The American Left has decided that the so-called meritocracy is a bad thing. In a typical example from the Los Angeles Times this week, Nicholas Goldberg points to a number of issues exploring how merit is not actually the key to power and riches in America:

The United States is supposed to be a meritocracy. The story goes that if you work hard and play by the rules, especially with regard to education, you can compete, rise and succeed here. . . . But Americans are realizing that’s not always the case. The playing field just isn’t level.

Goldberg claims that the much-lauded meritocracy is less about merit and more about controlling access to elite institutions. It’s hard to argue with some of this. It’s easy to see the lie behind the claims of meritocracy when we look to the very top of the artificial hierarchy. It’s likely not a mere coincidence people like George W. Bush and Al Gore—a son of a US president and a son of a US senator, respectively—went to elite Ivy League schools. All of Al Gore’s four children, and one of Bush’s, went to Harvard. To think that these seven people got into these schools because they had more “merit” than all the rejected applicants requires gargantuan levels of credulousness.

Much of the Left’s rhetoric against the meritocracy has been in the service of justifying racial preferences and standardized testing in university admissions. Defenders of the status quo have subsequently fallen all over themselves to support the supposed meritocracy of the government-university complex. For example, Victor Davis Hansen, in a meandering and unconvincing article, recently attempted to blame the United States’ repeated foreign policy failures on an alleged decline of meritocracy. Meanwhile, Alan Dershowitz insists that today’s law schools are full of mediocrities—unlike when he and his friends filled elite universities with untrammeled brilliance.

Note that these examples from Hansen, Goldberg, and Dershowitz have nothing to do with the true meritocracy of the marketplace that made America a prosperous place where ordinary people could make comfortable lives for themselves. Rather, the pundits tend to focus on the fake meritocracy, which is all about government and quasi-government institutions: standardized tests, elite universities controlled by the ruling class, and what amounts to government-controlled professional licensing. In these cases, what constitutes merit is defined by technocrats. Most of what we now consider to be the official meritocracy was developed and popularized by the regime’s social reformers of the Progressive Era in the early twentieth century.

The Only Real Meritocracy Is the Market Meritocracy

The real meritocracy is something else entirely. The real meritocracy exists only in the marketplace, where there is no objective ideal of merit at all. Rather, in the marketplace, merit is determined by the extent to which a person provides value according to the subjective values of market actors. The value—i.e., “merit”—of a worker, an entrepreneur, or a business enterprise is determined by the client. Did an entrepreneur deliver a valued good or service? If so, he will be rewarded with both revenue and a good reputation. Did an attorney provide valued services to clients and defendants? If so, he or she will be richly rewarded in the marketplace. If markets were actually allowed to function in the areas of medicine, we’d find a similar relationship there between “merit” and value delivered to others. Those with the most merit are the most successful in the marketplace. But it’s the consuming public that determines what constitutes merit. In other words, true “merit”—which should be regarded as just another word for “market value”—is not at all determined by the ideals of government technocrats and their allies in academia.

Where Standardized Tests Come From

One prominent example of the reach of the official meritocracy is the bar exam. In a 2015 article, free-market advocate (and law professor) Allen Mendenhall pointed out that the exam is not really about merit, but is

a form of occupational licensure that restricts access to a particular vocation and reduces market competition.”. . . The bar exam tests the ability to take tests, not the ability to practice law. The best way to learn the legal profession is through tried experience and practical training, which, under our current system, are delayed for years, first by the requirement that would-be lawyers graduate from accredited law schools and second by the bar exam and its accompanying exam for professional fitness.

Before the rise of official meritocracy, practitioners of law entered the profession through several paths, only one of which required law school. The marketplace was the ultimate referee in whether or not a lawyer added value. Similarly flexible standards characterized many fields, from barbering to medical schools. Over time, however, various professional cartels managed to convince governments to tightly control access to a variety of professions. New “objective” measures—which weren’t objective at all, but determined by government bureaucrats—were imposed on the public.

The bureaucrats themselves introduced an alleged meritocracy to protect their own jobs. In 1883, Congress passed the Pendleton Civil Service Reform Act. This imposed mandatory standardized testing for potential government employees in return for job security provisions under which federal workers could not be terminated for political reasons. This replaced the old “spoils system” in which the federal bureaucracy was tied to public accountability through elections. The Pendleton reform has long been sold as a change that “professionalized” the federal bureaucracy. Murray Rothbard, however, saw through this ruse and noted that the supposed meritocracy created a new permanent government class “insulated” from the public: “With the advent of Civil Service reform, the once temporary set of bureaucrats are now converted into a permanent and self-conscious class or caste, set aside from, and in fundamental opposition to, the mass of the citizenry.”

We’re told this all made bureaucrats perform “better.” Yet there is no objective measure for “bureaucratic performance” other than the arbitrary goals and protocols set out by politicians. The only undeniable result of the bureaucratic meritocracy is that it helps federal policy makers cripple public skepticism and political opposition to federal agents, thus paving the way for immense growth in federal employment and spending.

Testing Spreads to the General Public

By the early twentieth century, social reformers wanted to spread the meritocracy to the entire population. Government planners saw the potential of testing as a means of helping them plan society and the economy. This eventually came in the guise of standardized testing for all students and its related phenomenon, the IQ test.

The idea itself was not new. Like so many other innovations in freedom-destroying bureaucratization and political centralization, this idea came from Prussia:

In the mid-1800s, Boston school reformers Horace Mann and Samuel Gridley Howe, modeling their efforts on the centralized Prussian school system, introduced standardized testing to Boston schools. The new tests were devised to provide a “single standard by which to judge and compare the output of each school” and to gather objective information about teaching quality.

However, through the end of the nineteenth century, implementation remained haphazard. The US’s education system was very decentralized, and many school districts simply chose not to participate. Nonetheless, standardized testing was gaining ground in tandem with the new field known as psychology.

Adoption of standardized testing—like so many other trends in American society geared toward government planning—was accelerated by the First World War. With the war came a military draft on a scale that far surpassed any previous conscription efforts. This new draft turned millions of Americans into government employees, and governments sought ways to more “efficiently” manage them:

WWI provided the setting for the first large-scale application of psychology. The United States and the other countries on both sides faced the daunting task of processing millions of people to serve as soldiers. U.S. President Woodrow Wilson called upon psychologists to help in this endeavor and in May 1917, his administration formed the Psychological Examination of Recruits Committee consisting of the top people in psychological research on individual differences. . . . Within two months, they had constructed a written paper-and-pencil test, the Army Alpha test, to assess recruits.

Thus began the age of mass standardized testing. This paved the way for the application of mass testing in many other areas as well:

By the end of WWI, over two million army recruits had taken the [tests]. . . . these were the first practical tests administered to large groups of people. Within two decades of the development of the Army Alpha, cognitive ability testing became a major tool used in hiring and college admissions decisions.

Federal planners were also happy to work with psychologists to develop what have come to be known as IQ tests. These tests were first developed by French psychologist Alfred Binet. In 1904, the French state—long a world leader in political centralization and mandatory state schooling—asked Binet to help the Ministry of Education evaluate students. The “promise” of Binet’s invention was immediately seen by government planners elsewhere.

Binet’s methods were expanded during the war. Standardized tests thus became a new category of government data, along the lines of household income data, employment data, and gross domestic product data. And like all data collection schemes, it became a tool for government planning.

Enter Eugenicist Central Planners

The most notorious of the Progressive central planners who gravitated toward these tests were the eugenicists. Naturally, the new age of cognitive testing allowed the government to justify any number of new government plans to manage populations and government resources. One of the most prominent eugenicists was Lewis Terman, a psychologist who developed his own IQ test in 1916. The test

defined intelligence in purely quantitative terms and was used to justify the forced sterilization of minority groups in the United States. . . . Carl Brigham, a Princeton psychologist and fellow member of the American Eugenics Society, built on Terman’s work to develop the SAT [based heavily on the Army Alpha Test] with the College Board in 1926. The test became a ubiquitous tool in college admissions by the end of World War II.

A Key Tool in Federal-Corporate-Academic Partnerships

It is no accident that talk of the “meritocracy” tends to revolve around institutions that are tightly regulated by government agencies and enjoy close partnerships with the federal government. Major universities, heavily dependent on federal grants, have long worked with governments hand in hand to enforce the whims of powerful industrial interest groups and cartels. The public funding of higher education helps private industry transfer the costs of training and screening to taxpayers. Moreover, universities have long helped ensure that countless students have “correct” ideological views, in line with those of the regime. It is exactly the sort of outcome we should expect from schemes developed by and for reformers of the Progressive Era. This fact should also help us realize that the modern Left doesn’t really have a problem with the meritocracy overall. The Left merely wishes to control the meritocracy implemented by their ideological forebears so as to produce a different mix of “elites.” This plan is nothing more than a tweaking of the established system of “merit.”

On the other hand, if we really want to find the people who are the most productive, the most skilled, and the most beneficial to our daily lives, we must look far beyond the official meritocracy, which only tells us how well people have performed according to the regime’s standards. We must look to market competition instead.