fairness is not how things ever worked.
(from Markets Are Kinda Fake)
Fairness should not influence your personal decisions. As a descendant of animals, you naturally value yourself, your kin, and your friends more than strangers. It is not productive to lie to anyone about this, and certainly unhelpful to allow guilt about whether actions are “fair” to affect your decisions.
Also: a powerful person who believes in playing fairly is less likely to use their influence to obtain more power, and someone who doesn’t care about fairness will apply every nepotistic strategy in the book to their advantage. It seems likely that the first person is more idealistic, respects others’ wishes, etc. But the self-interested second person is the one who gains power, because the idea of fairness keeps the first in check. This is not what we want and is basically the reason politics and governments turn out the way they do.
Insofar as you follow the law, nepotism is simply the negative-connotation synonym of friendship. The world has always operated on friendship.
See also Never public markets and Become the broker.