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This article first appeared in Forum, The Edge Malaysia Weekly on September 10, 2018 - September 16, 2018

Last month, I wrote an article entitled “The merits and demerits of meritocracy”, which argued that meritocracy, in its current state, worsens inequality over time. The logic is as follows: If there is a strong correlation between parental income and children’s outcomes, such as academic performance, internship attainment, strong social networks, healthier personal lifestyles, education levels and so on, then this concept of “meritocracy” is something that can be — in large part — inherited rather than earned over generations.

To be clear, I am not just talking about the Crazy Rich, the top 0.1% of people. The meritocracy of the past few decades has created a new class, which American philosopher Matthew Stewart calls the top 9.9% — “we’re a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, MBAs with opaque job titles, and assorted other professionals”.

The point is, therefore, captured as follows: Should our opportunities in life be determined by the circumstances of our birth, which is also known as the birth lottery? After all, no one chooses whether they were born a crazy rich Asian or a not-so-crazy middle-income American or a poor European and so on. As Elon Musk once, perhaps apocryphally, replied to a tweet by the MIT Technology Review — which said, “Ready for a world in which a US$50 DNA test can predict your odds of earning a PhD or forecast which toddler gets into a selective preschool?” — “You can do this already with a ZIP Code.”

That said, meritocracy matters. I am not advocating for an end to meritocracy. It is useful, optimal even, in certain circumstances. Neither do I believe that the socialist solution of equality of outcomes for all is the way to go — that has proved to be a disaster. Rather, my suggestion for the way forward in terms of resource allocation is towards a tempered meritocracy. In other words, meritocracy but with strong affirmative action.

Affirmative action sometimes gets a bad reputation, whether in Malaysia or in developed nations such as the US. The argument against affirmative action is typically put forward as follows: there should be no favouritism in resource allocation. Just as we should not favour the privileged group, we should also not favour the less privileged group.

This stylised argument is naïve; different groups have different present and historical circumstances. Yes, the execution of affirmative action may be flawed in that it operates at a group level rather than at an individual level. Whether the groups are white Americans or black Americans, or in Malaysia’s case, bumiputera or non-bumiputera, what affirmative action is trying to do is to give those who have been underprivileged historically a leg-up.

There is no denying that doing so richly benefited some individuals who did not need a leg-up but just happened to belong to the underprivileged group, and failed to benefit individuals who needed a leg-up but just happened to belong to the privileged group. The execution of affirmative action is, therefore, vulnerable to any other means-tested targeting programmes and must be refined as much as is practically possible and morally justifiable.

Therefore, to properly balance meritocracy with affirmative action to reduce intergenerational inequality, we should consider two concrete areas. The first is public scholarships. The idea is to broaden the scholarship net to capture more poor students. To this end, it may be worth considering scholarships that allow for lower — but strong (meritocracy is still important) — achievement thresholds for the lower-income group. It is, after all, more challenging for a poor student to achieve, say, 7As in SPM than it is for a rich student. Why not take that into account? We, therefore, allocate resources based on input costs as well, not just output.

On a more extreme level, we could even reserve undergraduate scholarships for low-income students, thereby opening the meritocracy gates to more low-income households. However, at PhD level — where students are researching potentially world-changing things, such as a cure for cancer or infinite clean energy resources — we can let pure meritocracy determine who receives the scholarships.

The second concrete area is public education. One way to smooth meritocracy over generations is to also implement affirmative action in school funding. For public schools in more affluent neighbourhoods, cut the funding and redistribute it to public schools in low-income neighbourhoods, especially those that manage to outperform their peer schools. This would send the message that performance still matters for public schools in low-income neighbourhoods, although these schools would be supported above and beyond those that happen to be in more affluent areas.

Another way to act via public schools is to create a new model of school for low-income neighbourhoods. Lebron James, the best basketball player in the world, has started a school in his hometown of Akron, Ohio, called I Promise, which caters for about 250 at-risk students in the area. A joint venture between James’ foundation and Akron Public Schools, it is designed to help at-risk children who are lagging behind in their studies and struggling at home, but with a twist. There is a strong focus as well on combating factors outside the classroom that cause these children to struggle.

“I think the missing link in public education is that family wraparound support. Because our students come to school and they’re worried about things at home … we want to create that safe, that secure and that caring and loving environment for our families and our students so that our kids can focus on education,” said principal Brandi Davis.

Accordingly, the school provides free transport within two miles of the school, free breakfast, lunch and snacks for the students, a food pantry for families who cannot afford food, as well as high school diploma qualifications and job placement services for parents. To escape dangerous neighbourhoods, all students receive a free bicycle and helmet. The idea is revolutionary — to create a school that caters to not just improving in-school outcomes for students but also out-of-school outcomes for their families, thereby recognising the systemic issue of poverty.

Solutions to maintain a strong sense of merit to resource allocation while also ensuring that meritocracy is more inclusive, especially to lower-income households, are just waiting to be found and implemented. The risk, should we fail to acknowledge the need for strong affirmative action, of carrying on with meritocracy as conceived at the present time, is ever-increasing inequality over generations.

Walter Scheidel, an Austrian historian at Stanford, argues that historically, inequality never dies peacefully and declines substantially only via warfare, revolutions, state collapse and plagues. Can we reverse the trend of history or are we doomed to repeat it?


Nicholas Khaw is an economist with the Khazanah Research and Investment Strategy Division

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