The Meritocracy Trap

by Daniel Markovits

  not seen since the Black Death: See Simon Szreter and Anne Hardy, “Urban Fertility and Mortality Patterns,” in The Cambridge Urban History of Britain, 1840–1950, ed. Martin Daunton (Cambridge: Cambridge University Press, 2000), 671: “The 1830s and 1840s may well have been the worst decades ever for life expectancy since the Black Death in the history of those parishes which were now experiencing industrialization.”

  Chapter One: The Meritocratic Revolution

  sixty-four hours a week: Hans-Joachim Voth, “The Longest Years: New Estimates of Labor Input in England, 1760–1830,” Journal of Economic History 61, no. 4 (2001): 1074. Hereafter cited as Voth, “The Longest Years.”

  exceeded fifty hours: U.S. Census Bureau, Historical Statistics of the United States, 1789–1945 (Washington, DC, 1949), 67, accessed May 24, 2018, www2.census.gov/prod2/statcomp/documents/HistoricalStatisticsoftheUnitedStates1789-1945.pdf.

  the elite despised industry: Thorstein Veblen, The Theory of the Leisure Class: An Economic Study of Institutions (New York: Macmillan, 1899), 19. Hereafter cited as Veblen, Theory of the Leisure Class.

  how hard they worked: This formulation borrows from Voth, “The Longest Years,” 1066, 1075.

  two generations ago: See Chapter 6.

  high school degree or less: See Steven F. Hipple, “Labor Force Participation: What Has Happened Since the Peak?,” Monthly Labor Review, September 2016, accessed November 17, 2018, table 3 (pp. 10–11), www.bls.gov/opub/mlr/2016/article/pdf/labor-force-participation-what-has-happened-since-the-peak.pdf.

  enjoy less leisure: See Chapter 4.

  than they did at midcentury: See Chapter 4.

  Top jobs commonly pay: In 2010, for instance, Steven Kaplan and Joshua Rauh reported that a Wall Street managing director typically made at least $500,000 per year and a partner at one of the nation’s top ten law firms made, on average, $1 million per year. See Steven N. Kaplan and Joshua Rauh, “Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?,” Review of Financial Studies 23, no. 3 (2010): 1004–50, accessed November 17, 2018, www.jstor.org/stable/40604776. Hereafter cited as Kaplan and Rauh, “Wall Street and Main Street.” Robert S. Khuzami was paid upward of $5 million a year when he worked as partner for corporate law firm Kirkland & Ellis from 2013 to 2018. See Ben Protess and Peter Lattman, “A Legal Bane of Wall Street Switches Sides,” New York Times, July 23, 2013, accessed June 2, 2018, https://dealbook.nytimes.com/2013/07/22/a-legal-bane-of-wall-street-switches-sides/. Total annual compensation among the two hundred highest-paid chief executives in the country ranges from roughly $10 million to roughly $100 million. See “The Highest-Paid C.E.O.s in 2017,” New York Times, May 25, 2018, accessed June 2, 2018, www.nytimes.com/interactive/2018/05/25/business/ceo-pay-2017.html. For the years 2015–17, Amazon CEO Jeff Bezos received an annual compensation of over $1.6 billion. See Amazon.com, Inc., Proxy Statement, Annual Meeting of Shareholders, May 30, 2018, accessed June 2, 2018, www.sec.gov/Archives/edgar/data/1018724/000119312518121077/d514607ddef14a.htm.

  dominant path to wealth: See Chapter 4.

  Instead, it embraces: This formulation again tracks the definition given in Scott and Marshall, A Dictionary of Sociology.

  superordinate working class: The term comes from Jonathan Gershuny, “Busyness as the Badge of Honor for the New Superordinate Working Class,” Social Research 72, no. 2 (2005): 287–314, accessed June 2, 2018, www.jstor.org/stable/40971766. Hereafter cited as Gershuny, “Busyness as the Badge of Honor.”

  “You’ll get in if you apply”: See Yale Law School Digital Repository Special Collections series, “Lives of Lawyers,” https://digitalcommons.law.yale.edu/ylslol/.

  the top-ranked school: “The Best Law Schools in America, Ranked,” U.S. News & World Report, 2018, accessed June 5, 2018, www.usnews.com/best-graduate-schools/top-law-schools/law-rankings?int=9c0f08.

  Law School Admission Test: The Yale Law School class of 2020 had a median GPA of 3.91 and a median LSAT score of 173. Of students who took the LSAT between June 2016 and February 2017, 99.2 percent scored below 173. See Lisa Anthony, “Score Distribution—Law School Admission Test,” Law School Admissions Council, June 20, 2017, accessed June 5, 2018, www.lsac.org/docs/default-source/data-(lsac-resources)-docs/lsat-score-distribution.pdf, and “Entering Class Profile,” Yale Law School, 2018, accessed June 5, 2018, https://law.yale.edu/admissions/profiles-statistics/entering-class-profile.

  Roughly 80 percent: To be precise, 85 percent of new offers and 83 percent of total offers of admission were accepted last year. See “Entering Class Profile,” Yale Law School, 2018, accessed June 5, 2018, https://law.yale.edu/admissions/profiles-statistics/entering-class-profile.

  15 percent of applicants: The ABA Standard 509 required disclosures for the top five law schools give the following acceptance rates, total admittees, and class sizes for the cohort of students accepted in 2017: Yale—8.4%, 240, 205; Stanford—9.9%, 392, 180; Harvard—15.8%, 900, 560; Chicago—21.5%, 958, 188; Columbia—20.4%, 1,188, 389. The average acceptance rate among these five schools was 15.2 percent that year. See “ABA Required Disclosures: Standard 509 Disclosure,” American Bar Association Section of Legal Education and Admissions to the Bar, 2018, accessed June 6, 2018, www.abarequireddisclosures.org/Disclosure509.aspx.

  The median students at all five: Median GPAs among students enrolling in the top five law schools ranged from 3.7 to 3.91 in 2017. Median LSAT scores were between 170 and 173, or between the 97.5th and the 99.2nd percentile scores. See Lisa Anthony, “Score Distribution—Law School Admission Test,” Law School Admissions Council, June 20, 2017, accessed June 5, 2018, www.lsac.org/docs/default-source/data-(lsac-resources)-docs/lsat-score-distribution.pdf, and “ABA Required Disclosures: Standard 509 Disclosure,” American Bar Association Section of Legal Education and Admissions to the Bar, 2018, accessed June 6, 2018, http://www.abarequireddisclosures.org/Disclosure509.aspx.

  no more than five: This claim reflects the author’s informed estimate.

  is three times as intense today: See Chapter 5. Admissions competition for places at the broader elite of colleges has also intensified, although from a lower base. The University of Chicago, for example, is more than five times harder to get into than it was just twenty years ago.

  (more than six times the national public school average): See Chapter 5.

  $90,000 per student per year: See Chapter 5.

  “no law school better prepares”: John F. Manning, “Dean’s Welcome,” Harvard Law School, 2018, accessed June 6, 2018, https://hls.harvard.edu/about/deans-welcome/.

  “quite simply, the finest”: Robert Post, “Yale Law School Graduation Speech,” May 18, 2015, accessed June 6, 2018, https://law.yale.edu/system/files/area/department/studentaffairs/document/postspeech.pdf.

  Automated industrial robots: See Chapter 6.

  Innovations in distribution: See Chapter 6.

  Derivatives and other new financial technologies: See Chapter 6.

  And new management techniques: See Chapter 6.

  “there are . . . approximately”: American Bar Association Committee on Economics of Law Practice, The Lawyer’s Handbook (St. Paul, MN: West Publishing Company, 1962), 287.

  “if properly managed”: Deborah L. Rhode, Balanced Lives: Changing the Culture of Legal Practice (American Bar Association Commission on Women in the Profession, 2001), 14, http://womenlaw.stanford.edu/pdf/balanced.lives.pdf. Hereafter cited as Rhode, Balanced Lives, citing Edward Fennell, “The Lure of the Yankee Dollar,” Times (London), July 18, 2000 (quoting Andrew Wilkinson, the managing partner of Cadwalader, Wickersham & Taft’s London office).

  any light work: See “bankers’ hours, n.,” OED Online, accessed June 7, 2018, www.oed.com/view/Entry/15246?rskey=aod4XK&result=2&isAdvanced=false#eid. Early uses even deployed the phrase to contrast the elite’s leisure with the intense labor of working men. As one newspaper observed, “The millio
naire doesn’t put in his eight hours steady every day, like the poor man, but for the sake of argument, we’ll take a banker’s hours—ten to three, one hour off for lunch—four hours work.” John T. McCutcheon, “The Pipe Dreamer’s Club—Session No. 3: Where the Millionaire Has the Better of the Poor Man,” Indianapolis News, July 12, 1902, 15. As recently as 1963, the Washington Post thought it newsworthy to observe, admiringly, “It is well-known that Secretary of Defense Robert McNamara doesn’t keep bankers’ hours at the Pentagon.” Winzola McLendon, “This Early Bird Beats Boss’s Record at Pentagon,” Washington Post, June 30, 1963, F11. These examples come from the expert researches of Fred Shapiro of the Yale Law Library.

  “organization men”: William H. Whyte Jr., The Organization Man (New York: Simon & Schuster, 1956), 3.

  “17 hours a day”: Ho, Liquidated, 89.

  “until midnight or one a.m.”: Ho, Liquidated, 97.

  the extreme job: Sylvia Ann Hewlett and Carolyn Buck Luce, “Extreme Jobs: The Dangerous Allure of the 70-Hour Workweek,” Harvard Business Review, December 2006, 49–59. Hereafter cited as Hewlett and Luce, “Extreme Jobs.”

  “physical presence” . . . “more than one job”: Hewlett and Luce, “Extreme Jobs,” 51.

  More than half of the richest: In 2010, 62 percent of households in the top 1 percent of the income distribution included someone who worked more than fifty hours a week (up from 46 percent as recently as 1983). Only 4 percent of households in the bottom quintile did. See Board of Governors of the Federal Reserve System, Survey of Consumer Finances, www.federalreserve.gov/econres/scfindex.htm. These data are based on intensive, structured, and probing interviews, and they are therefore unusually reliable. In addition, the survey oversamples the richest households. For both reasons, the survey presents an unusually authoritative measure of elite work.

  Overall, prime-aged men: See Chapter 4.

  the badge of honor: See Chapter 4 and Gershuny, “Busyness as the Badge of Honor.”

  First-year associates: Martha Neil, “First-Year Associate Pay Will Be $180K at Multiple BigLaw Firms Following Cravath’s Lead,” ABA Journal, June 8, 2016, accessed June 8, 2018, www.abajournal.com/news/article/cravath_raises_first_year_associate_pay_to_180k_effective_july_1.

  A law firm now exists: Gina Passarella Cipriani, “The 2018 Am Law 100 Ranked by Profits Per Equity Partner,” American Lawyer, April 24, 2018, accessed June 8, 2018, www.law.com/americanlawyer/2018/04/24/the-2018-am-law-100-ranked-by-profits-per-equity-partner/.

  the “top ten” . . . “top five”: These are the fourteen and six schools that, on account of ties and yearly fluctuations, are conventionally understood to constitute the “top five” and “top ten” schools in the U.S. News & World Report rankings. They are: Yale, Harvard, Stanford, Chicago, Columbia, and NYU (the “top five”), and Pennsylvania, Michigan, Virginia, Duke, Northwestern, Berkeley, Cornell, and Georgetown (to round out the “top ten”).

  Law firm profits are conventionally calculated in three ways: total profits, profits per lawyer, and profits per partner. The third—profits per partner—is the most commonly used and also, because partners are the highest-paid workers in the firms, the most relevant for present purposes. In 2015, the five most profitable firms were: Wachtell, Lipton, Rosen & Katz; Quinn Emanuel Urquhart & Sullivan; Paul Weiss; Sullivan & Cromwell; and Kirkland & Ellis. See Gina Passarella Cipriani, “The 2018 Am Law 100 Ranked by Profits Per Equity Partner,” American Lawyer, April 24, 2018, accessed June 8, 2018, www.law.com/americanlawyer/2018/04/24/the-2018-am-law-100-ranked-by-profits-per-equity-partner/.

  As of 2018, 80 percent of Wachtell partners graduated from a top-five-ranked law school, while 96 percent graduated from a top-ten law school. As of 2018, 36 percent of Quinn Emanuel partners graduated from a top-five-ranked law school, while 53 percent graduated from a top-ten law school. As of 2018, 63 percent of Paul Weiss partners graduated from a top-five-ranked law school, while 79 percent graduated from a top-ten law school. As of 2018, 57 percent of Sullivan & Cromwell partners graduated from a top-five-ranked law school, while 72 percent graduated from a top-ten law school. As of 2018, 30 percent of Kirkland & Ellis partners graduated from a top-five-ranked law school, while 57 percent graduated from a top-ten law school. See “Best Law Schools,” U.S. News & World Report, accessed July 25, 2018, www.usnews.com/best-graduate-schools/top-law-schools/law-rankings?int=9c0f08; “Attorney Search,” Wachtell, Lipton, Rosen & Katz, accessed July 25, 2018, www.wlrk.com/Attorneys/List.aspx?LastName= [inactive]; “Attorneys,” Quinn Emanuel Trial Lawyers, accessed July 25, 2018, www.quinnemanuel.com/attorneys; “Professionals,” Paul Weiss, accessed July 25, 2018, www.paulweiss.com/professionals; “Lawyers,” Sullivan & Cromwell LLP, accessed July 25, 2018, www.sullcrom.com/lawyers; “Lawyers,” Kirkland & Ellis LLP, accessed July 25, 2018, www.kirkland.com/sitecontent.cfm?contentID=184.

  The most profitable law firms, moreover, do not change much year by year. The five firms just listed ranked within the top eight in every year between 2012 and 2016. Other firms that make regular appearances in the top five—for example, Cravath, Swaine & Moore and Cahill, Gordon & Reindel—have similarly composed partnerships.

  As in law, the top employers: Ho, Liquidated, 11–12.

  Often, they do not: See Chapter 6.

  The economic returns to schooling: See Chapter 6.

  the returns to investments in stocks or bonds: See Chapter 6.

  do their own chores: See Hewlett and Luce, “Extreme Jobs.”

  the lion’s share become gloomy: See Chapter 6.

  gives glossy jobs a false sheen: It is increasingly common, especially among progressives, to insist that rising inequality has little to do with training or technology and much to do, instead, with the dominance of right-wing (really, neoliberal) politics, which attacks unions and deregulates the economy, in order to shift income from working- and middle-class workers to elites. See, e.g., Jared Bernstein, “It’s Not a Skills Gap That’s Holding Wages Down: It’s the Weak Economy, Among Other Things,” American Prospect, October 7, 2014, accessed June 13, 2018, http://prospect.org/article/it’s-not-skills-gap-that’s-holding-wages-down-its-weak-economy-among-other-things [inactive].

  This is the within-labor analog to the earlier argument that rising inequality stems from a shift of income away from labor and toward capital. As before, the argument is not so much wrong as too imprecise concerning skill, too narrow concerning technology, and too shallow concerning causes. It is too imprecise concerning skill because it focuses exclusively on the returns to a generic college degree. Even if these have ceased to rise in recent years, the returns to elite college and elite graduate or professional school educations continue to grow, and these returns increasingly drive income inequality. The view is too narrow concerning technology because it fails to recognize that many of the policies that it complains of (and even associated social norms) are best understood as themselves being technological innovations, produced by a new supply of super-skilled workers. And it is too shallow because it does not seek the root causes of the disproportionate influence that the present-day elite wield over policy, which is itself a consequence of new patterns in training, work, and pay.

  All in all, then, this expression of the progressive view recapitulates the errors of the earlier suggestion that economic inequality stems from a shift of income away from labor and toward capital. It inclines to moralize inequality as a product of individual choices, private vices, rather than seeking the deeper economic and social structures that govern behavior across the economic divide.

  owe perhaps two-thirds: Tax data from 2015 suggest that an average member of the top 1 percent owed 56.4 percent of his total fiscal income to labor. See Facundo Alvaredo et al., World Inequality Database, distributed by WID.world, accessed July 3, 2018, https://wid.world/data/ (see “Average Fiscal Labour Income,” wid.world code afilin992t, and “Average Fiscal Income,” wid.world code afiinc9
92t, by tax unit for adults). This number is an underestimate of the labor component of total income, however, because much of what tax forms designate “capital income” is (as Chapter 4 will explain) actually attributable to labor.

  The top 1 percent of households now capture: According to one estimate, in 2015, the top 1 percent of the income distribution captured 22.03 percent of all income earned in the United States and the top one-tenth of 1 percent captured 10.9 percent. See Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913–1998,” Updated Series (2015), accessed July 3, 2018, Table A3, https://eml.berkeley.edu//~saez/index.html. Hereafter cited as Piketty and Saez, “Income Inequality in the United States.” Another estimate allocates a slightly more modest 20.2 percent of all income to the top 1 percent. See World Inequality Database, United States / Pre-tax national income / P99-P100 / Share, accessed October 29, 2018, https://wid.world/country/usa/.

  Compared to the period: In the years between 1950 and 1970, the top 1 percent of the income distribution captured, on average, 10.6 percent of all income earned in the United States, less than half of the current share. The top one-tenth of 1 percent earned, on average, 3.5 percent, less than a third of the current share. See Piketty and Saez, “Income Inequality in the United States,” Table A3, https://eml.berkeley.edu//~saez/index.html.

  between two-thirds and three-quarters: See Chapter 4.

  toward superordinate labor: See Chapter 4.

  Canada, Japan, and Norway: See Table 5 of Carola Grün and Stephan Klasen, “Growth, Inequality, and Well-Being: Intertemporal and Global Comparisons,” Discussion Paper no. 95, Ibero-America Institute for Economic Research, Ibero-Amerika Inst. Für Wirtschaftsforschung, Göttingen (2003), 21–23 (listing Gini coefficients for over 150 countries from 1960 to 1998).