November 30, 2013

Declining meritocracy in an age of greater status striving

There's a discussion at Steve Sailer's about the rise and fall of meritocratic tests in hiring, riffing on this article in The Atlantic. It was low around the turn of the 20th C., peaked in the mid-century, and fell out of favor sometime during the '70s. Most of the article is about how Big Data may help revive and re-vamp test-based hiring, but for now it's more of a nerd obsession than a widespread business practice.

By the way, what was the prevailing way of hiring around the peak of intra-elite competition and inequality, in the early 1900s? For workers, it was ruthlessness in a melee:

Near the turn of the 20th century, one manufacturer in Philadelphia made hiring decisions by having its foremen stand in front of the factory and toss apples into the surrounding scrum of job-seekers. Those quick enough to catch the apples and strong enough to keep them were put to work.

I'm sure they would have made great Black Friday shoppers. And for managers?

In those same times, a different (and less bloody) Darwinian process governed the selection of executives. Whole industries were being consolidated by rising giants like U.S. Steel, DuPont, and GM. Weak competitors were simply steamrolled, but the stronger ones were bought up, and their founders typically were offered high-level jobs within the behemoth. The approach worked pretty well. As Peter Cappelli, a professor at the Wharton School, has written, “Nothing in the science of prediction and selection beats observing actual performance in an equivalent role.”

Buy-outs by behemoths, where the former leaders are absorbed into lesser roles within the newer bigger trust -- sound familiar? If people's thirst for ever greater status and wealth is insatiable, this Borg-like assimilation is inevitable.

But resistance was not futile. During the 1920s, the elites agreed to rein in their pyramid-climbing, for the stability of the society, after the explosive climate of World War I and its aftermath. Not long after, inequality began steadily falling. What new norms were adopted by the middle of the century?

By the 1950s, it was not unusual for companies to spend days with young applicants for professional jobs, conducting a battery of tests, all with an eye toward corner-office potential. “P&G picks its executive crop right out of college,” BusinessWeek noted in 1950, in the unmistakable patter of an age besotted with technocratic possibility. IQ tests, math tests, vocabulary tests, professional-aptitude tests, vocational-interest questionnaires, Rorschach tests, a host of other personality assessments, and even medical exams (who, after all, would want to hire a man who might die before the company’s investment in him was fully realized?)—all were used regularly by large companies in their quest to make the right hire.

During the Great Compression of roughly 1920 to 1980, ruthlessly jockeying for status was taboo. That belonged to the Gilded Age with its robber barons, courtesans, and other professional strivers. Now you were supposed to be more content with what you had, and not step on someone else's skull just to so you could own a second car.

Perhaps the rise of meritocratic testing was a way the elites found of dampening the internecine status-striving that newly blew the country up in the wake of World War I. "Quit your complaining -- the test says you belong in this range, and that's where you go. Don't bother trying to act like a courtier."

Objective tests have a natural ceiling, where no extra amount of resume-padding, networking, and butt-kissing will alter your destiny. It contains elite status jockeying.

Here's a reminder of what the Great Compression business culture was like at the executive level, from Fortune magazine in 1955. You get a good feel for mid-century cocooning and isolation, but you also can't help but notice how self-effacing and reining-it-in the elites were compared to the robber barons or our neo-robber barons today.

During the late 1960s for elites, and a little later for everyone else, the restraints of the Great Compression came undone, probably as folks had forgotten or were unaware to begin with of the soaring inequality and social-political instability of the period running from the Civil War through the Gilded Age and culminating after WWI.

Peter Turchin, whose basic "structural-demographic" framework I'm borrowing here, has a series of posts on the topic of how and when elite competition and over-production of elites began. Straightforward measures like enrollments (per capita) at law schools, business schools, and medical schools, not to mention the higher ed bubble in general, all point to the 1970s as a transition era. By about 1980, the break with the mid-century restraint was complete.

What then became of hiring based on objective tests?

Remarkably, this regime, so widespread in corporate America at mid-century, had almost disappeared by 1990. “I think an HR person from the late 1970s would be stunned to see how casually companies hire now,” Peter Cappelli told me—the days of testing replaced by a handful of ad hoc interviews, with the questions dreamed up on the fly. Many factors explain the change, he said, and then he ticked off a number of them: Increased job-switching has made it less important and less economical for companies to test so thoroughly. A heightened focus on short-term financial results has led to deep cuts in corporate functions that bear fruit only in the long term.

Over the past several decades, companies don't want to invest in testing out potential hires, when they're so footloose about where they work (see the rest of the article for numerical data, or consult your own experience). All that costly scientific testing wouldn't pay off until it discovered and hooked a good fit for the long term. Instead, new hires always have their eyes peeled for the next job, always on the move to find an angle on reaching one rung higher on the status ladder. Not content with a decent job at a good company.

With the return of unbounded status striving, hiring is more and more driven by "playing the game" factors, as though you were a latter-day courtier:

Perhaps the most widespread bias in hiring today cannot even be detected with the eye. In a recent survey of some 500 hiring managers, undertaken by the Corporate Executive Board, a research firm, 74 percent reported that their most recent hire had a personality “similar to mine.” Lauren Rivera, a sociologist at Northwestern, spent parts of the three years from 2006 to 2008 interviewing professionals from elite investment banks, consultancies, and law firms about how they recruited, interviewed, and evaluated candidates, and concluded that among the most important factors driving their hiring recommendations were—wait for it—shared leisure interests. “The best way I could describe it,” one attorney told her, “is like if you were going on a date. You kind of know when there’s a match.” Asked to choose the most-promising candidates from a sheaf of fake résumés Rivera had prepared, a manager at one particularly buttoned-down investment bank told her, “I’d have to pick Blake and Sarah. With his lacrosse and her squash, they’d really get along [with the people] on the trading floor.” Lacking “reliable predictors of future performance,” Rivera writes, “assessors purposefully used their own experiences as models of merit.” Former college athletes “typically prized participation in varsity sports above all other types of involvement.” People who’d majored in engineering gave engineers a leg up, believing they were better prepared.

There's another reason, well discussed by conservatives, for the decline of objective testing: namely the fact that whites tend to do better than blacks:

The Civil Rights Act of 1964, which exposed companies to legal liability for discriminatory hiring practices, has made HR departments wary of any broadly applied and clearly scored test that might later be shown to be systematically biased. Instead, companies came to favor the more informal qualitative hiring practices that are still largely in place today.

I'm starting to think the whole "disparate impact" thing is a rationalization to do away with merit-based hiring, in an era of greater status striving. The charge of "b-b-but, it's racist against blacks!" is just a shameless smokescreen that the strivers know will sell well with the target audience.

For example, my impression is that other countries without many Non-Asian Minorities share our disdain for objective testing, etc. It makes it even harder to do objective testing in America, but I'm convinced that it's a second-order thing. The main source is the discontent of elite strivers who want to be able to dazzle the HR rep with their fifty pounds of filler and connections.

And the military continues to use IQ testing. The usual argument is that their jobs are too important to let diversity worship fuck them all up. But you could say that about all kinds of industries, and in fact the military isn't exactly beating back the Indians, Nazis, or Commies these days. I think it makes better sense to see it as part of the military's wish to keep status-striving from getting too out of control -- that could get violent and destabilizing to the political order. Income inequality within the military must be far less than in the private sector, since the top-ranking generals still don't make as much as hedge fund managers.

Aside from the noxious atmosphere produced by the striving mode of thinking and behaving, it neuters the ability of people to do just do their damn jobs well and get paid decently for it. The current regime does not reward competency but rather resume-padding and networking.

Like, isn't it striking how much stuff they invented between 1920 and 1980, on a per-decade basis? The '80s weren't so bad, but then that was just the beginning of the trend toward where we are today, politically and economically. And the last 20-odd years? Jack. All we're better at these days is how to socialize costs and privatize benefits, and how to best dress it up in fashionable ideology -- see the housing bubble, bank bailouts, etc. Neo-con corporate cocksucking mates with liberal diversity worship -- imagine the beautiful offspring they'll create!

At any rate, there's another sign to watch for, to anticipate the unwinding of this spiral of intra-elite competition -- a renewed sincere interest in objective meritocratic testing.


  1. Gabriel Kolko writes in "The Triumph of Conservatism" that the idea that trends in firms were toward consolidation in the early 1900s is a myth. There was actually rampant competition between lots of firms, which is precisely what elites wanted to suppress (though libertarians cite his work, Kolko is a Marxist and doesn't like all that competition either).

    The people who are supposed to be the big status-strivers in the military are higher level officers, rather than the enlisted men being screened with the ASVAB. That's who de Tocqueville worried would try to gin up wars.

  2. I kind of have a similar view of the process - people like "unnatural" and "unfair" feeling objective tests best when they don't actually contribute a great deal to meaningful success or failure.

    In the mid-century, that's because there's not much variance in success or failure. Failed on the objective test? OK, well, there's plenty of high wage openings in the economy, and then if you're a person who's better than their test results then you can still get in and then succeed (but anyway, people aren't going to be striving for personal wealth or income that much).

    In the modern age, because the variance in success or failure is so high, rather than face a situation where objective tests are a meaningful filter, people try to route around them.

    Instead, new hires always have their eyes peeled for the next job, always on the move to find an angle on reaching one rung higher on the status ladder. Not content with a decent job at a good company.

    There's a weird dual strucutre behind this motivation in the Great Expansion -

    - Below a certain threshold (usually one below which the current elites remember being a part of their career progression), due to the forces of globalization, technology and immigration, workers are seen either as expendable costs or in need of a good beating with stick to make the lucky duckies work.

    So there's not much to be gained continuing to work for one company that will pay you (in real terms) less and less over time. Just look around for where it isn't as bad right now (where's got less worse?), because sure as fuck no one will try to offer you positive incentives. Push factor motivating job switching.

    - Above a certain threshold, high performers are instead seen as "superstars" who need positive incentives, so every company is competing to offer them more. Pull factor motivating job switching.

  3. Great post.

    Not obvious at all. I would've thought more status striving meant more meritocracy.

    I think one of the worst aspects of status striving is that people always seem to be leaving or moving around.

  4. Labor mobility has declined. But my family moved around precisely because my dad's job required it. Perhaps people are moving less because they are more loyal to their locality than job?

  5. Re: decline in labor mobility, it's the rise of superstar cities. No moving around between second tier cities or small towns any more.


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