Since the Great Recession, the Fed has transformed itself into an entity more and more responsible for asset prices. This was the stated goal since 2009 as the Fed adopted a new philosophy called the "Wealth Effect." The thinking behind it was simple: growth in asset prices would translate to an increase in consumer spending and hence demand itself. It was a 'trickle down' economic philosophy an increasingly financialized economy.
This backdrop has defined our post-2009 era which stirred certain pathologies that were reflected in the greater culture and politics. It was the time when 'finance became a culture' and actual-productivity plummeted across most developed economies, especially the United States. But somehow in spite of the accumulating dysfunction across most key areas, everything kept trudging along, partly thanks to investors being satiated with record returns.
While the near-zero interest rate regime may now be ending, it is worth considering how much of the water we were all swimming in excused poor state capacity, distorted economic fundamentals, and how it even kept a lid on the dysfunction potentially blowing up in our faces. Now that we have to reckon with these realities, it may be wise to ask how many worldviews were simply products of the the cheap money regime - which is now, in a shock to many, coming to a close. Whether or not it will easily be let go, however, is another matter.
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Notes -
It’s worth noting that this is, historically, the norm- producing value, or doing important logistical tasks for getting that value to people, has always been low status with brief exceptions. Roman senators were limited on how much shipping capacity they could own, and even wealthy and important blacksmiths and millers and dyers and fullers were socially seen as more like peasants. Owning production centers was deeply low status and important people would invest in them through proxies- respectable money came from things like war, inheritance(including inheritance of farmland, as long as you didn’t work the land yourself), and government service. And most of these societies saw merchants or transportation professionals as intrinsically immoral parasites.
It just seems like distrust of meritocracy is a cultural universal at the end of the day, that a precious few societies(hanseatic league, 19th/20th century Anglo sphere, holland at certain times) manage to evade for a few decades every once in a while, and otherwise producing tangible value is inherently lower in status.
That seems like a very particular definition of meritocracy to me. Care to explain?
Sure. The historical norm is that earning your wealth is low status. High status people don’t need to earn any wealth or power; it’s owed to them for being them. The exceptions are almost all within-Hajnal European societies with heavy mercantile wealth; prototypically the hanseatic league was almost fantastically meritocratic, if corrupt, where full citizenship, guild membership, and political power were all theoretically earned, and making money(as opposed to just having it, or having it accrue to you) is high status and a ticket to influence. This is far from the historical norm; viewing people who earn money, or military commands, or whatever as distinctly second class is how most societies view things. The proper and morally correct way to have money in Ancient Rome and most of medieval Europe was to inherit it or have it be owed to you; in practice the noblemen and senators did things that were useful because they had to do something, but their economic roles contributed nothing of value whatsoever, except perhaps freeing them up to be governors and generals.
I mean, I know that historical context. What I meant was how this is meant by meritocracy when the major thing being valued is “person is doing thing”, rather than “person does thing well”. Seems to me more a necessary precondition than the thing itself.
In any case, I don’t think it necessarily holds that “distrust of meritocracy is a cultural universal” holds so strongly. Imperial China famously had a civil service that mostly drew from degree holders who took written examinations (of a particular sort, granted) for some 1.3 thousand years. This was often less meritocratic than it ideally should’ve been, because you could bribe examiners and construct some elaborate method to signal that it’s your paper, sometimes high officials would unfairly intervene for their own reputation or to aid their children, etc…but it’s very clearly an attempt at trying to separate people based on ability, and there were cases of peasants who managed to score well and gaining high posts in the government as a result.
In fact, the Europeans (and Brits in particular) were impressed enough that they copied it in the 19th century!
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A lot of that was due to war. The rich were heavily the soldier class and merchants just weren’t capable of projecting power and peace so they came after the rent seeking soldiers. Merchants couldn’t keep the Huns away.
It’s only modern times where merchants and their technology creating ability began to be able to win directly over land owning soldiers (Russia). Only since deeper industrialization and the ability to produce weapons became dominant that merchants became stronger than the soldier.
Feel to blame IT and supermarket. They abstract all of the supply chain away.
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