the myth of merit in the managerial class

tyranny of being good at exams

I had a few Thoughts about that essay about the plight of young white men in the age of DEI, that’s been going round, but I’m not sure they’re actually worth a full post, which is why yesterday’s is late and today’s is too long, sorry for both those things. In summary, they were:

1. The “bias against Promising Young White Men, for Things They Did Not Do, at the hands of Boomers Who Were Much Worse” is a real phenomenon that is really just an arithmetic consequence of stock-flow consistency; if you want to change the composition of a stock quickly, you have to change the flow by a great deal, and that means that there is a transitional generation that gets hammered. I’ve been writing about it, usually facetiously, in the context of financial recruitment for more than five years.

2. But, what are you gonna do? You can’t ask people to wait five decades to make the change on a “funeral by funeral, science improves” basis. There are always going to be transitional generations[1] and it is always going to be expensive to compensate them. And generally, the social attitude to risk bearing is that this isn’t a special kind of risk you get specially made whole for; it’s more similar to the general business and economic risk that everyone has to bear.

3. And come on, it’s not like anyone’s asking these guys to go and fight in a war. Despite having picked some of the absolute peak industries to experience the transition problem in (very high starting point in terms of bias toward Promising Young Men, very low retirement rate of old men, overall environment of contracting labour market), the essay author admits that he and all his mates basically did all right, some of them got substacks, some of them built ticket resale businesses, etc. They might not have got the socially prestigious jobs they dreamed of, but few do! It might be galling to be a Managing Director at Morgan Stanley if you had your heart set on being a Partner at Goldman Sachs but come on, dude.

4. The real victims of the intergenerational inequity were the previous generations of women and minorities, who didn’t have their whole lives ahead of them when the rules changed, but who didn’t get included in the new compensatory system. I wouldn’t mind reading an essay by one of them.

5. And you have to be very careful when writing this sort of thing, because a) it is always going to sound whiny, b) you are very adjacent to some very smelly stuff in terms of aspersions on the people who were hired under the new regime. The editors at Compact seem to have done a pretty good job in this regard, but it still makes painful reading at some points. Basically, I think the “disenchantment of the generation of white men who bore all the costs of previous generations badness” is interesting enough to be worth maybe one magazine essay, and this guy’s written two, so he is over budget.

Anyway, it got me thinking about the question of “meritocracy”, because that’s what everyone jumped to when reading it. And … I think there’s no such thing. There is such a thing as merit, in the sense that some people are much better at their jobs than others, look around if you don’t believe that. But it’s not something which the interview and recruitment processes of professional and managerial jobs are set up to measure, at all. Like the IQ test, these things get all of their predictive capacity from the detection of gross dysfunction; they are no use whatsoever in distinguishing mediocrity from genius.

[NOTE AND PLEA: my techie and computer-writing-guy friends, I love you all so much but this bit isn’t about you, it’s not about 10x engineers, it’s not about writing code. You have your own ways and practices which I don’t know about, one day I will learn about them but this post is about PMC jobs, please don’t write letters!]

Basically there are four career stages with associated recruitment processes:

ENTRY LEVEL: A bunch of kids with resumes. Some of them will be creative thinkers, hard workers, good managers, some will be lemons. You are absolutely kidding yourself if you think you can reliably pick winners based on the information available. All you can do is select out people who aren’t even capable of keeping their massively disqualifying personality problems under control for the length of a selection centre. You are going to be selecting based on a bit of nepotism, a bit of PLULPLU (people like us like people like us), quite a bit of “am I in a good mood, did I have a nice lunch” and mostly random chance. We all know, by now, that your perceptions are going to be quite biased by PLULPLU and so the 50/50 balls will break in favour of the Promising Young Man too often, so there are systems and processes to try to aim off for that. They make the selection process neither better nor worse, but at least it’s fairer.

SLIGHTLY ABOVE ENTRY LEVEL: By now, people have a bit of time in the job and have begun to develop a track record. They have people who can recommend and vouch for them. And so …

… nope, sorry, it’s still basically random. The real lemons have dropped out, but that “track record” is mostly pure luck, and the references they can give are PLULPLU, luck and bias. You still need to aim off for Promising Young Men and you’re still picking at random.

Yes, this is even true in the examples everyone tries to give of “my job is different actually because they don’t care who you are actually as long as you make money actually”. Even “objective” performance metrics are formed in a context. There are a thousand and one stories of traders who made fantastic profits, then moved to a different firm and suddenly lost all their apparent talent because they were in a different context and hadn’t been able to move their information network.

AN ENTIRELY THEORETICAL MOMENT OF PURE CLARITY WHICH HARDLY EVEN EXISTS: Mid career when you really can get a sense of someone’s merit, because they’ve now produced enough good work in enough different contexts that it’s unlikely to be chance. But how many people are actually applying for a new job at this point in their career?

SENIOR HIRES: At this point, the social capital is the merit. In professional and managerial jobs, your value, your talent, your objective performance and your network are all different names for the same thing. The biases inherent in the system have done the damage by this point and there’s no reversing it. So you are probably stuck with your pale and male hires, but please don’t pretend that there’s anything particularly meritocratic to it.

I think the reason we try to pretend that there’s any possibility of meritocracy is that the gatekeep to the professional and managerial class is “being good at exams”, and that we therefore spend our whole lives subconsciously thinking that success is an exam and that promotion is what happens if you get a good mark on it. (This might explain why academia itself has such a bloody awful case of meritocracy-thinking). Even the most talented senior members of the PMC will always get together and go “my word, I wouldn’t get hired today”. And it’s kind-of-sort-of true, not in the sense that necessarily today’s young people are any more talented, but in the sense that having rolled a six to get where you are today, you can recognise that if you rolled the dice again, it probably wouldn’t be a six.

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[1] This is the only context in which “intergenerational inequity” makes sense, by the way; if something has changed so that a particular cohort is affected.Things like pensions aren’t really transfers from young to old, because today’s young will one day be old.(The UK’s “triple lock”is for the most part a transfer to the young of today, from the young of thirty years hence.)