Meritocracy is illiberal

“Extraordinary statements require extraordinary proof”

I admit that saying meritocracy is illiberal is something that’s probably regarded as a pretty extraordinary claim so let me spend some time explaining why I believe something quite so extraordinary.

Let’s start with everyone’s favorite thorny topic- neo-liberalism. Nobody seems to agree on what it means so, for clarity, I mean the monetarist consensus that formed in the 1980s that followed on from the post-war Keynesian economic consensus. In the UK it might equally be referred to as Thatcherism. Specifically what I want to address is an odd feature that rarely gets mentioned- it wasn’t the Liberal party that started this trend, it was the Conservatives. The same was true in the US as well. So what happened? Did Conservatives suddenly become Liberals?

Unsurprisingly my answer would be no. So what did happen?

Well what Conservatives switched to was not Liberalism per se but more “free markets” (by which they meant deregulated markets, regardless of how “free” that actually made them!). Free markets did something rather wonderful for Conservatives- they justified those at the top being at the top via “merit”. Back in the olden days to justify some chap having enormous wealth and power you had to resort to divine right of kings- they DESERVED all that power and wealth because God himself said so! That isn’t quite so tenable in the modern era but saying that the wealthy MUST deserve all their wealth because “the free market is a meritocracy” sounds pretty good.

But what if they’re right? After all doesn’t the free market reward people based on merit? And isn’t that what Liberalism is all about?

They’re not.
No.
And no, it isn’t.

The free market was not initially described as a nifty tool for finding out who deserved to be wealthy, it was described as a system that efficiently used resources to make everyone better off. Even when it was first talked about though it was understood that it wasn’t a panacea, even in Wealth of Nations Smith talks about how, in the very long run, Landowners would capture more and more of the wealth and workers would be dirt poor. (And, to be incredibly clear here- he saw that as bad!) That’s why we sing about Land Value Tax at every Lib Dem conference. It’s not clear Smith saw free markets as a moral statement in any way. In fact he had a whole other book, which he considered his magnum opus, which was on morality. Equally John Stuart Mill in ‘On Liberty’ makes a point of specifically saying that Liberalism isn’t just free markets, instead free markets are a tool Liberals use because it’s useful for their end goal. That goal being each individual having as much say and control over their life as possible. Not, and this is important, each individual being granted an appropriate amount of control over their life that they had “earned” through merit.

Now I’m not going to pretend merit wasn’t something that lots of Liberals cared about. Clearly plenty of Liberals in every time period have believed that part of Liberalism was allowing people to earn what they “deserved”. I just think that 1. That isn’t everyone, 2. It’s not at all clear that free markets actually do that, and 3. not everyone agrees on what merit actually means.

So let’s talk about free markets and merit. I’m going to take as a given that anyone reading this can think of plenty of examples that people would cite where markets fail to accurately assess merit (monopolies, etc.), whether you, dear reader, agree with those examples is a separate topic, I’m just assuming you can think of examples and the arguments for them. So I’m going to skip over that for a second. Instead i want to talk about what merit actually means.

Let’s start with an obvious one, does someone deserve to be richer because they have the genetics to be pretty? Or tall? What about strong or clever? Accidents of genetics seems an odd definition of merit from a Liberal point of view, unless we’re going down the slightly disturbing path of eugenics which doesn’t seem particularly Liberal.

Ok so what about effort? How willing people are to try. (Let’s ignore for a moment that this is also affected by genetics.)

The problem here is that if we’re going by effort alone it seems hard to argue that a CEO should be paid 300 times more than a nurse and yet in the free market, often, they are. The justification? Ah well we’re told the CEO is contributing more to the economy… but that isn’t putting in more effort or working harder, that’s about rewarding people for how much we value what they’re doing in terms of overall utility.

This is the core point- the free market doesn’t measure some version of moral worth or merit, it attempts to measure how useful something is at any particular time. That’s all.

Ok so why can’t a free market based on utility be Liberal? Sure, people aren’t paid on merit per se so it’s not really a meritocracy but isn’t it producing the best life for everyone?

So the first point is that it doesn’t seem very Liberal that some people get paid more than others entirely outside of merit. Secondly which rules you have for the market matter. For example- if someone is pointing a gun at your head and demands all the money in your savings account there may be a large utility, in that moment, to pay them the money so that you don’t die. Most of us would agree that this isn’t a very good or fair situation though so you need some rules to govern transactions to ensure that maximum utility. Well now we’ve established that it’s ok to have some rules what should the rules be?

Right leaning Libertarians will tell you that just enforcing property rights, in the way they describe them, is enough to ensure perfect utility… but why? There doesn’t seem a huge amount of real world evidence for this, just vague assertions. Assertions mostly based on the idea that everyone “deserves” to keep what they earn but, as we’ve seen, deserves and merit are tricky subjects. For example in a perfect Libertarian state a landowner can set any rules, regulations and fees on their land that they like. It’s their property after all. But this is pretty obviously ripe for abuse and in no way ensures fair treatment for all and so we need some authority to enforce fair rules by interfering with the landowner’s ‘property rights’.

That brings us nicely back to the “neo-liberal” view. A small state with very free markets enforcing some standard of fairness in those markets. What we’ve discovered though is that this isn’t a meritocracy. Nor is it clear that it provides the maximum possible benefit for everyone. So while it might be a useful device for Conservatives to justify the status quo it isn’t, in my view, very Liberal.

So what would be?

Well if some Liberals want to cling onto the idea of meritocracy somehow being a viable goal and compatible with Liberalism then go right ahead. However I think it’s reasonable to say that, at the very least, you need a strong welfare state or Universal Basic Income as well as a strong education service and health care system to ensure people have a fair chance. I’d hope we could at least agree on that.

But for a more realistic vision of Liberalism, in my view, we need to stop trying to work out who deserves what and who has merit and who doesn’t. Instead we should try to ensure every individual person has as much in life and as much control over their life as we can possibly provide them tempered only by where limiting that freedom or giving some person more resources than someone else leads to gains for everyone, even those at the bottom. Liberty shouldn’t be something you “earn”. Everyone deserves the greatest amount of Liberty we can manage to give them.

Will that sometimes involve free markets and capitalism? Absolutely! That’s why they’ve been popular tools for Liberals for two centuries, but it will also involve regulation and redistribution, along with mutualisation and common ownership where appropriate. That’s how we build a society free from poverty, ignorance and conformity. That is how we achieve Liberty for all.

My attempt to understand policy and economics. Some ideas practical, some not. Currently Chair @CovLibDems and Council member for the Social Liberal forum.