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Notes -
The Virtue Theory of Money
Recently, Freddie deBoer published an essay called "What Would a Functioning System of Equal Opportunity Look Like for the Losers" complaining about how unfair "equality of opportunity" is. The main point is that since talent is partially heritable, if we reward people based on their abilities then people who have been unlucky in the genetic lottery will be left worse off. It's a little hard to tell exactly what way of distributing resources Freddie would prefer instead, but he seems to have the opinion that it is unjust for luck to play a significant role. In Freddie's words: "it’s hard to see how rewarding talent falls under a rubric of distributing resources to people based on that which they can control."
I think Freddie's essay is a good example of a misunderstanding about the benefits of equality of opportunity—a misunderstanding I've come to think of as the Virtue Theory of Money. Basically, this is my name for the belief that the main purpose of money is to reward people for being good.
In my experience, many people seem to have some sort of implicit belief that people should be rewarded by society according to how virtuous they are. This takes different forms: some people emphasize hard-work, conscientiousness and so on. Others emphasize the difficulty or social value of the job that someone is doing. For example, some people argue that affirmitive action is bad because it prevents talented, hardworking people from getting the jobs/university spots that they deserve. As another example, some people argue that teachers should be paid more because of how important their jobs are. The labor theory of value also seems to be partially motivated by this idea.
Read in this light, Freddie is basically complaining that talent is not a virtue and so we should not reward people for being talented. (He also seems to believe that the reason talent is not a virtue is because it is influenced by genetics, which is outside our control. I find that idea somewhat incoherent—all sorts of other apparent virtues like generosity or open-mindedness are also influenced by genetics, but that's irrelevant to my main point.)
However, I think this idea is almost totally wrong. In my view, the main reason to reward some people more than others is if doing so leads to better social outcomes. The point is not to provide personal benefit to the people rewarded but to incentivize behavior that benefits the entire society.
As an example, I believe that the best argument against affirmitive action is not that it personally hurts the individual people denied positions because of it (though I do feel sympathy for them) but because it deprives society of having the most capable people in the most important jobs. The reason that we want to select the most talented people to become doctors is because it's good to have good doctors not because being a doctor is a nice reward for being a top student. Likewise, the best argument for paying teachers more is if doing so would lead to better educational outcomes of enough magnitude to be worth the extra cost. I agree that plenty of teachers (though far from all) are nice, hard-working people who do a demanding job. But again, a job is not supposed to be a reward for being a good person, it's supposed to be a way to get something useful done.
I also think this is a serious issue. Basing hiring decisions and salaries on how virtuous people seem can cause resources to be poorly allocated in a way that hurts everybody. If we followed the Virtue Theory of Money then too many people would want to be teachers (it's already a popular job even without a major salary boost) and not enough would want to be middle managers or accountants. We would have worse doctors, engineers and scientists.
So my main response to Freddie complaining about "equality of opportunity" leading to talented people being rewarded more is: that's exactly the point! We want talented people to be incentivized to apply their talents instead of doing some routine job that almost anyone else can do. Stop trying to use the virtue theory of money and think about the long-term conseuqences of policy decisions.
Now, I do want to add a couple caveats to this. First, I think it's bad to let people suffer a lot when society has sufficient resources to help them. So I think it's reasonable for the government to give some help to people who don't have the ability to get high quality jobs. But I think we should be aware that the government is only able to do this because of how rich our society is and that this wealth depends on incentivizing talented people to use their talents. Second, I do think that there is some value in rewarding people purely for their virtue. I want to live in a society of virtuous people and so I would like virtue to be incentivized even if the economic benefits are not always easy to measure. However, I think this should usually be a secondary concern.
What is the case against meritocracy?
One has to separate ‘primordial’ meritocracy from the structured, deliberate, extreme meritocracy that exists in the modern west.
It has always been true, under every socioeconomic system man has ever devised, that smart young people have worked their way up the ladder. Historic royal courts (say those of the Tudors in England) often had a surprising number of people of low birth (at least in the second generation) who had worked their way to some kind of power. It was possible and even common for fortunes to radically shift for a family in a single generation. In a few decades families of no historical presence (who had maybe been peasants, then small time landholders, then gotten involved in regional politics) made it to court, to the king or queen’s ear. The current American system of deliberate meritocracy, open job applications, slander against ‘legacy’ applicants, criticism of “nepo babies”, the surging of second generation immigrants into the establishment at rates unseen even in the early 20th century is what is comparatively new. The worship of meritocracy, in other words.
Modern American meritocracy is bad because I see no reason why the child of two Brahmins deserves vastly more wealth and power than the child of two average Mayflower descendants just because the former is “more intelligent”. Though I have a reputation as something of a Jewish chauvinist on this board, I actually sympathize with the Ivy League admissions committees of the 1920s that capped us at 10% or 20% of a student population. Simple IQ is not enough to justify your rule. Tell a Hausa or Fulani or Yoruba that the Igbo deserve to rule Nigeria because they’re smarter and richer and they have every right to laugh you out of the room. Mere intelligence does not by default grant you the right to power over other men.
Meritocracy breeds the most extreme, most perverse form of entitlement. The entitlement that having a big boy IQ means you are owed a significantly greater money-making capacity (and thus comfort, power and prestige) by society than someone of more modest intelligence. I reject this notion. Perhaps it is particularly intelligent people who themselves owe a duty to society. I recall a comment by a regular user on a previous account (possibly @Esperanza) about how, growing up in Ireland in the 1980s, almost the entire graduating class (in engineering at the country’s most prestigious university) left for the United States, for fortune. What could Ireland have become had they decided to stay, to force change, to build things at home even if it was hard, to serve instead of to seek to merely enrich themselves, again and again?
I am relatively intelligent. But I despise the vanity of IQ meritocracy, the narcissism of it, the dweeb superman, the programmer ubermensch who believes not only that the arbitrariness of fate entitles him to rule (this is true, obviously, of any system), but that he owes nobody for it. Silicon Valley, America’s IQ meritocracy headquarters, is so devoid of duty, of nobility, that it has allowed San Francisco to collapse into shithole status. All the tech men can do is either defend it, whine without doing anything or flee to Texas, which is arguably even more pathetic. Bill Gates’ only noblesse oblige is funding third world mosquito nets and attempting to design a better toilet for India, his philanthropic service to his own people is limited or nonexistent.
I have found in my life that ‘strivers’ of humble birth often have pathological character flaws that make them extremely dangerous. These include mild sociopathy, lack of gratitude, poor etiquette and manners, rudeness, a belief that their success is entirely their own doing, deep-seated jealousy of those they perceive as doing better, and immense, insatiable greed. Often, they do not even particularly enjoy life, they just try to min-max it, like a video game theory-crafter. They seek power and so ought, quite rationally, to be denied it or at least to be handed it very, very slowly.
Obviously baseline intelligence in positions of power is necessary for the successful functioning of society. But how much? Must they be the most intelligent people from all the land, or can they merely be quite intelligent people who also have other things about them that should be valued in a ruling class?
San Francisco is not in Silicon Valley. It has a smaller population than San Jose, and Santa Clara County has a larger population than SF and San Mateo counties combined. SF and San Jose are further apart than DC and Baltimore.
The idea that super woke SF is somehow driven by IQ meritocracy seems very odd.
Leaving aside the fact that taking Gates to task for spending on inexpensive but highly effective interventions does not seem to be very trenchant criticism, the Gates Foundation is rather famous for its efforts to reform US K-12 education, esp re small schools, and programs like the Gates Millennium Scholarships.
Moreover, why should we assume that Gates is representative of "programmer ubermenches"? The Chan Zuckerberg Foundation seems to spend most of its money in the US, and though it is hard to tell geographically where much of the Google Foundation's spending goes, much clearly goes to US recipients.
Silicon Valley is a suburb of San Francisco. The ‘Bay Area’ is the San Francisco Metropolitan Area. This is what city means everywhere, including the US, regardless of the name of the local municipality (eg. Beverly Hills and Santa Monica are obviously part of Los Angeles). That San Jose
San Francisco is the oldest and most important major city on the West Coast. If you live in San Jose and are not a 10th generation native or Mexican-American, you are there because of an agglomeration of wealth that San Francisco begat. San Francisco is also the cultural center of Silicon Valley, the financial center of Silicon Valley, the tourism and visitor center of Silicon Valley etc etc etc. And of course many ‘Silicon Valley’ companies do indeed have their headquarters or significant office space downtown, or at least did until recently.
So yes, Silicon Valley does have responsibility for San Francisco. When some game developer or software engineer or whatever attends a conference at the Moscone Center, in the center of the capital of Silicon Valley/the ‘Bay Area’, and they find it a shithole surrounded by disgusting psychotic homeless people shitting and taking drugs on the street, that is their impression of Silicon Valley. That Palo Alto suburban streets where a 3 bedroom picket fence house costs $5m are ‘fine’ isn’t really relevant.
As for the laughable assertion made by some tech people that they have no power over San Francisco because it’s under the thumb of wokes, San Francisco is and has long been one of the most corrupt cities in America. Silicon Valley tech people have (collectively) trillions upon trillions of dollars of capital, more than any other upper class anywhere else in the world. They could grease the palms needed to save the city if they wanted to, progressive city councilors are hardly incorruptible.
This is geographically false. Silicon Valley is in South Bay. If Silicon Valley is a suburb of anything, it's a suburb of San Jose. Mountain View, Palo Alto, and Cupertino are all in the San Jose - Sunnyvale - Santa Clara MSA. Sand Hill Road runs right near the MSA border.
San Francisco gets more press because San Jose isn't an interesting city. But it's much more connected to Silicon Valley than SF.
But this is kind of the point. San Jose is in many ways a bedroom community for Silicon Valley and the wider surrounding suburbs. It has a downtown in the way that, say, Indianapolis has a downtown, a few towers surrounded by parking lots. San Francisco, even today, is (much) more important to state politics, even though San Jose was once the state capital, many of the state's most significant political figures, incuding the current governor, came through San Francisco. San Francisco is the cultural home of the tech elite who live in the Bay Area, it's home to more michelin starred restaurants, sports arenas, better hotels, international conferences, the most expensive urban real estate in the region (I don't even think San Jose has an affluent downtown neighborhood of detached houses like Pac Heights in SF), more good private schools, more in the way of galleries, theaters, orchestras, opera and cultural venues and so on. Nobody outside America has even heard of San Jose, such that people who live there would generally say they live in San Francisco or the [San Francisco] Bay Area. Minus the largely white and east asian bedroom community (much of which is in tech) who technically live within the city's boundaries, San Jose is a largely Hispanic and Vietnamese city with almost zero cultural or social significance to the wider state or even country. Wikipedia even makes clear that the 'Bay Area' is officially short for the San Francisco Bay Area, because every substantial settlement in it was built (or largely expanded) around San Francisco's role as the capital of 'The West' since the early/mid-19th century.
So I think it's relatively fair to describe Silicon Valley as part of San Francisco's wider metropolitan area, in colloquial terms.
San Francisco is not, fundamentally, important because of its Michelin stars, ballets, operas, media, literary artifacts, or galleries. It's certainly the best you'll get within 300 miles, but if those things are what you're looking for, you certainly know cities that crush it on all counts. (In state and federal politics it indeed plays a massively outsize role.) No one flies out to San Francisco to see Lohengrin.
What makes the Bay Area Important is tech and capital; without it, San Francisco would be Portland-level in terms of influence. And for tech, until very recently, the epicenter was in Silicon Valley, which is a bit amorphous but I'd call the geography spanning from roughly Stanford on down. Apple, Cupertino. Oracle, Redwood City (some would object this counts, too far north). Cisco, San Jose. Adobe, San Jose. Sun, Santa Clara. Intel, Santa Clara. HP, Palo Alto. Netscape, Mountain View. Yahoo, Sunnyvale. Later on, Google in Mountain View and Facebook in Menlo Park (another relatively northern outpost). Also, pretty much every VC of note has their offices within a mile or so of each other on SHR: it wasn't as if it was San Francisco airdropping money onto nerdy engineers down south. And most of the tech elite live near where they work: Meg Whitman Atherton, Zuck Palo Alto (albeit after a stint across the street from Mission Dolores), Sundar Los Altos Hills. Pac Heights has more names like Getty or Hellman than tech CEOs. Even in terms of schools, the best private school in SF doesn't really hold a candle in prestige compared to those in the South Bay (Harker, Castilleja, even some public schools like Paly or Gunn).
This provided the initial capital and technical skills that underlie San Francisco's nascent technical ecosystem, which only really started in earnest in the late 2000s. SF has a couple of important, successful companies based there (Salesforce, Uber, Twitter, etc.), but the giants only keep relatively small outposts in the city. And, of course, OpenAI and Anthropic are based there, along with a respectable percentage of Google's ML researchers (though most are still expected to take a shuttle down south to MTV three days per week), but it remains to be seen how that will develop.
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