This chapter seemed to touch more on the idea of people being free to choose for themselves where they want to fall within the society, rather than a centrally planned society that would assign them a rank or standing. This idea is reminiscent of the reverse auction idea that he discussed in chapter 7 with the airlines.
Beginning at early stages in life, we have to weigh pros and cons of our actions and how they will affect our future; we (and our parents) have to train ourselves to realize what we are really getting the highest utility from. Is it going to class, keeping up with homework and projects, resulting in a higher grade, or is forgoing these obligations for other short term, recreational pleasures. The subsequent outcomes of these actions let us know that (in most cases) hard work will have a higher pay out. Hopefully as we reach adulthood we can manage ourselves and recognize what actions will have the most positive affect on what we picture as our ideal future. Frank is right that there needs to be people on all rungs of the social and economic ladder for the society to best function.
The street sweeper did not find a high utility in pursuing a high rank in society, or maybe they did, but there was too much competition and they were pushed out by others more qualified for those niches. Some people may prefer a job with a meager salary, yet affords them plenty of free time, while others who put a higher value on material items, rather than time, would go after the more time intensive, higher paying jobs.
In these situations no one is being coerced, they are acting on their own preferences. Even the street sweeper knows that if they take certain steps, they can advance their position in society, depending on whatever restraints they are dealing with, but no one is saying "You must forever be a street sweeper".
He didn't seem to talk much about taxation in this chapter, except in his example of the neighborhoods with higher property taxes having better schools. I can see how this definitely makes sense in a way, but if property taxes keep getting higher, there is less incentive for people to become property owners. It translates as a sort of punishment for being successful. I think that a sales tax would be the fairest way to collect tax revenue; people from all income brackets will simply spend what ever they are comfortable with, people who buy more with therefore end up contributing more to the tax pool, but it is by their own actions. I feel like giving people this choice is much less coercive, and lets them be responsible for their own spending.