I don't.

The core issue: Who determines merit, ability, and position? The people who write the rules are the actual government, and governments secure their own power. Like every flawless paper-government system, it crumples as soon as the human element wets the paper.

However, assuming the rule book could be written flawlessly, with "perfect" selfless humans writing the initial rules and then removing themselves from power, there are unsolved issues:

• Popularity contests in determining merit. (I like Johnny Depp better than Amber. Who loses more status?)
• Comparing apples to oranges. (Are Athletes or Artists more worthy, what about the Plumbers and Mailmen?)
• Power corrupts.
• Do morals and ethics have a say in merit? (Save the entire planet, then start kicking cats. Still a hero?)
• How long does a merit last? (When a champion, or athlete, is no longer fit, are they de-positioned? Look at Rome.)
• Brilliant mathematicians get rewarded with what? (Better supercomputers, or political power? What qualifies them to make policy?)