How does that disprove what I said about abundance or lack thereof in socialized systems? Feels like an orthogonal issue.

Socialized systems don't work without abundance. How you generate that abundance is orthogonal to socialism since even countries that are wealthy on paper suffer from shortages and long waiting times in public healthcare leading to a gray-market of using connections to get ahead or more private use.

They are arguing that nepotism caused the lack of abundance, instead of the lack of abundance causing the nepotism as you are arguing.

Both are true. Because when the abundance runs out, people start using nepotism to get what they need. You can see it in the tech job market now. More and more good jobs are only through networking. Meritocracy alone was enough during the times of abundance.

Hmm. In the framing you are using, I would say that wealth is first generated from strong institutions - socialism or not.