Friday, October 22, 2010

Part 2: What's Wrong with America's Elites?

An issue that I'm even more concerned about than what I covered in my last post is the tendency of elite's to create a kind of self-fulfilling prophecy that those qualities the elites value lead to success because the elites value those qualities.  To a large extent, these qualities are usually of some value, the problem lies in that whatever a given set of valued qualities are needed to fulfill the roles valued by elites there will always still be important roles that require qualities other than what the elites value.

In the case of the US, I see the set of qualities being valued by our elite as being those needed to be a successful businessman and entrepreneur.  This is probably very adaptive, I believe we need rather more businessmen and entrepreneurs as elites than we need other character types.  However, in certain roles the kind of character traits needed to be a successful entrepreneur can be seriously maladaptive.

I'll admit this is more of an anecdotal personal observation than something I have firm evidence for.  Still, something that struck me during the banking crisis was how often the bankers defended the huge payments they were getting by arguing about how they worked very hard and stressful jobs and put in 80 hour weeks.  My gut reaction was that this is exactly the kind of person I don't want handling my money.  I'm very conservative on financial matters and very risk adverse.  I don't want someone that is taking high risks, very success focused, and probably sleep deprived handling my money.  I want a boring, family-man, accountant type that goes home at 5 P.M every day and thinks driving 2 m.p.h over the speed limit is daring.  Someone that hates risk, hates debt, and will watch every penny.

But we don't select our elites on these criteria.  We select them for more entrepreneurial qualities.  We look for risk takers, people willing to work hard, and people willing to sacrifice other aspects of their life to their careers.  In business and new industry this is what we want.  We probably don't want this as often in bankers (I'd add doctors and lawyers but they're a bit outside the elites I'm discussing here), or most political offices (the presidency would be a possible exception).  I see this as a significant flaw in our system.  There are important roles that we need filled that simply aren't well adapted for the risk taking type.  But to get to the higher levels of society, we select strongly for people willing to risk high levels of debt, focus very narrowly on their careers, are willing to work very, very hard, and that tend to be very highly specialized.  For many roles, this is exactly what we need.  But it is important to remember that the best may not necessarily be the brightest, and that even the best and brightest may not be the hardest working.  Our method of selecting the elite results in very good people but it requires certain qualities that may not be the best fit for a particular role.  Finding ways of creating alternate paths into the American elite could only benefit our society.

I especially like the idea of forcing bankers to accept 40 hour weeks and not hiring anyone to a top banking spot that has high levels of debt.  Not going to happen but I think the financial system is the place where high risk profit is ultimately least appropriate because externalities fall particularly disparately on the public at large relative to the person causing the fallout.  And the rewards vice versa.

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