Capitalism Is Not Meritocracy

Deflating a Liberal Myth

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The story of 2024 was the victory of race-blind “meritocracy” over wokeness. This is, of course, a cynical ploy by the security state to squash the radical energy that has built up until Trump was allowed to be elected. The shift toward meritocracy is a gambit to deradicalize America, and these people don’t believe in it one bit.

But this doesn’t mean that nobody believes in it. Many do believe in it—the idea of a “level playing field” where each private individual is free to pursue his own happiness unencumbered by others, is right at the core of the American ethos. Most people in the West believe in it. This is why capitalism fits so well with Enlightenment ideology, and it’s why America—as the first nation founded explicitly on Enlightenment principles—is naturally a capitalist nation, despite the quasi-fascistic elements that were also present at its founding.¹

The myth of meritocracy still has great cultural potency today. And meritocracy is bound up most closely with capitalism, that economic system where each of us is maximally free to make of ourselves what we can. This is a superficial view of capitalism, which is not at all what it purports to be. Capitalism unroots us—it is the latest stage in a movement that is thousands of years old. In seeing this, we shall see how capitalism smuggles in its own values, while making invisible any other value than its own.

Capitalism means different things to different people. In a speech I gave to the Sydney Traditionalist Forum in October 2022, also available on this Substack[1][2], I laid out all the major critiques of capitalism that have been levelled at it both from the right and the left, old and new. I then went through each and sifted out the common thread that runs between them all. Each critique of capitalism—whether these critiques are secular or religious—points out in its own language how property is no longer sacred, how capitalism is the total decoupling of property from ultimate sources of imperatives.

This is powerful framing because we can see how supposed alternatives to capitalism—like communism—simply try to walk the situation back to some point along the road to capitalism, rather than to get off that road entirely. That said, these prior critiques of capitalism are, in their own way, on the right track.

Even Marxism has some valid critiques, albeit woefully incomplete. I spent many years debating socialists when I was a libertarian, and even back then I had to own that they were right on capitalism in one important way—capitalism is not a neutral framework. Capitalism is often held up by its defenders as axiomatic in its assumptions, such as in the praxeology of the Austrian school. Rather, capitalism is bounded by assumptions which are not themselves either provable or self-evident. They are simply assumed.

What are these assumptions? Among other things, capitalism assumes methodological individualism, the idea that individuals are the basic unit of analysis; it also assumes autonomy, where rational agents must be able to determine their own highest good; and taken together with the first assumption, it claims that even if some individuals are wrong about their own interests, the aggregate sum of autonomous individuals will produce the “greatest good for the greatest number”.

Neither of these assumptions are self-evident—for example, we could assume that the basic unit of analysis is groups, as folkishness does, and that morality requires heteronomy (that morality must come from outside the agent), as imperative ethics demands.² If you start from this alternative axiomatic framework, you arrive at very different conclusions than those of the Enlightenment framework. From this alternative framework, we conclude that what is good is what is good for the group, that what is good is not abstract or natural but determined by concrete authority, and that proper social organization consists in minimizing the exercise of individual conscience. Under this rubric, what counts as “merit” is radically different than under capitalist assumptions.

It is important to understand that capitalism stands upon a set of arbitrary assumptions, just like every other conceptual framework, and so what counts as “merit” is bounded by these assumptions. Capitalism attempts systematically to decouple itself from the sacred—we could say from ultimate imperatives. It is also committed to a quasi-deistic logos, where the rules themselves rule, where decision rests not in the embodied will of a man, but is deduced from abstract principle. Capitalism’s desacralization rejects the First Estate function—the jurist-priest—and its logocentrism rejects the Second Estate function—the warrior-king. What is left is an apotheosis of the Third Estate—the merchant-producer. This is the root of capitalism’s mercantile values of freedom, rule of law, and consensual governance.

Under capitalism, “the market”—i.e. the abstract rules-based order based on the paradox of tolerance—makes each man into the source of his own highest values. These values taken together make up what capitalist apologists rather unreflectively call “merit”. Never is it seen that this “merit” rests on assumptions that could have been otherwise. Always, “merit” is considered good full stop. But let us examine what our alternative framework would consider meritorious.