What's wrong with nepotism?

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(MoneyWatch) Is nepotism always bad?

As if lawsuits about trading losses weren't bad enough, JPMorgan is now under scrutiny for hiring the relatives of powerful Chinese officials. Is this corruption? To be corruption, the SEC will need to prove that the individuals in question were hired only for their connections and lacked relevant qualifications. But while it might be easy for us to watch from a distance and mutter about how corrupt Chinese society is, I wonder just how pure we are ourselves.

Most of the parents I know scour their contacts when their kids are applying to college. They're desperate to find someone who can help get their children into the university of their choice. Long lost relatives and school contemporaries are suddenly reinvented as close friends in the hope that some secret handshake will prove more effective than class prep, application tutors and that old fashioned thing: Hard work.

After college, many of those same parents ply their friends and neighbors for internships, volunteer positions -- anything to get their kids on the work ladder. I've lost track of the number of people who ask me whether I need "help" or could use an intern for the summer. I don't mind their asking but since I haven't advertised, clearly they're hoping they can bypass channels and find an opportunity no one else has spied.

Take that a step further and look at LinkedIn which, you could argue, is nothing more than a technology platform designed to enable us all to use our contacts to secure an unfair advantage in the jobs market: Seeking to use connection, rather than ability alone, to win the next job.

The sad truth of the matter is that we all do this: Use the connections we have to tilt the playing field in our direction. So the real question is just how far it gets tilted. Does anyone seriously believe that Chelsea Clinton, Peaches Geldof, Nat Rothschild, George Clooney, Josh Brolin, Michael Douglas or even George W. Bush made progress solely on personal merit and capability? Of course not. Even the Wall Street Journal, which has written well on this subject, is part of News Corporation, which is famous for promoting the children of its founder Rupert Murdoch.

What this shows us is that while we all pay lip service to level playing fields and free markets, we live in a world full of people who want those for other people, just not for themselves. And this costs us all because the more people who game the system, the worse it works for everyone else. And not just in China.

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    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com.