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It is interesting to think about what what make these kinds of scenarios more or less functional, and more or less stable.

The implicit "positive sum bargain" seems important, where everybody gets something they value to help compensate for what they can't get, opportunities they are denied, and structurally thwarted ambitions.

One extra factor of the modern USG system (for career employees, revolving-door or other temporary positions are different) is the prospect of employment after leaving the government, in jobs that are highly desirable, lucrative, and/or high-status, and often considerably greater in each of these characteristics than even the very top jobs within the government. That means that a de facto and unmerited glass ceiling for certain individuals doesn't irritate them as much since it is more like an awning that only covers their time in government. Furthermore, they are still incentivized to conspicuously perform at the highest levels so that they can leverage their reputation and network to get one of those better jobs elsewhere. And, of course, many of those later jobs are both made available to these individuals and high-paying for them precisely because of the insider knowledge and social network connections they acquired and cultivated while in the government's employ, and so these people are also incentivized to keep investing a lot of extra effort into those areas and even to intensify them near the end of their government careers, because the value of these assets in their human capital is at a maximum the moment they leave and has a short half-life.

Then there is also the calming and stabilizing influence of widespread belief in "The Narrative" of that structure, the mythos of the set of legitimating rationalizations for obvious and common deviations from simple meritocracy. Maybe 'belief' is too crude a way to put the way that aspects of social psychology shape the individual's emotional disposition and responses, I think the perception that "all the highest status people I like seem to consistently support it" is more than enough to get a person of typical agreeableness to suppress any urge to scrutinize the mythos and to feel much more content about the big picture justness of their "station in life" and how all involved made good and enlightened decisions, the outcome of which, even if personally limiting, is tolerably proper.

Of course, when you don't buy into the mythos, and you see a capable person who does getting screwed over but who has been tranquilized by the pretty lies, one cringes at the Orwellian result of successful socially-induced self-brainwashing.

One also sees plenty of the opposite side of that coin, people who really are at their just station, or who have even been fortunate enough to be promoted far above it and who should by all rights thank their lucky stars and do everything possible to avoid rocking the boat, but who, under the influence of the mythos, still feel they have been unjustly kept down, are perpetually and inconsolably upset about it, are hypersensitive to perceived lack of respect, nurse vicious grievances, interpret actions and incidents in the worst light, and, since someone must always be to blame, carry around in their heads a growing list of villains akin to the one in The Mikado.

Personally, I don't see these two opposite situations as having remotely similar moral weights. Things that influence people to be more content despite an injustice, to stop thinking about it, and move on to focus on everything else in their lives, can certainly be a good thing on net if both the injustice suffered and degree of delusion is not too severe and outrageous.

On the other hand, agitating discord, disunity, and intense acrimony in people who by any reasonable measure are enjoying rewards greater than their contributions, strikes my sense of moral judgment as being deeply evil.

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