Tuesday, June 17, 2014

Glimmer of a Meritocracy

I watched The Best Years of Our Lives recently. This is a great film set a year after World War II, about three men returning home to the same “heartland” town and readjusting to life after military service. At the beginning of the film they flew home together in a military transport plane and all you knew about them was their military ranks. As they were dropped off at their homes, in order of rank, much was revealed: the sailor lived in a solidly middle-class neighborhood, the Army sergeant lived in a swank downtown apartment building, and the Air Force captain was from the slum. The sergeant had deferred to the captain while they were in uniform, but out of it he was a wealthy banker, while the captain had worked as a soda jerk before the war. What was communicated eloquently was that in the military during wartime, character and competence was rewarded with less regard to class status than in the civilian world. What you learned in war was that a man’s ability was not linked to his position in society.
One of the themes of the film is the transition from the relative meritocracy of the military back to the ruthless world of capitalism where the main consideration is your money or your training. Being a good, capable man is not enough. The captain ended up back in the same drugstore, working as a soda jerk. The banker was put in charge of making G.I. loans, and when an ex-soldier applied for a loan, the banker approved it even though the man had no collateral. He later had to defend the decision to his boss, saying in the war he learned how to read a man’s character and he knew he could tell a good risk, a man who would pay his debts.
I found myself wondering how much this experience of meritocracy, created by the war bringing men of all classes together, led to what economists call the Great Compression. This was the period from the 1950s through the 1970s when income inequality was at its lowest in the United States. When CEOs of companies didn’t expect to be paid hundreds of times their employees’ salaries. When taxes were much higher than today and wealthy people paid them. When unions were thriving.
French economist Gabriel Zucman has been researching tax evasion around the world. In an article in yesterday’s New York Times, “True Cost of Hidden Money,” he’s quoted as saying that it was not socially acceptable to evade taxes in the years after WWII:
“There’s a profound shift in attitudes that happened in the 1980s,” Mr. Zucman says. “In the ’50s, ’60s and ’70s, taxes were much higher, yet it was not considered normal to try to aggressively minimize your tax bill and even to evade taxes.”
This idea that social norms have shifted is also in Tom Toles’ blog post today:
'TOO MUCH!' that’s what we’re missing. We are living in a social environment in which the idea of ‘too much’ has all but vanished. Why is wealth distribution skewing so uncontrollably? Because those few who are blessed, or cursed, by finding themselves in the top 1% simply cannot stop themselves. Because there is no such upper bound as ‘too much.’ Whatever they have cannot possibly be enough, because somebody else has more, or might tomorrow. If they had a thought, or a feeling, or noticed that there was a social norm called ‘too much,’ things would be different. We have far too little ‘too much.’
There was once a glimmer of a chance at the U.S. becoming a classless meritocracy, but I think we’ve lost the chance.

Update: I just watched a documentary about Eleanor Roosevelt, and learned that three of FDR's sons couldn't attend his funeral because they were serving in the military during WWII.  One was a pilot who flew combat missions, another was a lieutenant in the Navy, and the oldest was an officer in the Marines. Can you imagine that today--a President's child not only serving in the military but going into combat?

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