@ Grakelin
"If it was done efficiently" is one of the big problems. How could we possibly ensure efficiency? More importantly though, how could we ensure progress?
Progress comes with new ideas to make the limited labour and resources we have more efficient. Each of these often originate among other bad ideas. As an example, imagine the first creation of cheese. All cheese is, at it's heart, rotten milk. Someone had the idea of "hey, the milk has gone sour, lets eat it". Among the undoubtedly several failed and possibly deadly results, someone figured out a few strains of good cheese and found how to propagate the technology onward. Crazy leaps forward don't happen by decree.
Also, consider that to manage a complete society can't be done well by someone with higher intelligence. We are not managing relatively stupid dwarves. Dwarves managing themselves don't think to make megastructures, self-powering water-pumps or compllicated obsidian mines. If we were to build a society that we hoped to survive, it would have to account for the crazy leaps that could happen in the future, and preferably encourage it.
Social pressures I would agree could help some progress, but it would be unreliable to rely entirely on culture. Culture is extremely slow moving, and is often cluttered with bad ideas that are even more hard to remove.
@Glowcat
Corporatism is an interesting addition to the conversation. Technically a free-market requires an absurdly large amount of companies. Also, the people who buy goods (almost everyone) would need good information on every one of these companies. This amount of information is far beyond what we are capable of thinking about. Thus it's easier to buy something off of a few venders than to analyze all every time we make a purchase.
@AntiAntiMatter
The biggest problem with a meritocracy that I see is that we don't know what "merits" to use. IQ means nothing. Test scores mean little. Intelligence is completely subjective, and education is only as useful as the contents of the curriculum. The way we measure education is also the equivalent of brainwashing. Those that do better on a standardized test may be more insightful or more knowledgable than their pears, but they may also have simply memorized a specific set of data. I'll use the example of one of my fathers coworkers at ford. She is (by his account) a very intelligent and highly educated employee, but when she started she didn't even know the difference between righty-tighty and lefty-loosy (how to turn a screw).
The only way we could fairly and accurately evaluate politicians to be fair in a meritocracy is to give the job and THEN evaluate them.