On Meritocracy and Occupy

I tweeted this earlier today:

Chris Hayes (a fellow Park Sloper – Go Strollers!) RTed my note and replied with “fascinating.” I’ve wanted to write on this topic for a while. I think now is the time…

I have mixed feelings about Occupy, especially its anti-corporate message. I work for a large professional services firm and serve lots of corporate clients. From the “inside,” I know that most people with corporate jobs are like everyone else. They (We) are worried about families and friends. They worry about their jobs and worry about paying bills. They think a lot about fulfilling dreams and preparing for the future while simultaneously dealing with the mundane that can be day-to-day life. They also represent a huge share of our work force.

I also do not believe in any grand conspiracy about “overlords” trying to control our life. Maybe that comes from having spent a childhood waiting tables in Kennebunkport and an adulthood in New York periodically attending lectures at places like the Council on Foreign Relations. The rich and powerful people I’ve met strike me as more humane than Occupy makes them out to be.

That said I do recognize that both large corporations and political institutions can aggregate and magnify the small choices – good and bad, ethical and unethical – people within them make every day. Being a “good corporate citizen” requires not just strong, ethical leadership from the top, but also thousands of smaller similarly aligned ethical decisions to be made by each individual day in day out. When incentives are misaligned, goals unclear, benefits to the community and shareholders out-of-synch, institutions can end up on “bad” vectors. It can be compelling to write a conspiratorial narrative about these vectors since strategy and intent are easy viewing in the rear-view mirror. These vectors of our large institutions have great impact on people’s daily lives and it’s these institutions that have caused the American people – the Occupiers in particular though not exclusively – great angst.

One common grievance I’ve heard from Occupy is the charge of “crony capitalism.” The essential idea as I understand it is that institutions make deals with each other not based on merit, transparency, and fair competition. Instead business gets done in the figurative “smoky back room.” Relationships created at private schools, Ivy League and elite liberal arts colleges, and in early career internships solidify class distinctions and calcify organizations’ abilities to buy and sell based on objective measures. “Crony capitalism” additionally implies that deals are made almost exclusively for the benefit of the people directly at the table, often at expense of the country at large, the environment, the local community, and even taxpayers or shareholders whose interest the dealmakers purport to represent.

A common portrait of the people protesting “crony capitalism” – i.e., the Occupiers, is that that a lot of them are recent college graduates who can’t find jobs, many burdened with large tuition debt. From a couple visits I made to Zuccotti in the fall – as well as my own observation watching the march go by my office yesterday, I’m guessing that is fairly accurate. The message of many – and I paraphrase – is “I did the right thing. I played by the rules. I went to school and studied hard. Now I can’t get a job.”

I’m Gen X and when I came out of school in the early 90s getting a job was a challenge. I remember a friend of mine from Colby, who graduated Magna Cum Laude, being ecstatic about getting a job waiting tables. But the Millennials (“Gen Y”) have had it harder than we did. I think there are two reasons. The first reason many have suffered is the same reason why we have such a large structural unemployment problem in this country – a mismatch of skills and positions. Cynical observers of Occupy exploit this with the “Well, why did you major in Art History, then?” criticism. That stings, especially since our economy arguably will need more flexibility than specificity in its work force in the next few decades, but there is some truth in there as well.

The second reason I think recent graduates have trouble finding a job brings me back to those key enablers of crony capitalism I alluded to earlier: pedigree, schooling, network. Some call this “white privilege” though I think it’s more about class than race (which of course are not always mutually exclusive). And it’s this classism that is a problem. It’s class that is a major obstacle to meritocracy.  Just like with race and gender, when class blocks the best opportunities from going to the best qualified, capitalism fails.

My biggest surprise in the 12 years I have lived in New York City is how totally wrong the guidance that “where you went to undergraduate school doesn’t matter” is. It can matter tremendously, especially in finance. Not only is undergraduate school a filter by which companies select who to interview, it also is a graduate’s entry point to the networks required to get a shot at an interview in the first place. While I think “who you know” has probably always mattered as much as “what you know,” especially early in your career, I think this trend has greatly accelerated in the last 10-15 years. Frankly, I suspect it’s a motivating factor for some of the SAT cheating scandals that have occurred recently in greater New York City – clever kids, watching parents work the corporate world, recognize that the right undergraduate school is a critical asset for them to have in 6-7 years when they look for their first jobs, since it is the a penultimate marker of class. The kids make bad decisions and take short-cuts now to achieve the goal of a good job in the future.

Let me digress for a moment.  A bit older friend of mine has attended a number of Occupy events. Sometimes he just listens and watches, other times he offers his musical skills to the crowd. My friend told me a couple weeks ago that “After being to all these Occupy events, I know now what I am. I am a rapid capitalist.” Myself, I am very passionate about start-ups, venture capital, and the no-longer nascent digital media and technology scene in New York City, especially in my adopted home borough of Brooklyn. To me the idea of a 20-something amassing a bit of money from friends and getting a small business together in her garage, then getting a bit more from an “Angel,” and in turn – hopefully – getting their “Series A” round from a venture capitalist is capitalism at its best. I think it is America at its best. That is how things should work: Hard work coupled with great ideas competes for capital with which to grow. “Rabid capitalist” is a moniker I’d like to take on myself. And as a “rabid capitalist” I must repudiate obstacles to the free flow of capital whether that capital is financial or human. If the best human capital can’t get connected to the best (or any) jobs because of class and its associate markers, that’s a big problem.

Back to the sign in the OWS march yesterday. It read “We want to live up to our potential” and was held by a woman who was, I’d estimate, in her mid-20s. I don’t know her and can’t tell you why she made that sign. But thinking about conversations I’ve had with Occupiers in their 20s, as well as colleagues and friends also in that generation, I can tell you that there is a lot of disgust at what many of them see as a rigged system where the fundamental basis of competition is off-kilter. To them, and to me as well, it is incredibly frustrating that despite the tremendous progress we have made in the last 50 years in areas of gender, racial, and sexual orientation rights, we can’t seem to make the same sort of progress on class, and its typical markers like alma mater. We wring our hands at the decline in social mobility in our country but look away at the culprit: class. Some in Occupy are now turning their heads to the source of our malaise. We all may know that “life is unfair” but when you’ve “played by the rules” all your life and then find yourself unemployed at 24 – and can create a compelling narrative that a key reason why is because you went to the “wrong” school – that phrase, that “life is unfair”, provides precious little solace. How do young people respond? Some move back in with parents. Some go create start-ups. Some re-train. Some occupy and march.

And this takes us back to meritocracy and what I think people are seeing as its main impediment – class. While not the only message for sure, I do hear a primal scream for “real meritocracy” – by which I mean “meritocracy unconstrained by class” (or race, gender, etc.) Others may hear this primal scream as a call to be judged (only) by, to quote Martin Luther King, Jr., the “content of their character” but the taproot is the same. It’s a taproot that is fundamental to capitalism. It is a taproot that is fundamental to America. It is a taproot upon which both Occupy and the Tea Party can agree. It’s the taproot that says: “Put me in coach. Give me a chance, a shot. If I never have a chance to fail, how will I ever know to what degree I might succeed?”  It’s what I saw in that sign yesterday, and what I see in Occupy. It’s the want of opportunity to live up to one’s potential. It’s the yearning for the unfettered freedom of youth.