Who Do You Know? And Are They Helping?

I have always thought that hiring by influence was a sign of small and less diverse economies. The adage "Who you know is more important than what you know" can surely not be true in talent-hungry, diverse employment centres such as New York and London. Unfortunately, though, I have observed disconcertingly many gatherings in London where everybody is from Oxford or Cambridge or Eton, and enough in New York where male white Ivy Leaguers dominate. Somehow the message about talent has not gotten through. Things seem (somewhat) better in much-smaller and evidently more provincial Toronto. Though there is here an odious emphasis on "Canadian experience" which disadvantages immigrants, especially those who are not from white English-speaking countries, there seems relatively less by way of hiring old school chums and their children.

These thoughts were revived recently upon reading a piece by Timothy M. Smeeding of the University of Wisconsin in the "Room for Debate" section  of the New York Times.

Smeeding notes that Canada is above average with respect to both inequality and child poverty, but has "more effective public investments in education, including nearly universal preschool, effective secondary schools and high rates of college completion." (Hard to imagine, but I am just quoting.) He continues:

While no society will ever overcome parental influences and fully equalize opportunities, policies that are based on lifting the children at the bottom of the income distribution offer the best chance for success. Unless the U.S. can learn from countries like Canada how to enhance mobility, Americans in search of an equal-opportunity society might just as well move north.

I wonder if the two things are related: less of a culture of preferring chums and insiders, more economic mobility (despite high economic inequality).