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Are We a Caste System? The Hierarchy of Priests (Simi’s Take)

On the one hand, Judaism values your free will - it's our effort to grow that matters. Seemingly in stark contrast to that is the concept of a sect of Kohanim - priests - born into the office and receiving different advantages and gifts. How does our usual meritocracy fit together with this seeming caste system? Added to this question is the concept that we, the Jewish people, are called a "kingdom of priests." How does this parallel?