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[...] the last thing that mattered in Silicon Valley was technological innovation. Marketing came first and foremost. The actual products of the tech industry—computers and software—were less important than the techniques used to sell those products, and to sell shares in the companies that made them. The portfolios of venture capital firms were composed largely of go-nowhere companies built on bluster. There was a paucity of genuine innovation Ghazi shook his head. Neither was having revenue, or customers. In fact, the last thing that mattered in Silicon Valley was technological innovation. Marketing came first and foremost. The actual products of the tech industry—computers and software—were less important than the techniques used to sell those products, and to sell shares in the companies that made them. The portfolios of venture capital firms were composed largely of go-nowhere companies built on bluster. There was a paucity of genuine innovation among these companies, because incremental advances in technology were less reliable generators of profit than, say, finding clever ways to rip people off, or exploiting regulatory loopholes. The overwhelming majority of VC-backed startups were destined to flame out quickly—or, at best, to sputter along for a few years producing modest annual returns of, say, 1 percent. This was not necessarily a problem, at least from the investors’ point of view. Ghazi explained that 60 percent of a venture fund’s earnings typically come from 10 percent of its investments, and “everything else is crap.” Thus financiers were almost guaranteed to profit, eventually. The odds were much worse for entrepreneurs, who were almost certainly doomed even if they secured VC funding. A 2012 Harvard Business School study of two thousand venture-backed companies found that more than 95 percent failed. “You don’t hear a lot about the failures,” Ghazi said.

He was right. Techies only talked about their past failures as a necessary prelude to their present success. But most failures were permanent, and founders didn’t easily bounce back. I contemplated those numbers from the Harvard study. If 95 percent of startups failed, that meant 5 percent of startups received most of the attention from inside and outside the industry. Which meant that the mediated image of Silicon Valley bore little resemblance to the reality. I was living the reality. The reality was that almost everyone was a loser like me, trying to break through.

We were chum. Fodder. Marks. Ghazi shared with me his pity for “fresh-off-the-boat” entrepreneurs who lacked elite connections and still believed the hype about meritocracy, opportunity, collaboration, and geek camaraderie. As Ghazi saw it, one single factor determined who even got the chance to join the 5 percent of winners: “It’s about who you know,” he said. “Go to Stanford, and if you have a bad idea, it will get funded.”

Here's another truth about tech life: anyone who claims the Valley is meritocractic is someone who has profited vastly from it via nonmeritocratic means like happenstance, membership in a privileged cohort, or some concealed act of absolute skulduggery.

What is often forgotten is that Michael Young's 1958 book, The rise of the meritocracy, which introduced the word, was a satire, not a blue print. Its point was the smugness of those who rose to the top of such a society and believed not only that they deserved whatever rewards flowed from that, but also that their own children would deserve them too reflecting the advantages of their inherited abilities, as well as the way they would be brought up.

But we didn't have a term for "meritocracy" until the twentieth century, when the British sociologist and politician Michael Young wrote a book in 1958 warning of how dangerous the world's relatively new method of establishing status might be. In his novel The Rise of the Meritocracy, Young portrayed a dystopian Britain in which status based on birth and lineage was replaced by status based on education and achievement. Young wasn't advocating for a return to the old system, but he did see grave dangers in the new embrace of meritocracy, eerily predicting that in this new world, status would still be accessible only to a select few: those who had access to elite education. As a result, meritocracy would produce a new social stratification and a sense of moral exceptionalism.

Though Young's book was meant as a cautionary satire, the idea of meritocracy took off, all negative connotations forgotten, as the term for a new equality of opportunity [...]

That's when Young penned an op-ed for the Guardian in which he confessed he was "sadly disappointed" by his book's effect. "It is good sense to appoint individual people to jobs on their merit," he wrote. "It is the opposite when those who are judged to have merit of a particular kind harden into a new social class without room it in it for others ... If meritocrats believe, as more and more of them are encouraged to, that their advancement comes from their own merits, they can feel they deserve whatever they can get. They can be insufferably smug, much more so than the people who knew they had achieved advancement not on their own merit but because they were, as somebody's son or daughter, the benefitciares of neptosim. The newcomesr can actually believe they have morality on their side. As a result, general inequality has been becoming more grievous with every year that passes."

Wall Street argues that its greed for money is a "counteracting" interest against other more evil passions such as racism and sexism. Because investment banks are so greedy, so singularly focused on money, they become money meritocracies: whoever makes them money will be rewarded regardless of background or identity. Of course, instead of understanding desire for money as itself a constructed "passion," most Wall Streeters see it as a naturalized state. Similarly, the Wall Street mantra that "money does not discriminate" resonates powerfully with the assumption of neoliberal economic theory that racism and other prejudices form "an impediment to efficient market transactions and [are] therefore likely to be overriden in the long run by the exigency to generate profit" [...]

Using money meritocracy as a dominant discourse of exceptionalism, investment banks differentiate themselves from corporate America, which they imagine to be caught up in the traditional "ol' boys' network." Unlike the bureaucratic, out-of-touch managers of most corporations, Wall Street bankers are a modern, renegade breed whose singular focus on money makes possible color-blind innocence and objectivity. [...] investment bankers did not have to be aristocrats, but could be "geeky quant-jocks" or amazing "chess players off the street". [...]

At the end of childhood, some millennials go to college to continue accumulating human capital. Harris is a peerless observer of the harrowing economic costs of “meritocracy,” and his chapter on college abounds in withering aperçus. “College admissions offices are the rating agencies for kids,” he writes. “And once the kid-bond is rated, it has four or so years until it’s expected to produce a return.” Because the pressure to accumulate human capital is so intense, students will bear enormous costs to do it. Far from the coddled children of stereotype, Harris points out, most college students are “regular people—mostly regular workers—who spend part of their work-time on their own human capital, like they’ve been told to.” Exhaustion, overwork, and even food insecurity are common. Colleges themselves, meanwhile, reap obscene rewards from their gatekeeping position by offering a worse product for a higher price: hollowed-out pedagogy from exploited adjuncts and graduate students, masked with “shiny extras unrelated to the core educational mission.” Aggrandizing administrations bloat on student debt, the key to the whole scheme. Student debt, Harris argues, is a bloodsucking Keynesian stimulus, turning the value of the future labor of young borrowers into the capital to build stadiums and luxury dorms today, jacking up tuition even higher and allowing another round of borrowing and building.

But not every kid-bond matures. Students who can’t keep up are diagnosed, drugged, and punished. The extraordinary proliferation of mood and attention disorders among the young, and their development into a lucrative pharmaceutical market, is only the logical complement of the human-capital-accumulation regime of testing, supervising, and debt collecting. Depression, Harris notes, is up 1,000 percent over the past century, “with around half of that growth occurring since the late 1980s.” While there’s always a question about changing diagnoses with this sort of figure, Harris is convincing that there’s more to this phenomenon than an artifact of measurement. So too the growing punitive apparatus waiting to catch kids who fail: “We can draw a straight line between the standardization of children in educational reform and the expulsion, arrest, and even murder of the kids who won’t adapt.” On this account, mass incarceration, too, is a generational phenomenon, and it makes its first appearances inside schools, which are now heavily policed zones, as are the public spaces in which working-class kids congregate. “Millennials are cagey and anxious, as befits the most policed modern generation,” Harris writes. In this way, the book effectively argues that widely different experiences of neoliberalism—from the grasping student’s anxiety for good grades to the young person of color dodging the cops—are nonetheless part of the same social process.

One company, which the Wall Street Journal called “The Epitome of a Stanford-Fueled Startup,” encapsulated in every respect the sham of the Silicon Valley meritocracy, from its charmed beginnings to its ignominious downfall. This company, called Clinkle, secured investors before settling on a product. Clinkle was, in the words of its founder, Lucas Duplan, “a movement to push the human race forward,” but beyond that no one seemed quite sure what the company was all about. Duplan was a nineteen-year-old Stanford computer science major and an insufferable showboat. No need to dwell on Duplan’s shortcomings, however—the important thing is that his academic adviser was Stanford president and Google board member John Hennessy. Along with Hennessy, several professors backed Duplan’s charge into the private sector, endorsing what the Wall Street Journal called “one of the largest exoduses” in departmental history. More than a dozen students abandoned their studies to work for Duplan, who rented a house to serve as Clinkle’s headquarters-cum-dormitory with money invested by his parents and a VC firm, Highland Capital. One company, which the Wall Street Journal called “The Epitome of a Stanford-Fueled Startup,” encapsulated in every respect the sham of the Silicon Valley meritocracy, from its charmed beginnings to its ignominious downfall. This company, called Clinkle, secured investors before settling on a product. Clinkle was, in the words of its founder, Lucas Duplan, “a movement to push the human race forward,” but beyond that no one seemed quite sure what the company was all about. Duplan was a nineteen-year-old Stanford computer science major and an insufferable showboat. No need to dwell on Duplan’s shortcomings, however—the important thing is that his academic adviser was Stanford president and Google board member John Hennessy. Along with Hennessy, several professors backed Duplan’s charge into the private sector, endorsing what the Wall Street Journal called “one of the largest exoduses” in departmental history. More than a dozen students abandoned their studies to work for Duplan, who rented a house to serve as Clinkle’s headquarters-cum-dormitory with money invested by his parents and a VC firm, Highland Capital.

With the prestige and power of Stanford’s leadership behind it, and still without a solid business plan, Clinkle raised $25 million in seed money to develop some sort of app that would exist somewhere in the “mobile-payments space.” The predictable squandering of that impressive sum was chronicled with due skepticism and schadenfreude on Gawker’s Valleywag blog and elsewhere, though many a suck-up rose to Clinkle’s defense. Employees were resigning in frustration even before pictures emerged of Duplan posing like P. Diddy with handfuls of cash. Layoffs followed. Panicked investors called in a series of experienced managers as “adult supervision,” one of whom quit within twenty-four hours. Long overdue and well over budget, Clinkle eventually launched a digital payments service, and later pivoted to a digital twist on an old-fashioned lottery. Clinkle became a punch line and Duplan a pariah. But the real blame belonged to some members of the Stanford administration and the sheeplike VCs of the Valley. It seemed to me that they were the ones who were seeking to exploit the bountiful energy of relatively naïve tuition-paying kids to make a fast buck on pointless, unworkable, and otherwise dubious investment schemes. The dropout entrepreneurs were just eager saps who, when handed shovels, dug holes for themselves.

[...] The institutionalized meritocratic system helps a few to gain access to positions they merit and from which they might otherwise be barred. But it allows many more to gain access to positions on the basis of ascribed status under the cover of having gained this access by achievement.

There is never a ‘meritocracy’ – a ‘just’ correspondence between performance and income – in capitalism. However, the idea of a just income is useful: it justifies conditions in which a discussion about just wages occurs, but not one about the relations of disposition and power that actually underlie and regulate income. This legitimizing function is what Piketty has in mind when he warns against growing inequality. What does he see as the central problem of growing inequality and the concentration of wealth? The fact that wealth is increasingly distributed through inheritances and not through performance. With that – and only with that – inequality becomes injustice and thus a problem for Piketty, since inheritance is a way of transmitting wealth that is not mediated by the market, which he regards as scandalous. His demand is that only the market should decide the distribution of income. The market is for him the central entity of justice: market results are fair results.

Propelled by these epic feats—clever software, endurance, nutty work hours—the PayPal crew developed a proud sense of having won the gold ring in the meritocracy of Silicon Valley. While most other high-tech firms were collapsing in the dot-com bust of the early ’00s, PayPal was soaring. It successfully went public, then was bought by eBay for $1.5 billion, making its founders remarkably wealthy. PayPal, the vice president Keith Rabois proclaimed, was a “perfect validation of merit.” As he told the journalist Emily Chang: “None of us had any connection to anyone important in Silicon Valley. . . . We went from complete misfits to the establishment in five years. We were literal nobodies. People wouldn’t talk to us.”