If we build upon your assertion ("to have an effective meritocracy you have to have universal education"), if some of those in power define universal education differently (which would seem to make any concept of universality in education void of such in practice), then it wouldn't be surprising to see a decline in the effectiveness of an economic system, which is what I would suggest is what we are seeing today.

Universal education is not the same as universality in education. If the aim is to identify the 0.1% it does not matter if the universal education is rather spotty in quality since the highly intelligent will manage to succeed no matter how poor the educational environment.

If you want to be really clever you just give those smart kids who had a bad school environment bonus marks at the university entrance stage and give full scholarships - say just like the elite universities do right now.

I should mention the aim of the rich is not to maximise production, but their share and status. It does not matter if the pie is smaller as long as the size of your slice is larger.

What would stop any of such highly intelligent from eventually co opting the structures of today and doing something short term orthogonal (maybe even beneficial to the "share and status"), long term oppositional to some of those in power, if say, they reject to continue attending an ivy/elite league university after they attend for a couple of years after getting a scholarship, and realize that they can pursue "other interests" with such forces of coercion in mind?

This is actually a very good question. There are really a few possible answer to this. The main one is that those clever people that can make it into the ruling class, but choose to reject it, are not a worry to the ruling class since these people are not going to organise a revolution from outside. If you are not interested in ruling then you are not a worry to those in power.

More fundamentally most very smart people realise that they are outliers and that their children are likely to regress to the mean. While the elite welcome the very clever into their club, they also use their power and status to benefit their not so clever children (e.g. legacy students).

I'm curious about the ideas that people have when they speak of such subjects, can you possibly enumerate on the other answers that you had in mind besides the main one you listed?

I am of course speaking as an outside observer to the ruling class, but I have some personal interaction with this class (Australia is not that big). The vast majority I have met are intelligent and decent people. Their one major flaw is they believed that they made it there on merit, when in fact they all came from very privileged backgrounds (both genetically and environmentally). If you believe that you are rich and powerful because of your own hard work then you are prone to dismiss people who aren't rich as just the people who have just not worked hard enough.

If you banish any of the smart/clever/etc to the underclass they might just start a revolution. Much easier to invite them to join the party.

Exactly right. The rich found this out early last century with the rise of communism. What they did was very clever; they basically introduced socialism in the 1930s by shifting the majority share of production to the masses to keep them quiet, introduced mass higher education with an emphasis on identifying the very smart (troublemakers if excluded) and brought them into the ruling class. Once this "decapitation of the masses” was in place (1970) they slowly took back their share of production. We are now back to the level the rich had in the 19th C. Impressive if somewhat depressing.

Democracy is the insurance premium the rich pay against the threat of pitchforks and guillotines.

Democracy only works if you have leaders. The non-rich no longer have leaders. We do at least have better bread and circus than the past.