"Egalitarian meritocracy" is relative.

It used to be that going to Harvard was largely a measure of whether you had enough money to go to Harvard. In 1950, the acceptance rate at Harvard from elite preparatory schools was almost 90%.

Today, it's an "egalitarian meritocracy." The acceptance rate is around 5-6%. A quarter of students come from families that make below $80k, and 60% of students receive some financial aid. In other words, a household income of $80k, which is top 30% nationwide, puts you at the bottom 25% mark at Harvard. Further, 40% of students apparently come from households making over $180k (the point at which aid phases out), which puts them in the top 5% or so of households nationwide. The statistics at Princeton, Stanford, etc, aren't any different.

People in the start-up world talk about "egalitarian meritocracy" in the same breath as they say they give explicit preference to kids coming out of Stanford, a place where the median person is from the upper middle class. It's true in a purely relative sense. It's very meritocratic compared to how things were historically, and how things still are in many parts of the world.

That is not to say that these institutions could be appreciably more meritocratic by their own efforts. Rather, when talking about whether a field is "meritocratic" you can't ignore the fact that class and income-based sorting takes place at a much earlier stage in the pipeline.

If merit correlates with the ability to make money and merit is heritable, you'd expect those with merit to come from families with money. Top schools and our industry are probably far from pure meritocracies, but that data doesn't prove (or even strongly suggest) it.

> "If merit correlates with the ability to make money and merit is heritable..."

In the UK this was called being of 'good breeding'. It's no more true now than it was back then. Bear in mind that money is also heritable.

Your claim that it isn't true is nice and all, but actual evidence that it isn't true would be better.

No, extraordinary claims require extraordinary evidence. If you're asserting that entire family lines are genetically (not just by environment) predisposed to success at business, you're the one who needs to back that up with facts.

Just to clarify, you're asking him to prove that the rich aren't genetically superior to the poor?

To quote myself: "If merit correlates with the ability to make money and merit is heritable, you'd expect those with merit to come from families with money."

Is my logic incorrect? Does merit not correlate with the ability to make money? Is merit not heritable? None of those questions have been answered, but we did get to see some good ad hominem reasoning.

> Is my logic incorrect? Does merit not correlate with the ability to make money? Is merit not heritable?

You're using the word "merit" in an impossibly vague and poorly-defined way. You might as well say that having a sweet tattoo is a merit when picking up dudes/ladies, and merit is heritable, therefore sweet tattoos are heritable.

And, again, you're the one making extraordinary claims, so you're the one who needs to provide extraordinary evidence. I would genuinely love to see it.

You'd have to define merit. For instance, on the one hand 'general intelligence' has been shown to be heritable (via adopted twin studies), but on the other, 'general intelligence' scores have increased massively in Africa as schooling becomes more widespread. So, is general intelligence heritable? Do our tests for intelligence really measure how much like a middle class European you are?

These are interesting academic questions, but I wonder if you'd agree with this - having access to 5MM in no questions asked family funding is more useful than 50 extra IQ points, because you can always hire clever people.

Is there any difference between the ability to make money and "merit" in this discussion? There definitely is a difference in the world, but in this discussion, you seem to be conflating them.

The ability to make money is also strongly related to how much money (and the advantages that go with it) you start life with.

It depends on the family. Hell, I drop a couple thou a year helping my retired mother financially, as she has zero money and zero sense with whatever little money she gets. My family has always been dirt poor (and those who are still dirt poor look enviously and somewhat resentfully on me and my one sister who also achieved a comfortable middle class life).

My wife's family, on the other hand, is solidly upper middle class all around. Her grandfather worked from a Kansas dust bowl Depression childhood to a Harvard MBA and probably several million in net worth. Several of them are "qualified investors" in the legal sense and could angel-fund a startup.

But I won't ask them for a cent, not even take it if it was offered. Why? Because they're family, and not blood family at that. If I took investment money from them and it failed, I would be paying for it in non-financial ways for the rest of my life, and my wife would be paying even worse. Even asking would be a tremendous misstep of the delicate dance of family.

So yeah, even if Grammaw and Uncle Barry have twenty grand to invest doesn't mean there's anything "casual" about it.

I should add that I've been "Uncle Barry" too. One of my poor sisters and her daughter tried to get me to loan them ten grand to help start a business, and I refused. Why? Because their plan was nonsense. I think they have a good $20-30k/year idea, which is great, but they were absolutely convinced that it's a $100k business - something I consider impossible upon running various numbers and the limitations of hands-on work. If they're not willing to be realistic about their scope, I'm not going to hand them money to pour down a hole.

Some families have little money, but are willing to lend what little they have among each other. Some families have plenty of money and are willing to lend to each other. Some families have plenty of money, and think that it is poor form to lend to family.

People in my extended family go out of their way to help family members when they are down; for instance covering a few college loan payments or providing a bed to sleep on for a few weeks, but going to them for a business loan? That is not done, even with comparably small amounts of money. I kind of always assumed that was the common attitude, but I guess not.

Bezos's parents invested 300k into Amazon or whatever it was called at first.

Though Jeff came out of a hedge fund (DE Shaw) and doesn't seem to have been struggling :)

He wasn't struggling but he left before getting his bonus so I don't know how much of his own capital he had to invest.

20 grand isn't that much. Go hang out on mrmoneymustache.com or earlyretirementextreme.com and you'll see plenty of people with twenty grand set aside for "risky investments".

It's especially true right now, as depression era children have all retired after a lifetime of deeply-ingrained frugal living.

See, this is kind of what I'm talking about. There's a world out there in which people can say "20 grand isn't that much" with a straight face. I guess it's nice that that world exists, but it really doesn't represent the experiences of most Americans.

I should rephrase. 20 grand isn't much over the course of a few decades. It's a lot for a 20 something year old fresh out of school.

For someone in their 40s, having 20 grand available for such an investment isn't always the result of good fortune. It's a low enough sum that can be attributed merely to frugal living and smart financial decisions. It's easily the difference between packing a lunch instead of eating out every day throughout a career. It's the long term difference between driving used Hondas instead of new Hondas.

I understand there are plenty of people who don't have such choices, but I guarantee there are plenty of individuals here on HN that could squirrel away 20k a year if they really tried. Saving 20k over the next decade is well within the reach of most individuals.

This is exactly right. The parent is right that it doesn't represent the world of many Americans, but for most of them, it is their own fault. i'm sorry if that that offends anyone, but stop living beyond your means and you can save up 20k. It doesn't really matter how much you make. The key is to simply spend less than that number.

FWIW, 20k is still a big number to me, but not that big and I'm a 20 something that quit my job a few years ago to start my own business. I didn't ask any family or friends for money, instead I saved for 2 years to give myself a > 12 month emergency fund / runway[1]. I can't imagine how people would ask for a loan/gift from family rather than simply live frugally for a year or two.

[1] - my wife and i paid off ~30k in student loans, and saved a ~30k emergency fund in about 22 months making ~80k combined a year. We lived frugally so that I could quit my job and start my own business.

> ...it doesn't represent the world of many Americans, but for most of them, it is their own fault. i'm sorry if that that offends anyone, but stop living beyond your means and you can save up 20k. It doesn't really matter how much you make. The key is to simply spend less than that number.

Oh, God, this bullshit again.

When you've got two adults with no kids making 80K a year, "living frugally" and saving money is as easy as falling off a log. Now try doing that on 28K as a single parent, just for example. When you haven't eaten out in a year, clip coupons every day, get all your clothes from Goodwill, and are still only breaking even if everything goes right and the car doesn't break down and no one gets sick, "simply spend less than you make" is about as realistic as "simply grow wings and fly."

And don't try to tell me that that's a tiny minority of the population. In modern America, it's really not.

>When you've got two adults with no kids making 80K a year, "living frugally" and saving money is as easy as falling off a log.

Let's do some math. Saving 32k a year on 80 grand is not in fact as easy as falling off a log.

80k - (taxes + tithe) = 52k. we saved 32k per year, so that is 2 people living on 20k. Don't tell me it can't be done, I did it.

For single parents making 28k 20 grand is always going to be a lot of money. That's why I said most, not all. As it happens, single parents with 28k in income is not the median, not even close. There are a lot of people making a lot more than that. I was clearly not referring to the people living at the poverty line. FWIW, ~25% of America makes less than 30k[1]. The other 75% is who my comment was directed to. But hey, it's easier to be snarky than to let facts get in the way.

[1] http://en.wikipedia.org/wiki/Household_income_in_the_United_...

If I had squirreled away 20k over the last two decades by living frugally and packing bagged lunches to work, I don't think I would be throwing it at my nephew to spend on his startup.

It is obviously not an egalitarian meritocracy, but there are serious opportunities for anyone with access to the internet. The less fortunate will face a lot more adversity to find success, which makes it that much sweeter.