Bernanke on Meritocracy

Federal Reserve Chairman Ben Bernanke has some excellent reflections on the ethics of meritocracy in his baccalaureate address to Princeton:

We have been taught that meritocratic institutions and societies are fair. Putting aside the reality that no system, including our own, is really entirely meritocratic, meritocracies may be fairer and more efficient than some alternatives. But fair in an absolute sense? Think about it. A meritocracy is a system in which the people who are the luckiest in their health and genetic endowment; luckiest in terms of family support, encouragement, and, probably, income; luckiest in their educational and career opportunities; and luckiest in so many other ways difficult to enumerate–these are the folks who reap the largest rewards. The only way for even a putative meritocracy to hope to pass ethical muster, to be considered fair, is if those who are the luckiest in all of those respects also have the greatest responsibility to work hard, to contribute to the betterment of the world, and to share their luck with others. As the Gospel of Luke says (and I am sure my rabbi will forgive me for quoting the New Testament in a good cause): “From everyone to whom much has been given, much will be required; and from the one to whom much has been entrusted, even more will be demanded” (Luke 12:48, New Revised Standard Version Bible).

Bernanke is picking up on two very important senses of merit. In the one sense, the one used almost exclusively in the U.S., it means to deserve something by virtue of one’s skills and abilities. I may deserve a raise because my work is excellent or I might deserve to be admitted to Princeton because I have excellent SAT scores, GPA, and extra-curriculars. The second sense is more philosophical and harder to pin down. Do I actually deserve the abilities I have? As Bernanke points out, the health, genetic endowment, family support, and opportunities that ultimately lead to our skills and abilities are not of our own making.

That said, because (partial) meritocracy is at least better than the other available systems, it does make sense to suggest that being blessed with (or lucky enough to have) the nature and nurture that allows one to do well in a meritocracy does then come with added responsibilities. Peter Singer argues forcefully that if we have the power to eliminate something bad (like extreme poverty) without sacrificing something of comparable significance, then we should.

Bernanke also points out that the U.S. is not a complete meritocracy. For those of you wondering what an absolute meritocracy might look like, Matt Yglesias uses the example of professional golf. It’s easy to define talent in golf (lowest average score), and in this case meritocracy leads to massive inequality, with a very few excellent golfers capturing almost all of the wealth.

Some form of partial meritocracy is probably the best human beings can do as an economic system. But that doesn’t mean it’s ethically justified. I’m amazed to hear it from a federal reserve chair, but hopefully more policymakers will be reminded to keep in mind the ethical shortcomings of all human institutions.

Nate Kratzer
Senior Data Scientist

My research interests include poverty, inequality, and data science.

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