Episode 107 · 2021-11-14 · 36:08 · Original in Finnish
Meritocracy and Human Capital | Elias Rantapuska | Negotiator 107
Originally published as “Meritokratia ja inhimillinen pääoma | Elias Rantapuska | Neuvottelija 107”
Elias Rantapuska, head of the department of finance at Aalto University, defines meritocracy as an order in which you rise through innate talent, hard work, or a combination of the two, and points out that it is historically young and, set against a hierarchy based on birth, a good system in principle. The episode's sharpest argument concerns the asymmetry between financial and human capital: a million-euro portfolio can be managed on ten hours of advice, while turning talent into world class takes the ten thousand. That is why Piketty is, in his view, only partly right. The conversation widens into invisible meritocracies and into meta-work, which inside an organisation is called management.
Core theses
- Financial capital scales with almost no time input and human capital does not, which is the asymmetry the whole argument turns on.
- Piketty is right about the returns to capital and incomplete about human capital, because the two cannot be accumulated on the same terms.
- Meritocracy is historically recent, and comparing it to an ideal rather than to inherited hierarchy is what makes it look worse than it is.
- Meta-work — organising other people's work — is the invisible category, and an organisation calls it management without noticing it is the same thing.
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Summary
Elias Rantapuska, head of the department of finance at Aalto University, defines meritocracy as an order in which you rise through innate talent, hard work, or a combination of the two, and points out that it is historically young and, set against a hierarchy based on birth, a good system in principle. The episode’s sharpest argument concerns the asymmetry between financial and human capital: a million-euro portfolio can be managed on ten hours of advice, while turning talent into world class takes the ten thousand. That is why Piketty is, in his view, only partly right. The conversation widens into invisible meritocracies and into meta-work, which inside an organisation is called management.
Ten hours against ten thousand
The comparison is the episode. A million euros can be put to work with a morning’s advice and will compound whether or not its owner does anything further. A talent becomes world class only through an amount of time that cannot be delegated, bought or inherited. Everything else in the conversation follows from that difference.
Where Piketty stops
Rantapuska accepts the capital side of the argument and says it is incomplete, because human capital obeys entirely different accumulation rules. Whether that rescues meritocracy or merely relocates the problem is the question he leaves open.
Meta-work has a name
Work that consists of arranging other people’s work is invisible in most accounts of merit, and inside a company it is simply called management. Naming it as a category is the episode’s quiet contribution.
Watch
The recording lives on the Neuvottelija channel: Meritokratia ja inhimillinen pääoma | Elias Rantapuska | Neuvottelija 107. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Elias Rantapuska