The American Dream is predicated on the belief that hard work, talent and perseverance alone, are enough to carry someone to success and riches. This premise blatantly ignores reality: informal networks of social capital are estimated to be responsible for 85% of job placements and funding for a whopping 75% of startups and new businesses. Without minimizing hard work, talent and perseverance, the fact is, we have social capital to thank for an exhausting list of brands, including: Nike, Facebook, Dell, Amazon, IKEA, Airbnb, Chipotle, GoPro, Tesla, Squarespace, and Applebees. Unfortunately, the list of executives and/or founders who bootstrapped their way to triumph is far less impressive and nearly non-existent by comparison.
Money ≠ merit
These brands and founders are lauded as proof that America operates as a meritocracy and anyone can achieve a self-made status through effort, while conveniently ignoring the part where the bank of mom and dad step in with a check (or a family connection), to get the company off the ground. Nike co-founder Phil Knight’s parents footed the bill for his trip around the world in 1962, which led to securing distribution rights for a Japanese sneaker brand, and the rest is history. Elon Musk’s first company was funded by his dad’s money, then he turned around and sold it for over $300M, plus stock options. Now he’s being funded by $49.5B in government subsidies.
By advancing the belief that success, purely based on the notion of hard work, talent and perseverance is possible for anyone, those without it are inevitably viewed as unmotivated. This injects a harmful moral ingredient to the concept of merit, in that wealth is therefore perceived as divine reward. This implies that those without wealth are personally responsible and punished by divinity due to some moral shortcoming, as opposed to powerful, systemic outside forces of socioeconomic oppression.
Look the other way
The meritocracy certainly doesn’t seem to apply to venture capitalists. Their investments fail 98% of the time, yet they still have jobs. It’s actually a fluke when these guys are successful, and they continually prove that they have no clue what they’re actually doing. Yet, they habitually waste gobs of money making mediocre founders and startups filthy rich as purely a byproduct of shoring up their own elitism, only to watch these same founders and startups flameout soon thereafter. Then, they shrug as common hard working folk are left holding the bag and the vicious cycle repeats itself. So, where’s the merit on either side of this equation? Someone, please point to it.
Oh right, that’s because those at the top of the heap are deeply invested in the conviction that they’re deserving of their place, lest they be forced to self-reflect and reckon with the ugly truth: they aren’t more intelligent or talented than any others, they just happened to have the necessary social capital to propel themselves forward. That’s a tough realization for the person who believes solely in hard work, talent and perseverance. Shit, I know it was for me.
Merit is inherently flawed
Hard work and ability are the core tenets of meritocracy, but fail to address key questions. How is hard work measured? Is it energy expended? Well, is that energy mental or physical? Or is hard work measured in production output? There’s no way Jeff Bezos works harder than a coal miner, yet their compensation is vastly different and one’s life is always at risk. Arguments in favor of meritocracy neglect to take into account that it would take the average American over 21,000 years of saving every penny to accumulate $1 billion. From where I’m sitting, the correlation between effort and wealth seems to be non-existent.
In addition to being unable to quantify ‘hard work’, meritocracy sidesteps innovative thinking. Since most companies hire candidates based on their past work performance, this ignores the value they can truly offer in the future. Hiring while staring in the rearview mirror of what you’ve done, not what you’re capable of, is the antithesis of the ‘move fast and break things’ thinking — which is exactly what these companies pride themselves on and boast about!
Scratch the surface of self-made
Wells Fargo CEO Charlie Scharf personifies the intersection of meritocracy and self-made.
First off, take note of his own start in finance:
Charlie’s social capital secured him a coveted spot — arguably at the expense of a more qualified candidate — where he began his ascent in finance and recently felt comfortable publicly expressing his assertion that there isn’t enough Black talent to hire. Quite a revealing stance for someone who relied on nepotism for his own launching pad. Sorry Charlie. While there is no such thing as a ‘free lunch’, people like me don’t usually have the connections to sit in the executive cafeteria and there certainly were no Wall Street Bounds when I was growing up…wish there were.
Compare Charlie’s silky smooth entry into a finance career with Oprah Winfrey’s well-documented humble beginnings and onslaught of obstacles she faced to gain and secure a career in media. There’s an ocean of difference between them. Ever notice that there aren’t many Oprah’s, but plenty of Charlie’s in powerful positions across all industries? It’s because being legitimately self-made is freaking tough to pull off, unlike when the velvet rope is gently lifted and you’re whisked inside to have the ‘self-made’ label pinned to your shirt.
The impact of unchallenged success
The startup and business world has long been funded and shaped by folks with the right connections and money, not merit. When the door only gets opened due to homogeneity, there are destructive, real-world repercussions, like technology with racial bias baked in. It’s naive and damaging for our culture to reinforce and sustain the myth of meritocracy because it dishonestly benefits the few at the expense of the many. We aren’t really getting the best startups, just a VC’s narrow perception of such, along with the folks with enough family money to help them glide over the Valley of Death and beyond. Then they have the audacity to turn around and give countless interviews about how they started from nothing and anyone can achieve success mimicking theirs, if only they hustled harder. This is where the moral slant of meritocracy invokes culpability to subsequently cast judgement and deny basic rights and it’s pretty icky. The entire business landscape suffers when this pattern remains unexamined.
I firmly believe myself to be a hard worker, talented with the tenacity to persevere, but when social capital accounts for more than three quarters of the business world’s hiring and startup funding activity, it’s time for our culture to drop all delusions of meritocracy. This is not lending support to mediocrity, but rather my own acknowledgment of how meritocracy is dishonest and harmful, preventing the necessary changes that would improve the business world for the better. Acknowledging and challenging the utter hypocrisy of so-called “self-made” individuals, who have been bolstered by social capital, is a necessary step in breaking the dangerous and oppressive illusion of a meritocratic society. Only then will the American Dream truly become attainable by anyone, not just the next milquetoast founder adorned in nepotism.
Social Capital: The Powerful Yet Invisible Currency that Maintains the Status Quo
“Oh, I know someone hiring, I’ll connect you.”