Editor's Choice

As Meritocracy Fades, Social Networks Rise

A key to getting people to indiscriminately share online is to convince them that the "merit" of what they're sharing is irrelevant -- that they don't need a reason to share, that sharing is intrinsically rewarding. Many of the arguments in favor of using Twitter, for example, can be reduced to this, usually with the winking implication that sharing is also good self-marketing in partial disguise. If we worry about having something important to say, we will miss out on the chance to say something potentially valuable to someone else. Hence every moment we stay silent, we are destroying value! Sealed lips sink ships!

The ideology of meritocracy, I think, is incompatible with this ideology of sharing, which belongs to a vision of a "networked society." We are shifting away from the idea that we accomplish success through special personal merit (the much-hated elitist model), toward the idea that we achieve success through maximum publicity (the much lauded and enjoyed Jersey Shore model). Populism, the contempt for expertise, the championing of reality TV, the futility of "going Galt" -- they are all connected. But to explain why, it helps to debunk the meritocracy myth first. In this Forbes opinion piece, Reason Foundation analyst Shikha Dalmia uses Hayek to make a libertarian case against the idea of markets rewarding merit. This is unusual, as libertarian/Randian types tend to see market rewards as proof of virtuously selfish conduct, which makes most sane people think they are out of their minds. Dalmia's case hinges on the difference between merit -- a moral idea -- and value, an economic concept. Markets reveal value, not merit. And value, if you follow Hayek's argument in "The Use of Knowledge", is mainly generated by happening to have vital, local information at a fortuitous time -- not because you are a genius inventing brilliant information for market consumption. Dalmia:

The beauty of the market, Hayek brilliantly pointed out, is that it allows people to use knowledge of their particular circumstances to generate something valuable for others. And circumstances, he emphasized, are a matter of chance -- not of gift. Furthermore, since no two people's circumstances are ever identical, every producer potentially has something--some information, some skill or some resource--that no one else does, giving him a unique market edge. "[T]he shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others," noted Hayek.

In a functioning market, Hayek insisted, financial compensation depends not on someone's innate gifts or moral character. Nor even on the originality or technological brilliance of their products. Nor, for that matter, on the effort that goes into producing them. The sole and only issue is a product's value to others. Compare an innovation as incredibly mundane as a new plastic lid for paint cans with a whiz-bang, new computer chip. The painter could become just as rich as the computer whiz so long as the savings from spills that the lid offers are as great as the productivity gains from the chip. It matters not a whit that the lid maker is a drunk, wife-beating, out-of-work painter who stumbled upon this idea through pure serendipity when he tripped over a can of paint. Or that the computer whiz is a morally stellar Ph.D. who spent years perfecting his chip.

Most people instinctively don't like this sort of definition of value, as Dalmia points out. It smacks of postmodernism, of contingency and relativism, of a whimsical world without justice. It makes a mockery of the idea of use value as a basis for economic value. There is only exchange value, which can seem to imply that in a market society, everything is negotiable, even what heretofore seemed like absolute truths.

Meritocracy is a ex post facto rationalization that helps mask this somewhat terrifying reality about capitalism -- it provides us a first line of psychological defense when we are in danger of recognizing that "all that is solid melts into air," as Marx memorably put it in his description of capitalism's relativizing force in the Communist Manifesto:

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

Of this, Dalmia insists, we need not be afraid. Shine sweet freedom, shine your light on me: "Markets don't just expand and democratize the concept of merit; they render it moot," Dalmia argues. "No longer does it matter what great qualities reside in you. What matters is if you can make them work for others. The concept of merit is replaced by that of value. Merit is intrinsic, concentrated and atomistic; value is relational, decentralized and social." In other words, market yourself well and you don't need any intrinsically worthy qualities, be they the aristocratic chimeras of breeding, the moral virtues sanctified in religion, or the cold, hard cash worshiped by capitalists. Instead you just need to share what information you have without necessarily understanding its value or believing that it has intrinsic merit, but overrating its importance all the while. Then society will return the "real" value of it to you, apparently.

And in that we have a pretty good explanation of the rise of social networks -- which have the magical property of making markets for information appear as nonmarket forums for sociality. Part of the rise of the "networked information economy," as Yochai Benkler calls it, involves using the word network as a screen for the word market so that the players in that market will rip themselves off and contribute labor and content for nothing.

What would happen, though, if networks actually supplanted markets -- if people stopped leveraging the unique contextual information they possess to game markets and instead shared it compulsively, without a view to undermining competitors but out of a quest for social recognition? Do we have to have markets providing an incentive to exploit information to make that information useful and efficacious, to translate it into "value"? Or could masses of volunteered information be sorted according to some other principle ("merit"?) in order to derive facts about the conditions of the economy at various times and places?

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