Are elites meritocratic and efficiency-seeking? Evidence from MBA students
arxiv.org
arxiv.org
"In the efficiency cost treatment, the winner was determined by a coin flip and redistribution incurs an “adjustment cost” that reduces the total earnings available to participants. For every $1.00 reduction in the winner’s earnings, the loser’s earnings increase by only $0.50"
So out of $6, the average MBA of the 271 sampled redistributed $1.30 to the loser who was not obligated to receive any of it. So 22% redistribution. Less if the redistribution has costs. Seems fair?
I agree that 22% redistribution seems about fair, but I'm biased by a lifetime of rates of taxation.
Something I'm very curious about is what should we be trying to optimize for (economic growth, sense of well-being, energy output, raising the economic floor, etc.?) and then what gini coefficient optimally produces that outcome.
I understand it's outside the scope of this study, but my bias is my curiosity for what should we be aiming at and what principles will optimally produce the result, so then at least we know in theory what we should be trying to do.
Many people born into or groomed for an elite status (via inherited wealth, rich families, strong support systems, etc) are rationally self preservationists. They were born on third base and know it. Many subconsciously know they do not belong there and cannot live up to the level of performance, intellectualism and hard work that laid the foundation for their current state or that others had to endure. Thus, they need support from the system to preserve their current state.
People who became elite in nature, are far more likely to value meritocracy. They lacked support, didnt know there was a "system" to be leveraged (eg getting unlimited time for an SAT score with a doctors note), had a chip on their shoulder, grinded their way to be top of their class, were the most productive, knocked on more doors, took risks others would consider irrational, etc.
At every level they've had to fight for what they have in a world where the criteria is often opaque. Being genuinely competent, they don't have an innate imposter syndrome, and thus, they value a system that has a clear and objective criteria for them and others, because they are confident they will operate fine within it.
EDIT 1: to add: With the above in mind, the more useful analysis in my opinion would be to assess the extent to which ethical frameworks and the role of fairness and meritocracy differ between those who were self-made (eg 1st of their generation to go to an IVY or get an MBA) vs not in "elite" positions of wealth or power.
EDIT 2: I'm not suggesting all people born rich don't deserve their success or do not possess these qualities of hard work, etc.
All they really say is some people have an advantage. It doesn't mean they have it easy. We get advantages from all parts of life, and refusing to engage with recognizing them is a decision, but I don't find it particularly healthy.
Due to various reasons outside of my control, my life has been objectively easier than others. It doesn't mean it was easy. Just easier. If even one or two of those things changed my life could have ended up very different.
I've had challenges in my life. At no time have I ever lived somewhere for more than two weeks with no running water, because I was born American and sufficiently affluent and lucky to be both in towns with municipal water and in buildings connected to that water. So I get to completely cross off "Has clean running water all the time" from my list of needs and wants, and not everyone does.
... and I gotta say, potential employers like you a lot better when you've had a shower that morning.
A commonly-held belief is that that statement is true and we deal with all of the follow-on effects of that belief as a result.
A Japanese person has Japanese privilege in Japan, an Egyptian in Egypt, etc
If you’re “culturally American” in America (regardless of race), you will benefit.
If you’re White and culturally American in parts of America where White American culture dominates (like our institutions, which reflect a country that has been historically 90%+ White), you will benefit
If you’re White and in a place where non White culture dominates, you will be relatively disadvantaged. Most countries around the world, and even parts of the US (parts of Chicago where you have significant disadvantages from being White).
This is not a statement about competence, but about inflated ego.
Or use the accurate term: elitists
The people popularly referred to as “elites” are in practice status seekers who adhere to elitism, the belief that certain people are superior to others. Using the word “elites” without quotes is really creepy
Milton Hershey is known for his candy company. Somewhat less known is the fact that his successful candy company was his fourth; his three previous bankrupted (mostly due to fluctuations in prices moving candy from tenable to untenable as a business) and he'd burned through so much of the family fortune pursuing them that his relatives cut him off from further loans. His father before him had liquidated his own piece of the family fortune speculating on opportunities. It could easily have been the case that those speculations might have paid off, which would have made Hershey the son elite category 1 (in status); similarly, if Hershey hadn't found one last source of investment money from a former employee, his candy-making aspirations would have ended when the family cut him off and we wouldn't know his story at all.
The system of stories we tell ourselves highlights the merit and downplays the luck; we don't remember the failure cases, including, often, the failures that predated the success. A lot of people who lacked support, didn't know there was a system to be leveraged, and grinded as far as they could before something critical broke are out there; they just don't get to give TED talks on what complete failure tastes like. Nobody gets to hear the lecture from Henry Hershey on "I mortgaged my family's future on opportunities that, had they paid off, would have made my son and wife wealthy and comfortable for the rest of their days... But none of them paid off and it was all ultimately objectively wasted effort, energy that would have been better spent tending a modest homestead and making it thrive in a small but sustainable way."
A better way of putting it is probably: barring terrible luck, nearly anybody can be successful if they’re willing to make the sacrifices, work hard, learn quickly, and keep at it long enough. And even if you get terribly lucky, it just makes your odds worse - there are people out there who’ve had worse luck than you and still became more successful than you.
The problem is, I don't think we have nearly enough global signal to make that assertion. Wouldn't we need some objective metrics on how many people succeed vs. fail correlated against their level of effort?
I have some pretty deep-seated concerns that we have assumed "fortune favors the brave" without comparing that assertion objectively to other hypotheses such as "fortune favors the sons and daughters of the successful" or "fortune favors the pretty" (where "pretty" here is standing in for whatever mostly-permanent physical characteristic one might choose: sex, gender, skin color, working legs, what have you). To be certain, from a personal standpoint the only one of those you can control directly is your own boldness so that matters in terms of personal choice... But policy has to look at the level of not personal choice, but the effects rules, laws, and incentives have on sculpting society as a whole.
That is to say, if I'm expected to be a hard worker, I will work harder than if I'm expected to be a lazy sloth. If I'm expected to behave kindly, I will indeed behave kinder than if I'm called "that scoundrel" all my childhood. If people think I must be "a genius like my father/mother" I will picture myself one and study harder. And so on. Not just because I want to deceive or am afraid to disapoint, but also because personalities are made up of such expectations, coming from us or others, and who we want to be, even unconsciously, influence who we end up being.
https://www.cambridge.org/core/journals/perspectives-on-poli...
"Each of four theoretical traditions in the study of American politics—which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism—offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented.
A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. We report on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues.
Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism."
1. Total compensation varies obscenely within the organization. It correlates moderately with intelligence and in no way with effort. Some of the most useless articles you work with make the most money.
2. Leadership really, really, really does not want peers sharing compensation info. I have been offered seven figure equity boosters on the condition of absolute confidentiality. This is the “efficiency” metric of the linked paper. If it is hard for leadership to distribute compensation in ways that would be seen as non-meritocratic, they lose an enormous amount of power over the management team.
Sunshine is the best disinfectant.
My wife works for a very large company that you've heard of. Everyone is assigned a pay band that corresponds to their title. Everyone can go on to the portal and see approximately how much someone else earns (within a narrow range) based on their level and geographical location.
It hasn't brought compensation up. If anything, it has kept it down. My wife was objectively underpaid for a while and on the verge of leaving, but HR wouldn't allow higher pay because it didn't fit the band. They pointed to her peers and showed that they were earning the same amount. Eventually she did an end-run around it by transferring divisions and getting promoted to another level, but it would have been so much easier for everyone if her boss could have just given her a raise even though it violated the pay band.
I have friends who work for the local government including the state run university. There is a website where anyone can go search for their name and see exactly how much they were paid per year, down to the penny. Having browsed the website I can say it has not resulted in higher compensation, as they're all paid surprisingly little.
You can get life changing amounts of money by being offered a strategic project and asking for a huge option grant as a bonus if you deliver.
Hilariously, some big companies work around this by having several entries in the HR systems for a single official title, each with independent pay bands, since the title was not required to be unique within the database. I remember one company had around a thousand different independent entries for a much smaller number of technical titles accumulated from making individual exceptions.
Even if someone had the same title as you on the same team, there would be no correlation with pay bands. They liked to use this to hide the fact that new hires were being paid significantly more than people that had been hired a few years prior.
> It hasn't brought compensation up. If anything, it has kept it down. My wife was objectively underpaid for a while and on the verge of leaving,
Can you expand on this because it's not making any logical sense.
Is the company underpaying everyone with that title, is her work not in line with her title (as compared to other employers), or is there something else (I'm hesitant to call BS, but there is a tendency within these types of conversations for people to invent scenarios to try and portray some sort of political narrative - for the left and right)
I'm not - it is bullshit.
If she earned the top of the band, she was by definition not underpaid. She in fact earned more than every other employee that was not top of the band.
She might have wanted more money for what she was doing (and it has my sympathy, I too like more money).
But the solution was to either be promoted - which she may not have wanted, and I am sympathetic to that, I also don't enjoy promotions - or to move to a company that paid more for that role.
1. There are skillsets/capabilities that the organization finds difficult to get on the market, as well as brings disproportionate profits to the organization. For example, a database company may need to hire two software engineers, one writing CRUD apps or infrastructure automation, and the other one for distributed systems implementation. In such a setting, while both people's titles may say "software engineer", the reality is that one is paid much higher than the other, both because the database is the bread and butter for that company, while the CRUD/infrastructure thing may be a very small part used by an internal team or by a few customers.
2. People usually like to believe that they're at least better than average and bring the same level of contributions to the team. This is most definitely not the case, and an engineering manager, VP, sales manager who simply appears to talk to people all day long may actually have important contributions such as overseeing key projects, talking to customers etc. which may be the thing that the company needs to lock that large sale or prevent customer attrition, or whatever the case may be.
People will often jump to favoritism or bias or another explanation, and in some cases, they absolutely do happen. But that is not the only explanation, and without data to distinguish between the two, people will gravitate towards the uncharitable interpretation, which allows them to paint themselves in the most positive light.
As an engineer I have constantly heard throughout my career complaints that "We make the product, without us the sales wouldn't have a job, so we deserve better compensation"
To which I have always replied - speaking as an engineer, I struggle to sell a product, and I have seen multiple products that were technically superior to their competitors fail (Beta vs VHS!) - sales and management are vastly more important than engineering.
A majority of people can believe that they are better than the average, and be right.
Now, if we were speaking about the median...
The other issue is that the majority of people think they generate more value than they actually do. This is the "almost everyone believes they are above average" phenomenon that consistently shows up across a diverse range of domains. People are usually happier when such beliefs are not publicly challenged on a regular basis.
Confidentiality only helps those in power to suppress compensation.
"Analyzing fairness ideals, we find that MBA students are less likely to be strict meritocrats than the broader population"
No.
How do you tell?
We need laws to stop people discriminating against whole swathes of people for reasons that have zero to do with merit.
This topic is important and the study interesting, but the methods exhibit the same generalizability bias as the famous Dunning-Kruger study.
The referenced MBA students -- and by extension, the elites -- only reflect 271 students across two years, all from the same university.
By analyzing biased samples, we risk misguided discourse on a sensitive subject.
@dang
The point is that 'merit' and the 'elite' in the US feel like they're an ocean apart right now in a lot of cases.
Remember folks, we cannot cherry pick from the failed science of psychology even when it appears to be interesting.
Sounds like we should be less generous to CS findings, not more generous to other fields. (And yes, we should be skeptical of findings in CS as well.)
> given the hardware to do so is limited to such few entities...
That said - what research is happening in CS that needs specific hardware? The theoretical stuff can still happen on chalk boards, and interesting algorithmic or technical advances tend to propagate quickly precisely because someone will reproduce them.
We really shouldn't.
> given the fact that we cannot reproduce many findings in our own field (computer science)
Computer science isn't a "science". Computer science is really a branch of mathematics. For example, when you study computation theory, you prove theorems (deduction). You don't generate a hypothesis and test it.
> given the hardware to do so is limited to such few entities...
Unless you are talking about computer engineering, which isn't really science either but engineering. Computer science isn't done in "hardware". Maybe you should go learn what computer science is.
For example, if you propose some new technique to make databases faster (e.g. "store tuples column-wise instead of row-wise"), you'll implement it and run various workloads with and without the technique enabled. That gives you a quantitative measurement of the merit of the technique.
The engineering artifact is just a by-product. More often than not, the code is thrown away or never used again, once the experiments have been run and the paper has been published.
I came to an opinion that most of the current AI research can be easily reproduced on the small scale. CoT is possibly the only exception as it sounds like it requires certain emergent behavior, but even there I am not sure it is impossible to retrofit to tiny models.
Psychology looks like particle physics compared to fields like dentistry, and not a lot different from a lot of biomedical fields.
Psychology is just the messenger — meta-science goes under the radar but it's probably its biggest contribution to science at large.
I agree about replication in any case (not just psychological studies), but I have to say this seems like it probably would. If anything I think it underrepresents the phenomenon it studies because support for corruption and unethical behavior is likely to be underestimated in this kind of setting/design.
How much should we weaken our epistemic standard in order to avoid difficult conclusions?
You can't escape 3+ billion years of evolution through natural selection.
Yes, everyone looks after their own interests, but some more than others, like in this example the students above: > implement substantially more unequal earnings distributions than the average American
I.e., unequal earnings distribution looks better and better as you climb the social ladder because you benefit more and more. On the other hand, if you are at the bottom you may strongly support more equal distibution because that can only benefit you.
Same reasoning as to why workers unions emerged from the bottom, not the top.
The group that maximizes their long-term reproduction is the one that inherits the earth.
> The group that maximizes their long-term reproduction is the one that inherits the earth.
Yes, that's an interesting paradox in a world where the poorer tend to have more (surviving) children that the richer. But it emerged only very recently on evolutionary scales.
This is why in a village where everyone knows each other people help each other but in a holiday resort locals screw tourists.