The reverse invisible hand

As we all know, capitalist accumulation is guided by the “invisible hand,” which ensures that the selfish and short-sighted choices of individual capitalists fit together into a beneficial whole that promotes long-term wealth-creation for all. What’s less well known is that for workers, the situation is reversed: their self-interested decisions add up to create a situation that is more and more disadvantageous for workers as a whole. Examples abound. On the individual level, taking an unpaid internship can give one a leg up on the competition — on the whole, it creates a situation where more and more work is being done on an unpaid basis, so that there are fewer slots available for paid workers. On the individual level, increased social mobility through education can help one to escape from a poverty and deprivation — on the whole, it waters down the competitive advantage of education while creating ever-greater competition for the handful of positions near the top of the heap. On the individual level, prudential advice about self-presentation and interviewing technique can increase one’s odds of getting a job — on the whole, such advice only increases the legibility of the applicant pool, while doing nothing about the underlying ratio of applicants to jobs. Etc., etc., etc.

Globally, workers are caught up in a perpetual arms race. They must work harder and harder, they must come pre-trained, they must be flexible and ready to nimbly switch careers as market forces dictate — and never ask why, never ask who’s actually benefiting from this regime of work that is making everyone anxious and miserable. Similarly, these habits of thought allow us to build social policy on an individualistic basis, as though the real crime in social inequality is that the most talented members of the underclass might go to waste. No one asks, meanwhile, why less prestigious jobs, which are presumably just as socially necessary, should “naturally” carry with them a lower quality of life, nor why the social ladder upon which we must all be allowed the “equal opportunity” to climb should be structured in just the way it is.

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27 Responses to “The reverse invisible hand”

  1. Jason Hills Says:

    Brilliant insight.

    The distinction of the invisible hand for capitalists and the reverse invisible hand for workers is just brilliant. It’s also subtly Marxist for a dash of flavor.

  2. Uday Says:

    Perhaps better termed the “invisible choke-hold”

  3. mydesiringmachines Says:

    Reblogged this on My Desiring-Machines and commented:
    Kotsko’s post reminds me of why schizoanalysis is a solid approach for studying urban redevelopment in South Lake Union. As Eugene Holland writes in the intro to Nomad Citizenship, schizoanalysis gives us a way to explain the relationships between economic dynamics, political dynamics, and psychodynamics. The misery that comes from constantly updating your LinkedIn page, the anxious abandon with which Amazon.com workers devour food from the Whole Foods buffet, are connected to economic and political realities, including the inter-urban competition that produces spaces like SLU.

  4. Jake Says:

    This seems like the price paid for a meritocratic or elitist social structure that is not as rigorous or competitive as intended. A clear instance of socialism for the rich, capitalism for the poor. The best deserve the best and the rest can go to hell.

  5. Adam Kotsko Says:

    I don’t see how a more effective meritocratic system would be preferable. I’d prefer justice and equality over elitism.

  6. Jason Hills Says:

    Adam,

    Meritocracy is distributive justice, where the difference between meritocracy and elitism (in its negative connotation) is the proportion. Jake wrote it well with “socialism for the rich, capitalism for the poor,” since the system works very differently for those who are at least semi-independent from their employer: justice seems to undergo a shift.

    So, please explain you comment.

  7. Mark William Westmoreland Says:

    Meritocracy might be a kind of distributive justice (I don’t think so), but it is only a kind. I don’t think meritocracy is distributive justice at all. But, let’s grant that it is: it would still be only one kind of distributive justice among other kinds.

  8. ambzone Says:

    Meritocracy describes a rhetorical strategy, not an actual system.

    This at 00:05:12 :

  9. Marshall Says:

    Last year William Press and Freeman Dyson published an analysis* that mathematically proved your point: that pursuit of short-term optimization means that there are counter-strategies that lead to acceptance of an arbitrarily small share of the proceeds. The long player who can sacrifice short-term gains has a very strong hand. Look at the way rich people have used the recent financial situation to their advantage … for example, buying up real estate on very favorable terms. “The Union makes us strong.”

    * http://www.pnas.org/content/early/2012/05/16/1206569109.abstract

  10. Jake Says:

    Adam — I wouldn’t prefer a more effective meritocratic system either. I find such systems inherently flawed and easily corruptible.

  11. Adam Kotsko Says:

    Meritocracy is basically lipstick on the pig of simple elitism — the same structure of inequality and artificial scarcity, legitimated by a series of fundamentally arbitrary testing rituals rather than by good breeding or something. The number of tautologies governing the system is astounding. For instance, merit for what? We never even discuss that. Who gets to judge merit and why? It’s not like there’s some class of elite philosopher kings out there. Who gets to assess whether the judges are doing a good job? That notion is radically absent in almost every meritocratic regime I’ve ever heard of.

    It’s just sheer ideology, pure and simple, and I don’t even want to grant it the dignity of “good idea, bad implementation.” If it’s such a good idea, the implementation wouldn’t be so uniformly bad. Where are the islands of utopian meritocracy that we can hold up as a standard? They just don’t exist.

  12. Jason Hills Says:

    I advocate a simple principle, and so far I hear complaints about implementation. Do you really prefer sanctioned inequality? Would even enforced “equality” solve these problems? No.

    I think your stab, Adam, at addressing the obvious critique is nothing more than hand-waving. I’m more than willing to accept that the principle doesn’t survive implementation well, but that says more about implementation and current conditions than principle. You’re think the mere word “meritocracy” was a right-wing invocation and that’s why it’s getting this reaction. Oh wait, that is exactly why I think it’s getting this reaction. Well, I don’t like David Brooks recent use of it either–if that’s what’s triggering this–since it doesn’t distinguish between meritocracy and privilege. I’d never advocate that with merit comes privilege, which is the only other offhand reading I can think of answering why such a simple think gets that reaction. Or perhaps I might be informed. Until then, I think this audience is reading a very bloated definition of the term “meritocracy.”

  13. Adam Kotsko Says:

    So the alternative to meritocracy is some form of traditional aristocracy? A key feature of everything that’s ever gone under the name of meritocracy is that the most talented deserve to get outsize rewards (and unspoken is that the dregs can go fuck themselves). CEOs have to get paid so much, for instance, to attract “talent.” Meritocracy just means that rewards are distributed according to ability. If your principle is “people should have the jobs they’re best at,” you need to use a less loaded term for it — our definition isn’t bloated, yours is unrealistic.

  14. A Says:

    My thought was that a meritocratic system can work by lowering barriers to entry to the top and increasing supply, which impedes the rent-seeking capacity of the ones most likely to bend the rules. Outsourcing is the opposite of this since the wealth creation is robbed of accountability. Breaking the guilds— in law, medicine etc.— might be a place to start at.

  15. Jason Hills Says:

    I just ask that we note the distinction between the ideal and particular historic implementations of it. Most of the arguments against are still arguing against implementation, not the principle, without giving specifics about the necessity of the negative consequences of that implementation. It’s still hand-waving, in fact, and the imputation of view such as “the most talented deserved to get outsize rewards,” which I would never propose despite arguing for meritocracy. Actually, I’d like to see an argument against the principle. Heinlein had some good ones that I find compelling.

    Shall I define “meritocracy” as political and perhaps economic leadership by those who demonstrate the correlative ability to do so, or is the point moot and conversation mostly dead? The issue of rewards for leadership is separable.

  16. kim fabricius Says:

    Sharp, Adam, thanks. I was thinking the “invisible middle finger”.

  17. Jake Says:

    Jason — the idea of a meritocracy is flawed even if we separate rewards from leadership. It backfires because it puts too much power and authority in the hands of the elites without allowing space for accountability and collaboration. The power structure meritocracies create is a static, top-down hierarchy. A benign oligarchy, not a democracy.

    If meritocracies led to solid leadership, then all the geniuses who comprise our political and economic elites should be able to resolve all the political and economic issues we face. But they can’t because they have a strong interest in sustaining their power and authority over others and ensuring the “system works,” especially since they benefited from it the most. That’s a huge generalization, but I don’t think I’m far off the mark.

  18. Adam Kotsko Says:

    My problem with meritocracy is similar to Jake’s: who assesses the assessors? Short of having a Platonic philosopher-king who has communed with truth and has no desire for worldly power, I just don’t see how creating an unaccountable elite legitimated by their own expertise could end other than as we’ve seen it end in practice — even if without the “outsize rewards,” we’d get the kind of echo-chamber effect that we see among our economic elites (why listen to outside voices when we’re the certified experts?). Democracy is often tedious and unreliable, but it provides for some kind of accountability (even if it only extends to kicking the bastards out). In the absence of a truly objective philosopher-king to make all the determinations — indeed, perhaps in the absence of a clearly ascertainable objective truth about merit in the first place — democracy seems like the better way to go.

  19. Jason Hills Says:

    Jake, thank you for a direct response.

    Why assume that with meritocracy comes elitism? I wouldn’t put the two together. Likewise, one can understand federalism and municipalism as a way to squash vast hierarchies and provide more local and less power-disproportionate control. Moreover, per Adam’s response, I don’t see why he implies a contrast between democracy and meritocracy. I would put them both together, and I think that was an original intent of the founding–not that originality matters now.

    What I’m trying to do is to get the various interlocutors to tease-out their assumptions, because certain combinations have already been presumed, and a true conversation foreclosed [GrammarGirl edit: by zombies-->uh oh, fails the zombie test!].

  20. Jake Says:

    “Why assume that with meritocracy comes elitism?”

    Because that’s the desired result of a meritocracy–that it produces powerful and wise elites who will lead the way, who will make organizations more efficient and who have the ability to resolve issues few of us supposedly cannot. Everyone follows a chain of command based on elitism. That chain is made real not just through its structure but through the very thinking that those at the top are the best and brightest and deserve to be there, while those at the bottom are too weak or deficient to play a strong role or have a strong voice in how they are governed.

    It’s not very democratic or open to healthy reform… and I think Adam sufficiently pointed out why that’s a problem, along with other issues.

    For a more extensive critique of hierarchical power structures like meritocracies (and even market-based power structures), I would point to Cosma Shalizi’s and Henry Farrell’s essay on “Cognitive Democracy,” — http://bit.ly/JIofgs

  21. ambzone Says:

    How to distinguish between a “truly” meritocratic society and one merely propagandizing itself as such?

    Trick question.

  22. Jason Hills Says:

    Jake,

    Since the beginning of the conversation I didn’t have a traditional hierarchy in mind and am trying to pry apart meritocracy and traditional notions of elitism, else the conversation is pointless rehearsal of prior prejudices. Now, I’ll admit that meritocracy would rattle the liberal/neoliberal sensibilities that most Americans have, since it would reject strict “equalitarianism” that Americans take as a default position. Yet denying equality, which is a fiction, does not lead to elitism (which tends to be a binary and exclusive concept), and you gesture towards that with the notion of a “chain.” There are more structures possible with meritocracy than a pyramidal hierarchy, and I think some viable ones can be developed as meritocratic democracies. In fact, I would say that the our society is supposed to be such, though does not achieve its prevalent ideals.

    I still insist that we should have meritocratic democracy that reduces the effect of privilege. The “meritocratic” targets more the economic situation, whereas the “democracy” targets politics. I would just hope that we would agree that “if you work hard and do well, and you should make it it life,” isn’t too much to ask. I never advocated “technocracy” or the other various forms of meritocracy, and my exclusion of such discussion is intentional, yet those are the perspectives that others are saddling me with.

    I thank you for the reference.

    Anyone read Starship Troopers? What about military or civil service as a requirement to be a full citizen? What about anarchic communism, where the leadership roles of the community are randomized and change? I was hoping someone might bring up the more creative proposals.

  23. Adam Kotsko Says:

    Jason, Why do you insist on using a hugely loaded term? I just do not understand. Maybe if we’re constantly being misled into things you don’t mean, it’s because the term you’re using is misleading. If you’re just talking about merit having some discernable connection to job placement, who would disagree? But if you’re separating out the political element, why are you insisting on using a word ending in -cracy?!?!?! And you have said previously that political leaders should also be chosen based on “ability” (whatever that’s supposed to mean). It’s incredibly difficult to engage in this discussion with you given your constantly shifting definitions and your dismissiveness of almost everything we’re saying.

    You’re frustrated? Duly noted — but we’re frustrated too. It takes two sides to create an unproductive conversation.

  24. Jason Hills Says:

    Adam,

    You have a point, of course, but I did not realize that the term was “loaded” for this audience until I received these reactions. I am not shifting definitions: I am entering a conversation with a poorly defined term and realizing belatedly that our operative definitions vary widely and tried–too late–to get more specific.

    My frustration is that the conversation with you has bordered on hostile–yes you often come across that way and you know it–and does not befit the new move to be more inclusive as discussed in the recent changing of the comment policy. I would say that conversation requires making assumptions about our interlocutor in order to make sense of the conversation, but I do not think it was handled well in this case. I recommend that you propose the inference that you make from my premises rather than assert that I must fall to your conclusions, e.g., that I’m pushing “elitism,” and ask me how I avoid or accept that inference.

    In conclusion, it seems that ambzone grasps the essence of the disagreement: can one distinguish between a meritocratic society and just propaganda. I believe “yes” and that it is valuable, but am not sure it’s within the plausible scope of our current institutions, whereas others appear to claim “no.”

  25. Adam Kotsko Says:

    What you read as hostility was initial hostility to the idea of meritocracy, and then frustration due to the factors I discuss above. I believe it was justified in both cases and in no way conflicts with the comment policy. The fact that you kept returning to the conversation, and that others were joining in, leads me to believe it was not a violation of community openness.

    If you want to have this “procedural” conversation, I’m going to need you to take responsibility for your own contribution to the deadlock. Your position was opaque and seemed to be constantly shifting. We asked direct questions and made direct arguments that you seemingly dismissed. Your only effort toward being better understood was often simply to complain that we were misunderstanding (i.e., we need to work harder, not you).

  26. Jason Hills Says:

    Fair enough. I will grant that I was being buffeted by the assertions and failed to be clear.

  27. Joseph Says:

    Adam,

    It sounds like you’re treating the invisible hand as a proactive agent in society. Smith was using this metaphor to describe a socioeconomic phenomenon entailing the synchronization of many factors. The point your making seems to be more sociological than economic. Jason Hill touched on this when he said it had a “Marxist touch”. That watering down of the competitive advantage of education–and the “perpetual arms race”–is a natural result of self-interested actors pursuing their own self-interest, which naturally leads to competition. It’s a great example of Smith’s invisible hand.

    Long-term wealth creation for all is not what Smith thought would be the final outcome of our capitalist system. Overall, this phenomenon would spur economic growth–as it has–but Smith believed that at some point we would need to lean toward a moral socially conscious society, which sounds like what you are advocating.

    JK


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