September 9, 2012

Understanding Opportunity

In a recent post I did some thinking about opportunity and how we tend to confuse opportunity for one person with opportunity for everyone, overlooking the way systemic effects may overpower individual effects. This post looks more into the nature of opportunity itself; it is less about power and systems and games and more about what opportunity means to us and how it functions in our lives and political ideas.

Merriam-Webster defines opportunity as "a good chance for advancement or progress", but this definition does a poor job of capturing the word's political-economic implications. When we talk about opportunity, I would argue instead that we are talking about "the ability to succeed." But beyond this broad definition there is not a lot of agreement between different political persuasions.

There are several questions that can help us figure out what we are talking about when we talk about opportunity and "the ability to succeed." I start off asking, what is success and who do we see as successful people? Then I explore how likely we are to succeed. Finally, I examine what it takes to get there: how is success achieved? And how do we enourage it as a society?

What is success?

Success is a complex concept, but we can think of it terms of a number of handy ethe (I had to look that plural up): I'll call them White Picket Fence, Zuckerberg, Horatio, and Beating the Joneses. These ideas of success are from a purely economic standpoint; there are other, critically important factors that I do not consider here at all.

White Picket Fence is the idea that everyone who works hard is entitled to a decent middle class life. It's a common formulation of The American Dream. Success here is defined as reaching an acceptable median standard of income and achieving an acceptable quality of life. Part of the idea is that it's available to anyone and everyone--it's your door prize for being American, working hard, and playing by the rules.

Zuckerberg is the idea that you can not just succeed but... succeed. That you can blow everything else out of the water, because nothing is holding you back. The key to the Zuckerberg conception of success is that there are no limits, and that individuals are free to compete and to win, in ways that have never been known before, because it's better for society if they do. Not everyone will succeed, but that's ok--either because the winning ends up benefiting others (e.g. through new inventions) or the chance of being astronomically rich provides a crucial incentive for everyone.

Horatio is the idea that succeeding means doing better than your parents or your current situation. It's most closely aligned with the dictionary definition of opportunity--the idea of improvement and advancement. It measures your success relative to your past success--how you have advanced over time. It also has the most to do with the idea of a meritocracy, which will be discussed more below.

Beating the Joneses is the idea success means doing better than other people. It defines success as being above average, it's it's a relative measure it depends more than anything on the success of everyone around you. Of these models of success, it's at once the most social, small-minded, and maybe the most realistic in terms of what really motivates us. It may have implicit meritocratic assumptions ("I drive a bigger car because I'm smarter and do a better job at work.") or it may not ("I drive a bigger car because my parents were rich.").

While these visions of success are limited to economics (meaning they are only concerned with money and "stuff") they are nevertheless revealing. They can get us started thinking about what our goals are for our society. When we argue that having a large middle class is good for a country, we are arguing for the White Picket Fence idea of success. When we argue that tax rates on the rich are too high, we are arguing in favor the Zuckerberg idea. When we support first-generation college student subsidies, we support Horatio.

There are countless policies, laws, and economic forces that help shape what kind of vision of success is ultimately realized, and for whom. On an individual level, we can think of these things as affecting our chances of success.

How likely are we to succeed?

We often think of opportunity, and whether it exists in a society, in a sort of binary mindset: either on or off, nothing in between. Either you can lift yourself up by your bootstraps or you can't. Either you can get rich or you can't. Either a black man can go to Harvard and become President of the United States or he can't. The ability to do something is an important concern. But it can be a gross oversimplification.

Success is much better understood as a probability. It makes a big difference whether your probability of success is 10% or 100%, whether your chance of getting a job is 3% or 30%, or your chance of getting into a top school is 5% or 50%. If it is 50%, you are competing in with one other person; if it's 5% you are competing with 19. Do we want to live in a country where one person gets to be rich, one person gets to be middle class, and the other 8 people are poor?

As I wrote about in my recent post, we cannot ignore the structural aspects of success. School is a good example because there are clearly a limited set of outcomes (admittance) that qualify as a certain level of success (to a top school). It is important that anyone in the USA can go to a top school, but it is probably more important that everyone in the USA cannot go. If you dismiss the aggregate aspect, you miss out on a critical determinant of what success is and what it means for a society. Thinking of success in terms of probability can help us see those systemic effects in individual terms--it helps us see some of the implicit difference between Zuckerberg and White Picket Fence, for example.

Of course, the probability of success is not the same for everyone, and we need to better understand which aspects of success are structural and which are individually based. While there may be a limited number of admittance slots, some students are clearly more likely than others to get into the most prestigious schools. Some people are clearly more qualified for certain jobs. Merit and ability and a million other factors also play a role in success. But how much and in what way?

What does it take to get there?

The idea of success implies an attempt, an achievement arrived at through some means or another. You do not just wake up one morning and find yourself successful--it has identifiable causes.

One of those causes is luck, of course, but other causes of success are more determinate. You might be a brilliant, risk-taking entrepreneur and design something very useful that everyone wants, and in exchange they might give you enough of their money for you to be successful. You might study hard and work hard and provide a good deal of value for your employer. You might have a well-to-do family that made sure you did your homework and had tutors and got into the best college and got you in the door for an interview at a prestigious firm.

Opportunity as conceived of today in America is intimately connected to the idea of merit. The idea of a meritocracy, though originally intended as a distopian satire, has caught on as a sincere ideal precisely because it is a good thing when capable, motivated people can succeed in a society. Otherwise, why would anybody care about being motivated or capable? Although few people would probably turn down a winning lottery ticket, the visions of success listed above turn on deserved reward, not arbitrary benefit. This is a good thing, and I think it is much better than holding comparatively undeserved respect for an aristocracy.

But Young's original critique of the idea of meritocracy (previous link) still stands. Young argued that we could end up with a solidified ruling class built on arbitrary definitions of merit that are hardly fairer than divine right: a new aristocracy based on whose kids went to the best prep schools, or based on whose kids did not grow up raised by absentee fathers and gangs on the street corner.

Young argues (as I understand from his article; I haven't read Rise of the Meritocracy) that we need to have a broad, accessible vision of success. That even if we can conceive of a completely fair selection process for success, it is dangerously possible to have outcomes of such a system that are anything but fair. If we have an economy where everyone takes a test and the top 10% of people get great jobs and the other 90% of people end up working work fast food, fairness does not get us very far. We would have built a system that fails to incentivize the majority of people.

You may counter that fairness be damned, society still needs some kind of selection process. We would not watch much pro basketball if NBA teams were required to give anybody who tried out a spot on their starting lineup. We prefer our leaders to be competent and hardworking and our scientists to have a clue. We can't just give jobs to whoever wants them--many of them require smart, capable people.

Of course we need a selection process. But the current process is problematic it is in many ways not set up to incentivize people for absolute success--and absolute success is what matters more for society. Businesses want people with certain definable skills, not just someone who is better than somebody else. We want leaders with integrity and competence, not simply a leader who is not as bad as some other guy. Relative comparisons do matter, but not nearly as much. Selection can be fair without it doing a good job of incentivizing real achievement, because our chances are based on relative criteria: if I know I have to be the best to succeed, I might be less motivated than if I instead have to have a high level of competence.

Looking at society more broadly, it seems to make sense to structure an economic system so that individual success is achieved by the creation of public value both now and in the future. This is the whole idea behind the invisible hand. However, a given individual's relative success matters little to the society as a whole--the absolute level of success, as measured by education and skill and competence and motivation is far more important. If we want to have an economic system with opportunity, we need individual freedom and meritocratic individual incentives, but we also need a system that rewards people for absolute performance and achievement and not only relative achievement.

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