My intuition is that if there isn't capitalism/meritocracy within your company (i.e. competitive forces that allow superior people to move levels quickly) then

My intuition is that if there isn't capitalism/meritocracy within your company (i.e. competitive forces that allow superior people to move levels quickly) then the company itself will be more subject to selection pressure against other more fit competitor companies (that do utilize the more talented "resources" for the more important tasks)