How High Our Elite Tax?

In the ancient world, invading armies were mostly men who, if they won, stayed and took over the top status slots in the new society. After a few generations, the locals would almost completely submit, and see invader descendants as the highest status elite members of “us”.

When invaders had distinctive looks, styles, etc. then those became marks of high status. People would seek such marks for they and their family, and try to associate with those who had such marks. To get people to support their ventures, they’d try to give them the appearance of elite support, via attracting elite members, investors, customers, suppliers, regulators, etc. As any substantial elite opposition could doom their ventures.

These elites would of course charge a price for their support, and such prices would add up to an elite tax on the society. The size of this tax would depend on how many such elites had to be “paid off” in this way to make anything happen, and how well suited were such elites for the roles they took on. In the limit of many available elites who were actually just directly the best people for their roles, this elite tax was zero. But the more that ventures had to pay off elites who were not otherwise the best for their roles, and have people do things in other than the best ways, in order to gain that crucial perception of elite support, the larger the tax.

Societies in history have varied in how they define status, and thus have varied in how much they waste in efforts to achieve status. When war was important, for example, societies that defined status in terms of military accomplishment had in essence a lower tax, and thus a competitive advantage over rivals. Today when innovation is important, then organizations where status is rewarded for promoting innovation can be at a similar advantage.

In academia, we often see similar effects on smaller scales. Particular fields are taken over by a mutual admiration insider’s club, and then everyone in that field must pay tribute to these insiders to get anything done. If you do not sufficiently praise, cite, fund, hire, etc. such insiders, you will be excluded from the field.

So how big a tax does our society pay for the perception of elite support? Much of status in our world is set via graduating from elite schools and being hired for elite jobs, and many say that we have a “meritocracy” in picking applicants to such positions only on the basis of directly relevant abilities. But of course we know this is only partially true.

As I’ve discussed before, in many areas today elites from around the world have merged into a single elite community which share common standards on who is elite and what criteria they use to decide status. As this world elite faces no competition from other worlds, our world is now more vulnerable to drifting status criteria; competition between societies won’t suppress wasteful criteria. For example, if elites everywhere measure status via years of pointless school, then the whole world could just keeping doing too much such school.

One interesting way to try to measure our elite tax is to look at events where the tax rose quickly and dramatically. Sometimes a particular field is low status, with people there paid accordingly, and then suddenly the field rises greatly income and status. At which point high status people enter and take over the highest status positions of that field. Such elite entrants tend to be young and lack experience in that field, and so tend to denigrate the old and experienced there. They push for generic elite practices that may not be the best for this area.

For example, tech used to be nerdy and lower status, and then made a lot of money and rose in status. Top school kids decided to take jobs in tech, especially right after investment banking jobs dried up after the 2008 crash. And so top school kids took over tech, putting a new extra premium on youth and top school degrees. Tech priorities and practices changed, including a lot more interest in woke politics.

Studies that compared the productivity, innovativeness, and social value produced by tech before and after this transition might give us valuable data on our elite tax. Similar studies might be done regarding other suddenly-prestigious areas before and after their status transition. Seems to me an important topic to study.