipped into decline. The federal government, itself deeply in debt, reluctantly stepped in and bailed out the credit market at a staggering sum of over $700 billion.

All of these events had devastating effects for workers, including increased unemployment, stagnant wages, reduced wealth, and increased debt. Unemployment rates for instance, doubled from the pre-recession level of 5% to over 10% at the height of the recession. Since 2009 the economy began to recover but the recovery has been uneven. Although the stock market largely recovered by 2010 and since 2013 has reached record highs, jobs and wages have lagged behind. Unemployment rates have very gradually receded to almost pre-recession levels but wages remained stagnant. Although the big banks were largely bailed out, average homeowners were not. In the immediate aftermath of the financial collapse, many homeowners were "underwater" with their mortgages, owing more on their homes than they were worth. Housing prices have only recently begun to recover but have not yet reached pre-recession levels. This is significant because for most wage employees, the equity they have in their homes is the greatest source of their personal wealth. One of the main reasons that the stock market has recovered faster than jobs, wage income, or housing prices is that investment capital can move much more quickly than labor. Investment capital, for instance, can move rapidly around the world wherever returns are greatest but workers generally cannot either in terms of jobs they hold or places they live. In sum, the net effect of the Great Recession has been increased income and wealth inequality.

The Increasing Marriage Gap

There has always been a strong tendency for people to replicate their own social profile in marriage. That is, people tend to marry people of similar age, race, education, religion, and social class background. Several observers have noted that the marriage market in the United States is increasingly consolidating by education and social class (Carbone and Cahn, 2014; Rosenfeld, 2008; Schwartz and Mare, 2005). Affluent men and women are likely to meet potential marriage partners in prestigious educational and professional workplace settings where they are likely to associate with people like themselves. With delayed age at first marriage, delayed time to start families (until educations are complete and careers established), and lower birth rates among the wealthier, affluent parents can and do invest much more of their combined resources in their children's futures than the less affluent. Poor and working class families, on the other hand, are much less likely to be married in the first place, much more likely to have children early and outside of marriage, and to experience familial disruption through divorce—all of which have adverse economic consequences (Carlson and England, 2011).

Increasing Political Influence of the Wealthy

In the first edition of The Meritocracy Myth, we identified one of the characteristics of the upper class as being politically powerful. In a pure form democracy, everyone has an equal say in the political process. However, the reality is that those who have more resources have more say so in what happens. To the extent it is possible to convert economic power into political power, democracy is compromised. The specific mechanisms by which this influence is exerted have been well documented (cf. Domhoff, 2009 Gilens, 2012) and include direct campaign contributions, indirect funding through lobbying, think tanks and policy groups, and ownership of media outlets—all of which are dominated by propertied interests. Much of the influence exerted is subtle and indirect ways such as insider access to representatives. This is significant in terms of the prospects for meritocracy since the wealthy can use their political influence to accrue further advantage through governmental policies including taxation, regulation, and spending. To the extent that propertied interests prevail, the system gets further tilted in favor of the already privileged enhancing the cumulative effect of non-merit factors that we identify. The extent of money flowing into the American political process has dramatically increased in recent election cycles. Moreover, an increasing share of this funding is coming from Political Action Committees and other outside groups with a substantial portion of these outside sources coming from "dark" money sources or funding sources whose donors are not disclosed. The increase in the costs of campaigns means that if a candidate cannot raise significant sums they cannot stand for election in the first place and that once elected, elected officials end up spending an increasing amount of their time raising money for the next election cycle. The capacity of the wealthy to influence the political process was further enhanced by the key decision in the 2010 Citizens United vs. Federal Elections Commission Supreme Court case which now allows unlimited funding by corporations and other organizational entities to provide independent political expenditures that support or oppose candidates as long as there is no direct connection or communication to candidates or their campaign organizations for which existing funding limits still apply. These restrictions, however, are often circumvented and do not significantly lessen the ultimate capacity of propertied interests to disproportionately influence political outcomes.

What Can Be Done?

During the long wage recession and increasing economic inequality since the 1970s, Americans have resorted to a variety of individual coping strategies to try to make ends meet including both spouses working, having fewer children, working more hours, delaying retirement, and borrowing more. Each of these individual coping strategies have upper limits which are quickly being realized—there are only two spouses who can work, fertility cannot be reduced below zero, there are only 24 hours in a day, retirement cannot be postponed indefinitely, and a spiral of borrowing and spending eventually results in financial collapse. None of these individual coping strategies will make the system as a whole fairer or more just. Changes of this magnitude would require larger structural changes in the organization of society as whole.

In the first edition, we identified several reforms that could make the system operate more closely to meritocratic principles that Americans in principle endorse. These include reducing current forms of discrimination, pursuing affirmative action to address the residual effects of past discrimination, redistributing wealth through philanthropy, adopting a more genuinely progressive tax system, and directing government spending toward creating greater opportunity of those toward the bottom of the system. Although some progress has been made on these fronts in the ten years since the publication of the first edition, the system as a whole has not fundamentally become more meritocratic.

Overt discrimination continues to decline in society as a whole, although the lingering residual effects created by past discrimination continue to have effects in the present, especially with regard to unequal starting points across generations of those affected. Race based affirmative action policies designed to address the issue of unequal starting points have been increasingly restricted by the courts in recent years. Currently, race may still be considered a factor in promoting the goal of diversity, for instance, in college admissions process. However, problems of identifying racial categories and decoupling race from class disadvantage may ultimately eliminate any form of race based affirmative action which may or may not be replaced with various forms of class based affirmative action.

With respect to philanthropy, several prominent top wealth holders including Bill Gates, Warren Buffett and Mark Zuckerberg have pledged to eventually give the bulk of their accumulated fortunes to charity. This practice, which is becoming more common among the very wealthy, at least potentially slows down a cycle intergenerational transmission of wealth at the very top of the system. Despite these prominent examples, however, the vast bulk of accumulated familial wealth is still transferred intergenerationally. Besides reducing wealth accumulation at the top, philanthropy has at least the potential to simultaneously increase opportunity for those at the bottom, depending on both the amounts donated and how those charitable dollars are spent. While the sums donated to philanthropic causes are often significant in terms of the total amounts donated, on scale they are not sufficiently large enough to fundamentally change the overall extent of inequality in society. Moreover, a large portion of these philanthropic donations go to religious organizations, hospitals and medical research, universities, the arts and other such activities which while doing much good in society are not targeted directly to creating greater opportunity for the less affluent.

With respect to taxes, as part of a fiscal deal in 2013 to avoid a government showdown the nominal top federal income tax rate (before deductions, exclusions, and other loopholes) increased slightly from 35% to 39.5% for incomes over $400,000 if single and $450,000 for couples. The effective tax rate (the rate actually paid) is typically much lower. Recent data from the Internal Revenue Service, for instance, show that in 2010 the 400 taxpayers with the highest incomes in the U.S. paid an effective average federal income rate of 18.04% (IRS, 2014). Also in 2013, the thresholds for exemption from estate tax, the primary means of taxing the transfer wealth across generations, were significantly raised so that only estates over $5.12 million for individuals and over $10 million for couples are subject to federal estate tax, which exempts almost all but a tiny proportion of all estates. The United States continues to be an overall low tax country compared to other advanced industrial societies and at best only modestly progressive.

One major form of government spending that has been instituted since the first edition is the Affordable Care Act of 2010 which was established to provide health insurance at subsidized rates to low income individuals and families, especially targeted at segments of the population who previously were uninsured. Other reforms include eliminating life-long caps on insurance coverage and eliminating exemptions for those with preexisting health conditions. This type of government subsidy and reform helps to create the potential for more opportunity for individuals and families who could not otherwise invest in getting ahead if they were financially burdened by medical illness or injury. Conservative political opposition to the Affordable Care Act, however, has been robust and the future viability of the program remains uncertain. Further government investments in education and job creation in particular could help create more opportunity especially if targeted to those furthest behind in the race to get ahead. Concern about government spending and the role of government in such activity, however, remains strong.

In the third edition of The Meritocracy Myth, we added two other possible means of closing the inequality gap and establishing a more meritocratic system. One way is to focus on asset accumulation for low income groups (Conley 1999, Shapiro 2004). To lack capital in a capitalist society is to be at a severe economic and social disadvantage. In short, it often takes money to make money, even for those relying otherwise on just meritocratic potential. Asset building policies targeted at those of modest means such as government assistance for home purchases or starting and expanding businesses as well as tax incentives to encourage savings and investments could help stimulate wealth creation at the bottom of the system. Such policies, however, would require both seed money to establish and the political will to do so.

Another possibility for reform might be a resurgence of the labor movement or a poor people's movement that would bring greater attention to the increasing inequality gap and unequal starting points in the race to get ahead. The Occupy Wall Street movement started in 2011 at the height of the Great Recession is one example of this kind of reform movement. Although the movement itself quickly dissipated, it did bring national attention to the concentration of wealth among the top 1% with its often repeated "We are the 99%" slogan. If inequality continues to increase along with greater public awareness, similar grassroots movements are likely to emerge.

In addition to the reforms noted above, in the third edition we contend that reforms in the organization of economic and political institutions could decrease inequality and create more equitable conditions in society. Corporations could be reformed in such a way as to make them more politically accountable and more socially responsible with greater government regulation and oversight in the public's interest. Political institutions could also be reformed in ways that would make them more genuinely democratic and responsive to the needs of its citizens. Chief among such reforms would be reducing the influence of money in politics.

Finally, we contend that exposing and debunking the meritocracy myth is in itself an important reform. It is important because the myth of meritocracy provides an incomplete explanation for success and failure that mistakenly exalts the rich and condemns the poor. In addition to merit factors that are at work, we also need to recognize that inheritance, luck, discrimination and a variety of other circumstances beyond the immediate control of individuals are important determinants of where one ends up in the system. Our conclusion remains the same as ten years ago: We may always have the rich and poor among us, but we need neither exalt the former nor condemn the latter.

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