Earlier quoted context omitted.
It's unclear why you think the educational system needs to be part of the social ladder. I'm imagining for example that all citizens are required to receive an education, and demonstrate the same level of mastery in the subjects taught as everyone else, without grades or rankings. You might call it "pass-fail", but I resist that idea, because I don't consider failure to be an option, except in rare cases of learning…
> why you think the educational system needs to be part of the social ladder. Depends if you want the people running the country to be competent or not.
In some sense, the goal of the educational system should be to make everyone competent. In any case, it's unclear what you mean by "running the country". Politically speaking, the people currently running the US are not competent, despite the fact that the educational system and the social hierarchy are inextricably entangled.
Whatever kind of -ocracy you're proposing (I'm personally not proposing here that we abolish democracy), I don't see any inherent reason why a social ranking system and the educational system can't be separate rather than combined into one.
When employers start looking the alma mater of applicants, their grades in school, and such (reportedly Mark Shuttleworth of Canonical is obsessed with high school!), that's when the entire educational system gets warped. Learning gets cast aside in favor of credentialism, and consequently, cheating to get ahead.