Merit is a sham,” Daniel Markovits writes in the first sentence of his new book, The Meritocracy Trap. But, for Markovits, our system of elite education and glossy jobs is not fraudulent in the way many of us think. The main problem isn’t that Wall Street, Silicon Valley, or the Ivy League are greedy, blinkered, or inept. We don’t need to cleanse our meritocracy of undeserving people or upgrade our meritocrats; we need to dismantle the whole system. Even when it works, Markovits argues, meritocracy is a primary driver of inequality in America.

Markovits, of course, is a meritocrat himself—doing stints at Yale College, London School of Economics, Harvard, and Yale Law, where he teaches today. Nonetheless, he says, these structures are making everyone miserable. The middle and working classes are blocked from opportunity, and the elites are locked into a life of grinding intensity and ruthless self-exploitation. But in this misery, there’s a way out. He suggests that if workers of all types could see how meritocratic structures are causing such disaffection, then maybe we could work together to unwind the system. Meritocracy, Markovits writes, has become “a caste order that breeds rancor and division.” But emancipation from it “would heal a society that meritocracy has made oppressive and mistrustful.”

Markovits sat down in The Nation newsroom to discuss his new book. Our conversation has been edited for length and clarity.

—Christopher Shay

Christopher Shay: What is the “meritocratic trap” that you’re describing in the book?

Daniel Markovits: The idea is that the rise of a super-skilled, super-trained elite causes two things to happen: First, the elite invests enormously in training its children. This means that people who aren’t born to rich parents don’t have the same educational opportunities. That’s why you see things like the Ivy Plus colleges with more students from the top 1 percent than the entire bottom half. That’s one part of it: the concentration of education and training in a narrower and narrower elite of children.

And then there’s a labor market part, which is the remaking of the labor market in a way that distinctively favors the skills that elaborate training gets you. The labor market that, at mid-century, was dominated by a large mass of mid-skilled, middle-class jobs is today dominated by a small number of glossy jobs by super-elite workers who can then expropriate the returns to labor and immiserate a large mass of others. It’s a trap, because it excludes everybody outside of the elite from opportunity. And for the elite, it’s a trap because there’s an alienating character to being trained and then worked in a ruthless competition your whole life.

CS: You point out that the term meritocracy itself is relatively new; it’s from the late ’50s. Could you describe how it was first used?

DM: The term was invented by an English sociologist named Michael Young, who wrote a book called The Rise of the Meritocracy. It is a profound and bizarre book. It’s an imaginary social history of the second half of the 20th century, written from the perspective of a made-up social historian in the 21st. And he coined the term “meritocracy” because government by the most virtuous was already taken, that’s aristocracy. So he replaced the Greek root for “virtue” with the Latin root for “earn.” For him it was a term of critique, not a term of approval. He lamented, deep into his life, that it had been embraced as a term of praise.

CS: The idea of meritocracy has taken a hit, especially since 2008, when the elites didn’t just not see the recession coming, they caused it. Is meritocracy losing its charisma?

DM: I think there is a generalized discontent with meritocracy, both in the elite and outside of the elite. But I think we have to be careful about how to characterize this. The view that is most common is that the whole thing is a charade: The elites don’t actually have particular skills; they’re incompetent, venal, or corrupt, and that’s the reason that we have the problems that we have. Although this is framed as a critique of meritocracy, what it actually is saying is that we have too little meritocracy. In other words, if it were the case that the elites actually were good at things, that would be OK.

My story is very different. I don’t deny that the elites are sometimes corrupt and incompetent and venal, nor do I deny that some portion of their immense incomes comes from that kind of corruption. But I think most of the rise in their incomes comes from the fact that we actually do have a meritocracy. Elites are, within the existing framework, actually doing what they purport to be doing: They’re working hard; they’re providing value for their companies—though not for society. The problem is that we’ve concentrated skill, training, and production in too small a set of people, and that’s a different diagnosis.

CS: Your book argues the major rift in the US as being between elite workers and other workers, rather than splitting it along wealth inequality. Why do you think that’s a more useful way of explaining inequality in America?

DM: In my view, it’s a distinction between elite workers and other workers, or superordinate workers and subordinate workers, rather than being a distinction between owners and workers, or between capital and labor. And the reason why I think the cut that I make is the right one is that the data support that the main cause of the explosion of top incomes is elite labor. If you take the most aggressive estimate of the shift of income toward capital and away from labor, which is the estimate of the Bureau of Labor Statistics, it suggests that there’s been, roughly speaking, a 6 to 8 percent increase in capital share of national income. The top 1 percent get maybe a third of that, so that’s a 2 to 2.5 percent increase. But the actual increase in the top 1 percent’s share of national income is 10 to 12 percent. So three-quarters of that comes from elsewhere, and it comes from within labor. That’s the mechanism that I’m talking about, the way in which superordinate workers are extracting wages from everybody else.

CS: You write, a bit sarcastically, that “Curing meritocratic inequality seems requiring ravaging Palo Alto”—but doesn’t it? Breaking up tech monopolies and redistributing tech wealth to build a strong welfare state seems like a pretty good strategy to dealing with wealth inequality. But you write that some of these ideas compound the political problem. What did you mean by that?

DM: There are two parts of what I mean by that. One part is the idea that elite labor income, because it can be characterized as earned, is extremely resistant to political-based redistribution. If you believe that, just as a matter of domestic realpolitik, what that means is that in order to unwind inequality, two things have to happen: First, we have to persuade people, including the rich, that they haven’t earned the income, in the relevant sense. One way to do that is the kind of argument I’m making, which shows that their top incomes are artifacts of a prior inequality.

The other thing one has to do is restructure training and work so that the market develops and delivers a more equal distribution of income. So rather than having the state come in to correct the market, have the state come in to help structure and influence the market to make the market itself more egalitarian. That’s my diagnosis of what’s politically feasible. One more thing: The meritocracy as we have it now doesn’t actually serve the human interests of the elite. And so when I say it doesn’t require ravaging Palo Alto, what I mean is, if we restructure things, Palo Alto would be poorer. But it’s so wealthy now that it could be a lot poorer and not suffer in any way. In fact, it would also be freer, less alienated. That’s also important, if one could persuade the elite, “Hey, this is good for you,” that can matter politically.

CS: You point out in your book that the wealthiest 20 percent are hostile to progressive taxation. In many ways, elites seem aligned with capital rather than with other workers. Why do you think these two different type of workers coming together is a more realistic political project?

DM: I don’t think the wealthiest 20 percent are aligned with capital; they’re aligned with themselves. In a world in which the main source of elite income is labor income, it is true that elite workers are hostile to non-elite workers, but that doesn’t mean they’re necessarily on capital’s side. There are three interests here: capital, elite labor, and non-elite labor. Getting that clear matters for policy a lot, because it means policy has to focus on elite labor as well as on capital.

That doesn’t yet answer the real question: Why do I think that elite labor is going to make common cause with non-elite labor? I don’t want to be in pie-in-the-sky about this, but two things are true about the system we have: One is that the share of the broad elite that is actually going get to be in elite labor is shrinking and shrinking. I think the first person to say this really crisply was Chris Hayes in The Twilight of the Elites, when he said this kind of inequality has a fractal character in which, at each rung, the inequality is reproduced in the narrower elite. And it’s even worse than that, because increasingly the division between being secure and being precarious is higher and higher up the distribution. And so more and more people who historically thought of themselves as part of the elite are coming to realize that they have more in common with the middle class, and that’s a powerful political force.

The other point is that even the narrow elite is not flourishing. Its kids in particular are not flourishing. I cite in the book this study of a Silicon Valley high school where 54 percent of the kids have moderate to severe symptoms of depression, and 80 percent have moderate to severe symptoms of anxiety. That’s not a good system. They’re so rich, and the diminishing marginal utility of income at that point is so steep, that if they could see what this is doing to them, I think that some of them would peel off and say, “Hey, we can do better than this.”

CS: You lay out two pathways out of this mess. What do you propose?

DM: One policy is based in education, and one policy is based in the labor market. Remember, I have this idea about this feedback loop between education and the labor market. And so the response is to move the feedback loop in reverse so the same forces that built up meritocratic inequality can help to unwind it. On the education side, it’s really important to understand that if I am right that the core of the problem is the gap between the rich and the middle class, not the gap between the middle class and the poor, traditional policies that aim to improve education at the bottom, while they may be required by justice, won’t solve the problem.

What one needs to do instead is find a way to reduce the gap between the middle class and the top. So what we can do is dramatically expand, and therefore dramatically dilute, the specialness of elite education. We have to force elite schools, elite universities, elite colleges to admit many, many more students, and to admit the new students from outside of rich families. Now, the Ivy League today spends almost twice as much per student per year as it did in 2000, so these places are well able to afford it. And there’s a natural lever to do it: All of these institutions are tax-exempt, because they’re treated effectively as charities. But if they educate more students from the 1 percent than from the bottom half, they’re not charities, they’re clubs. They should be told, “If you don’t start serving the public, you lose your tax exemption.” What that would do is it would massively expand access to education. It would also help the elite because it would reduce the competition to get in.

CS: You say these elite schools should double the attendance, and I’m wondering if that will really be enough. Some of these already have such low acceptance rates—

DM: Double the attendance, and take the new students from outside of rich families—that’s an important part of it. Look, this policy would apply not only to Harvard and Yale, it would apply to all private universities. It would also apply to all private schools and private kindergartens. All of these institutions, right now, have massive implicit tax subsidies and what this would do is it would dramatically increase, across the spectrum, access to education at every level of eliteness.

You would have a much larger group of educated people, but none of them would be as exclusively or elitely educated as the group you have now, and that would suppress top wages. It would cause innovators to come in and find ways to deploy these many more educated people in productive ways, thereby raising middle-income wages. And then you would have less competition to get into the elite schools because it wouldn’t matter so much where you went to school, and that would make the schools even less elite. That would change the distribution of the skill profile of the workforce. All the mechanisms that have built up meritocratic inequality, over half a century, would start unwinding it.

CS: Let’s talk about your second policy. I think without it, you could easily imagine new selective mechanisms emerging in education. Could you talk about your second policy idea and how it interacts with your first?

DM: The second idea is to have a labor market policy that systematically favors mid-skilled workers. The particular mechanism for that that I emphasize in the book, has to do with taxation, and in particular with the wage tax. The Social Security wage tax applies to incomes up to roughly $130,000 a year in wages. After that, it’s zero. That means that for most middle-class American families, the Social Security wage tax is the biggest tax they pay. It also means that when you add the wage tax on top of the income tax, mid-skilled middle-class labor is the highest tax on production in the economy. There’s an enormous tax incentive to replace, say, 20 workers making $100,000 a year with one worker making $2 million a year, especially if that worker can be given stock options, so that her income suddenly gets taxed as capital gains. There can be a 20, 30 percent difference in the marginal tax rate that these guys pay, and that’s an enormous incentive for hollowing out the middle of the labor market. So get rid of the cap. Tax elite wage income fully at the Social Security wage tax rate.

Obviously, also stop carried-interest treatment for what’s really labor income. That would generate substantial revenue that could go to expanding education and some of it could go to wage subsidies. Wage subsidies, I think, are very important. If they’re correctly structured, most of them can go to labor. Wage subsidies support the creation of jobs that mid-skilled workers do. They’re not just a transfer, they also change the labor market, and that’s incredibly important over the long run for producing a stable, flourishing middle class.

CS: Your book doesn’t really have villains, and you end your book with a variation of “workers of the world, unite.” You write, “the workers of the world—now both middle-class and superordinate—should unite.” But when Marx and Engels wrote their call, there was a sort of bad guy to organize against: capital. Is there—

DM: First of all, you have to be careful about how many bad guys there are in Marx. If you’re a scientific socialist, you believe that the way this plays out is mostly independent of the motives, good or evil, of any individuals. You also believe that justice is a bourgeois concept, so you’re not likely to be a moralist about injustice. You’re interested in systems and structures and how they will influence material class interests over time. In that sense, while I’m not an orthodox Marxist, I have the same sentiment.

The only bad guys that there are in the book are populist nativists, who I think are that. But even there, for many of them, it’s the natural response to the situation they find themselves in. Accounts that emphasize the bad guys have implicit in them the idea that if the bad guys weren’t bad guys, then we would be OK. It’s not just that the conventional account misses what I think is most of the problem; it implicitly accepts a set of ideals that denies that what is most of the problem is the problem.

CS: You mentioned populism, and so I wanted to ask you what you saw as the connections between the meritocratic trap and the rise of Trump.

DM: I think we should distinguish between two forces, nativism and populism. Nativism is a kind of ethno-nationalist view that there are foreign pollutants among us, and that’s connected to a certain kind of meritocracy, because of what I call the “dark psychology of justified disadvantage.” The idea is this: What meritocratic inequality does is characterize what is, in fact, structural exclusion of everybody but the elite as an individual failure to measure up. This is a classic Marxist account, as it prevents the coming into class consciousness of a group that is structurally disadvantaged. When a disadvantage is cast as an individual failure, and therefore as morally justified, it becomes imaginatively hard to reach for the moral high ground in protesting against it. The anger doesn’t have an outlet that speaks in the language of the universal humanity, so that’s the first point.

The second point is that elite institutions are, both for good reasons and bad, deeply committed to diversity inclusion around identity politics. The good reason is, there’s an enormous amount of subordination, oppression, and bigotry in the world, and elite institutions were historically, and are still today, complicit in it. And so the good reason they’re committed to this is that they want to be better on an important dimension of human equality. At the same time, if I look at my institution, Yale Law School, it’s not racially egalitarian, but it could be racially egalitarian and still be Yale Law School. It’s not an apartheid institution, that is to say, an institution whose identity depends on racial subordination. But it could not be economically egalitarian and still be Yale Law School. This is the bad reason why it’s so obsessed with diversity and inclusion; focusing on diversity and inclusion in the shadow of meritocracy launders economic exclusion.

And so now, if you’re in the middle class and you’re being excluded economically, and the ideology is casting your structural exclusion as an individual failure, and those at the top keep emphasizing diversity and inclusion, the natural move is to say, “Hey, I have my own identity, it’s the identity of white male Christianity, and you’re excluding me.” Well, that’s called white nationalism.

Populism is a little different, so the key features of populism are disdain for institutions and a rejection of the rule of law. That is to say, the non-institutionalized embodiment of the people, as expressed by a charismatic leader, has more legitimacy than laws and institutions. If my diagnosis is right, that what is keeping the middle class and the working class excluded is not corruption or capital but elite labor and the institutions that build it up, then it’s perfectly understandable that if you’re in the excluded middle class, you’ll have the view those institutions aren’t working.