Capitalism is predicated on the notion of hard work and meritocracy. The country was founded on this notion as a means of unlocking human potential in the context of a productive society. A meritocracy provides economic and social rewards based on merit. Here, if an individual works hard and provides a quality service, they should be rewarded with promotions or outsized economic gains relative to the individual who does not provide these services. Through a meritocracy, society benefits as the best performers are rewarded while the worst performers are shunned or ostracized. We see this concept in both the business environment and in the labor force. The combination of capitalism and a meritocracy is what has allowed America to flourish for over years. These two concepts have incentivized various innovations that span the gamut of automobiles to social networking. As a condition of providing these services, many individuals have become extremely wealthy for taking the risks of providing these services. Unfortunately, there are occasions where nepotism can abate the influences of a meritocracy. The idea of nepotism essentially undermines the concepts presented above by rewarded individuals not based on skill or qualification, but based instead on social relationships. The most common form of nepotism occurs when an individual provides favoritism to a relative who is not qualified to perform the task. In fact, Nepotism has occurred and been criticized by thought leaders over many centuries. These thought leaders several philosophers, such as Aristotle, Valluvar, and Confucius. Unfortunately, even these though leaders could do little to prevent the overall perversion the occurs through the use of Nepotism in a competitive environment. It undermines the hard work and performance of qualitied candidates. It also contributes to culture that does not reward hard work, but instead rewards social interactions. This, if allowed to continue over generations, could potentially ruin a business as the high caliber talents leaves for other fields of endeavor (Aronoff, 1993).

As noted in the introduction, Nepotism is not a new phenomenon. Instead, it has been a relevant factor in human civilization since human evolved from hunter-gathers and become forming communities. The idea was originally adopted in the middle ages due to religions reasons. Here, Catholic popes and bishops who took vows of chastity as part of their faith were unable to have children. As a result, these individuals have no offspring for which to transfer assets or history to. As a result, they would provide their nephews positions of power and influence within the church. During the middle ages, these were esteemed position due primarily to the overall dominance and wealth of the church. As a result, nephews often obtain large amounts of influence with little to no training, skills, or achievements. Several popes for example, would elevate nephews and other relatives to the cardinalate. Often, such appointments were a means of continuing a papal "dynasty" with the family. Ironically these decisions were not faith based at all. Instead they were based on preserving power within a particular family and maintaining it over many generations. Other families, who were often...

…the service rendered. Nepotism perverts these incentives and undermines the foundation by which economic incentives are rewarded. It does this be circumventing the overall meritocracy that undermines economic development. America has become so successful by allocating capital, resources and human potential within a market system. Elon Musk can garner large investments due to his uncanny talents ability and vision. The same applies to Steve Jobs. Society provided ample resources to these visionaries to allow their dreams to become true. Society was rewarded through goods and services that are consumed almost every day. Nepotism circumvents that market system by position people in power that should not other wise by there. As a result, capital and resources flow these individuals in the same manner they did for Elon Musk and Steve Jobs. However, the outcome is completely different as the ill prepared individual squanders the resources of society. Here the individual provides inferior services, goods and products. The primarily difference being that the individual retains his position of power as his family is also in power. This ultimately lowers employee morale and motivation while also increasing employee turnover (Ferrazzi, 2006).

In conclusion nepotism undermines the very essences of American society. It provides awards and incentives to underqualified and less talented individuals. It also lowers the stand of employment for other employees in the business who deserve a promotion. It lowers employee morale and motivation, while helping to contribute to high turnover levels within the organization. As such, all issues of nepotism must be dealt swirly and its influence mitigated…