The Peter principle says that “In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.” And the higher people get, the more rights (to money, power etc.) they get. Combined, this means exploitation of people on lower levels, who have fewer rights (as we are in a hierarchy, after all). Applications:
- As hierarchies are found in the economy, they create financial problems. People at the start of their career need to do all the hard work and get very little money for that, and start climbing the ladder that way, while people higher on the ladder exploit them.
- As hierarchies are found in states and other power constructs, they create problems of power abuse.
IMHO, the problem is the hierarchy itself, not its application. Hierarchy is cool for reducing complexity in technical items, but prone to be abused when applied to social systems.