Friday, December 05, 2008

A Disapproval of "Meritocracy"


...when you read about how the American leadership class acquitted itself at Citibank, or on Wall Street in general, I think you can see the dark side of meritocracy at work - the same dark side that shadows an instititution like Harvard, where a job in investment banking became, for a time, the summum bonum of meritocratic life. The mistakes that our elites made, and that led us to this pass, have their roots in flaws common to all elites, in all times and places - hubris, arrogance, insulation from the costs of their decisions, and so forth. But they also have their roots in flaws that I think are somewhat more particular to this elite, and this time and place. Flaws like an overweening faith in technology's capacity to master contingency, a widespread assumption that the future doesn't have much to learn from the past, and above all a peculiar combination of smartest-guys-in-the-room entitlement (don't worry, we deserve to be moving millions of dollars around on the basis of totally speculative models, because we got really high SAT scores) and ferocious, grasping competitiveness (because making ten million dollars isn't enough if somebody else from your Ivy League class is making more!). It's a combination, at its worst, that marries the kind of vaulting, religion-of-success ambitions (and attendant status anxieties) that you'd expect from a self-made man to the obnoxious entitlement you'd expect from a to-the-manor-born elite - without the sense of proportion and limits, of the possibility of tragedy and the inevitability of human fallibility, that a real self-made man would presumably gain from starting life at the bottom of the socioeconomic ladder (as opposed to the upper-middle class, where most meritocrats starts) ... and without, as well, the sense of history, duty, self-restraint, noblesse oblige and so forth that the old aristocrats were supposed to aspire to.

Let's face it: building "computer models" of loss-probability for mortgages without a sub-routine which allows for the possibility that the value of houses and land may go DOWN is........ahhhhhh........the kind of stupidity that only the "educated" can produce.

And more, from a guy who is (in effect) the USA's banker:

...Think about the way we’ve been living the past 30 years. Thirty years ago, the leverage of the investment banks was like 4-to-1, 5-to-1. Today, it’s 30-to-1. This is not just a change of numbers. This is a change of fundamental thinking...

...If you look at every one of these [derivative] products, they make sense. But in aggregate, they are bullshit. They are crap. They serve to cheat people.

I was predicting this many years ago[,] [i]n 1999 or 2000...

And, for our lawyer-friends:

Today those people fresh out of law school would get $130,000, or $150,000. It doesn’t sound right.

This from a guy who is a Duke Law grad...

1 comment:

alyysa said...

I got a grant from the federal government for $12,000 in financial aid, see how you can get one also at