And the clients have every right to switch their accounts from such a nepotistic company to new companies started by the laid off former employees with real talent.
That's precisely why unions and government bureaucracy don't work nearly as well as free market competition. If you are the union boss or government bigshot (or even middling management), "who are you going pay in hard times (or good times), your family members,or people who are qualified and did a good job for you for all of those years"? Childrens of union bosses have an inordinate high rate of becoming union bosses. Childrens of government bureaucrats have an extraordinarily high rate of becoming bureaucrats. Mubarak wanted his son to be the next Mubarak; the Kims have ruled North Korea for two generations, going on third.
People don't have the freedom to shop somewhere else when nepotism takes place in government or government endorsed monopolies.
As for the ineffectiveness of modern "higher" education, one has to understand that "higher education" was created by the elite as a way to give their own kids a leg up on other kids. Everyone wants their own kids to do better. A meritocratic template via high education stamping is perhaps somewhat more legitimate than sheer inheritance per se. It also opened the opportunity for real learning when market demand drove what was taught at institutions of higher learning; before that, all universities primarily trained theologians for holding government/church offices. Now if we tax the real economy heavily to subsidize students' time in institutions, it is little wonder that the stay in the institutions get very expensive and there is very little market demand for the products afterward . . . while students waste their time on parties and on studying useless subjects that are the modern day equivalent of "how many angels can dance on the tip of a pin." Government subsidizing education is literally like putting the cart in front of the horse. High unemployment after graduation is the inevitable result, as a surplus of graduates compete for jobs left over after culling by taxation.
BTW, we can compare 17th-19th century England vs. France to see the difference between market driven education vs. government sponsored education: England had less college students but far greater job opportunity and prosperity; France had far more students and university graduates, but economic stagnation, and one political turmoil after another.
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