Meritocracy and Economic Inequality (review)

Meritocracy and Economic Inequality. Edited by Kenneth Arrow, Samuel Bowles, and Steven Durlauf (Princeton, Princeton University Press, 2000) 348 pp. $59.95 cloth $19.95 paper

A meritocracy is an economy and society that rewards effort and ability, not family background. Sounds good. But individual ability is often inherited; educational attainment is influenced by family background; and effort and ability are often correlated. Complicating matters further, why is it "just" to reward ability? The twelve papers in Meritocracy and Economic Inequality address various aspects of the ambiguous term, coined in 1958 by Young.¹

Americans equate a meritocracy with equality of opportunity and an open, forgiving, and publicly funded school system for all. To Americans, education has been the great equalizer, and generator, of a "just" meritocracy. The European version, on the other hand, in which children of age ten or eleven were, and in places still are, tested for entrance to an elite cadre, substituted a cognitive elite for a titled and privileged gentry. This is a different vision of a meritocracy.

Six years ago, Charles Murray and Richard Herrnstein shocked the academic community with their claims that a new meritocratic order had taken hold in America (The Bell Curve: Intelligence and Class Structure in American Life [New York, 1994]). According to Murray and Herrnstein, education in the "new" economy, with its use of such technological devices as computers, can no longer overcome many differences in ability. Rather than a society in which individual effort matters and education is ameliorative, the new meritocratic order in America will tend to generate persistent class differences, reserving its greatest rewards for a group of intrinsically able individuals--the "cognitive elite." Although the essays in Meritocracy and Economic Inequality were not assembled to assess the Herrnstein and Murray thesis, the majority cite the book and assess its content.

Roland Bénabou directly confronts the ambiguity in the term and constructs economic models of meritocratic orders. He distinguishes between a meritocracy that imposes equality of opportunity (rewarding ability and effort rather than family background) and one that enforces equality of outcomes and shows the impacts that each policy would have on growth and distribution. His essay complements that by John Roemer, whose work on distributive justice sets forth a framework of a meritocratic order that rewards effort rather than either ability or family background, as well as that by Amartya Sen, who assesses the meaning of rewarding merit and whether it is "just."

The remaining papers are empirical, and most can be organized into two groups. One assesses the degree to which effort, ability, and family background influence outcomes, such as earnings or social status. Another evaluates what happens when equality of outcomes is imposed. Thus, one group tries to understand the inner workings of a meritocracy; the other wrests with policy prescriptions to equalize results.

Among my favorites is James Flynn's brief overview of his pioneering work showing that measured intelligence increased across the twentieth century in various countries (Britain, the Netherlands, and the United States, for example) and, thus, that iq scores are not immutable. Abstract reasoning and various analytical skills have been of increasing importance for the past 100 years, and these skills are the basis of modern iq tests. Flynn also argues, contrary to Herrnstein and Murray, that iq and class have not become more highly correlated over time.

Several papers tackle why formal schooling is associated with increased income and whether correlations between schooling and income are due largely to "ability bias." Orley Ashenfelter and Cecilia Rouse review a large literature, and add to it, showing that standard econometric estimates of the returns to education are not generally biased by the possibility that the more able continue further with their education. Samuel Bowles and Herbert Gintis try to understand how schooling can make people smarter and more productive.

Robert Hauser et al. explore intergenerational mobility across much of the twentieth century, and Marcus Feldman et al. present evidence on...