Meritocracy? Make me laugh.

I loved Delong's comments on Piketty's "Capitalism in the 21st Century."  Read the whole thing.

Full passage I lifted the title from:

Third, meritocracy? Make me laugh. In my view meritocracy does not produce inequality. Rather, true equality of opportunity produces relatively small income differentials because there is always somebody almost as good eager to bid for your high-paid job. Inequality emerges either (i) when this generation's human capital is last generation's wealth, or (ii) when other non-meritocratic factors are creating jobs that are the equivalent of covering yourself with glue, standing outside at a corner in Canary Wharf, and watching the money stick to you as it blows by.

It's surprising to me that these observations aren't more obvious to people. But there is a lot of wealth (and egos) with a strong interest in obfuscating this.

[Update: I would propose a partial solution. Allow companies to free themselves from ownership eliminating most safe investments and forcing holders of wealth to fulfill a socially useful function of investing in risky startups and financing capital investment through bonds. In the long term this would take most capital out of the hands of individuals and put it in organizations while making capital relatively cheap for new start ups. Unlikely, I admit.]