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* Britain Looks to Address jealousy with Executive Pay Measures A few executives making large salaries is not an actual issue.

ZenoArrow 9y ago
It is an actual issue. Distribution of wealth affects the strength of the economy. The more wealth you spread out amongst the many, the faster your economy is likely to grow. It's the working class and middle class that are the major driving force in an economy (including job creation), not the rich.
- randyrand 9y ago
  You've been lied to. Growth comes primarily from investment in science, technology, and other areas of innovation. The wealthy are much more likely to invest in these than the middle class because they have money to spare. The middle class is primarily a consumption class, not an investment class.
  - ZenoArrow 9y ago
    > "Growth comes primarily from investment in science, technology, and other areas of innovation." No, it doesn't. It's quite simple, none of those advances in science and technology mean a damn to the economy if there's no consumers buying new products. A working class person is much more likely to spend £1000 into the economy faster than a rich person, mainly because their needs are more immediate. Spreading wealth around leads to a broader base of consumers and a healthier economy. Also, it's quite clear that the opposite (trickle-down economics) has been a dismal failure.
    - oh_sigh 9y ago
      Ok, so now we have a bunch of companies selling soda to end consumers, instead of risky startup in unproven fields which may lead to large changes in our world.
      - ZenoArrow 9y ago
        Consumer tech is still a thing. You're almost certainly using a consumer tech device right now. As for R&D, there's little evidence that suggests the wealthiest amongst us are the biggest risk takers. One of the reasons people like Elon Musk get a lot of media coverage is because he breaks the mould, he's a wealthy individual taking big risks to better our world. There aren't that many people like him around. Even venture capital investors, who are (by reputation) open to risk, tend to stick to the safe bets.
    - clarkmoody 9y ago
      > new products Research & innovation create new product categories. No amount of consumer spending invents new products. I disagree with you that consumer spending boosts the economy. Look at the actions of central banks easing monetary conditions to try and boost spending. All they do is succeed in inflating bubbles that later produce busts. Economic growth is a subject not completely understood by economists. Is is savings or investment? How does regulatory burden come into play? What about property rights and government corruption?
      - ZenoArrow 9y ago
        > "Research & innovation create new product categories. No amount of consumer spending invents new products." Potential consumer spending does create the space for new products. Take VR as an example. The recent resurgence in VR has been made possible by the disposable income of gamers, especially PC gamers. Look at the high amounts of money being spent by gamers. If that disposable income did not exist, the resurgence of VR would look very different, and products like the Vive and the Rift are unlikely to have emerged. As for whether consumer spending drives scientific research, depends on what you class as consumer spending. For example, do you class student loans as consumer spending? Do you class government taxes as consumer spending? I'd suggest that funding from a diverse group of people is more reliable than hoping a handful of rich people do the right thing.
  - albertgoeswoof 9y ago
    This makes no sense. You're saying the rich invest their spare cash into science and tech? That's not at all true, the rich invest into areas that provide returns on their investments, that's how they got rich and how they stay rich.
    - oh_sigh 9y ago
      ...which has heavily included science and technology. At least for the past 40 years.
      - albertgoeswoof 9y ago
        ...along with thousands of other categories
  - otakucode 9y ago
    Luckily we don't have to guess about this. We aggressively cut taxes on the richest in the US for all of the 80s and 90s. They did not invest in science, technology, or any area of innovation. They did not create more jobs. They invested solely in the financial services sector, and the money remains locked up in there still.
  - CyberDildonics 9y ago
    Are you sure it isn't getting at the low hanging fruit in education and health care?
- chrisco255 9y ago
  Is it hard to believe that economic growth is a really complex topic? That distribution of wealth does not necessarily inhibit nor stimulate economic growth? That a lot depends on a lot of factors and it's impossible to run controlled experiments on economies because no two economies, cultures, and governments are the same?
  - ZenoArrow 9y ago
    On one level all models are wrong, but not all models are equally wrong. Let's use a hypothetical example. Imagine I'm a car salesman, and I move to a new town with 10,000 people. Am I likely to be better off if 1% of that population can afford to buy a car or 10% of that population can afford to buy a car?
    - ddxxdd 9y ago
      10%, sure. But are you any worse off if, out of those 10%, 1% can afford a private jet?
Analemma_ 9y ago
> A few executives making large salaries is not an actual issue. Do you have a citation for this? Because Capital in the Twenty-First Century showed, with a boatload of empirical data behind it, that "superstar salaries" are one of the main drivers of inequality at present (it's a key difference between the inequality now and that of previous centuries - earlier, we had inequality of wealth and now we have inequality of income)
otakucode 9y ago
Economic inequality is the sole reliable predictor of a high level of violent crime in a society. Thousands of different indicators have been examined, and economic inequality is literally the only one that correlates significantly with violent crime rates. And that's before you even get into the principles of the matter. If capitalism is supposed to be based upon people being paid relative to the value they actually create, outsized executive pay clearly betrays that standard utterly. While a small number of people could replace a business analyst who knows the operations of the business inside and out, almost anyone could do the job of a CEO who shows up and is gone within 3 years, off to a new company, serving as nothing more than temporary figurehead and whose primary actual job duty is to cash large checks so investors think the company is healthy.
- chrisco255 9y ago
  I'd like to see a source, but I'm willing to bet even if you're able to find it, is a comparison of US vs various European countries. I'm willing to bet it's non exhaustive and excludes all sorts of countries in South America, Africa, Middle East, and Asia...
  - otakucode 9y ago
    You're precisely wrong, actually. The source I would quote is unfortunately a dead-tree book, specifically the first chapter of the book 'Nine Crazy Ideas In Science'. The first chapter isn't even ABOUT economic inequality, but actually about the 'crazy idea' that tons of guns in a society could lead to less violent crime. The only actually sensible thing to do, of course, is to study EVERY society and not to cherry pick 'oh we'll only look at the developed countries and then claim to have found something about human society in general'. You look at all of them. And when looking at all of them, prevalence of gun ownership in a society had no correlation with violent crime. Not positive, not negative. So they threw in a thousand+ other demographic factors and couldn't find a single one that was a statistically significant predictor... except economic inequality. Poverty itself wasn't predictive, wealth itself wasn't predictive, only a presence of both poverty and wealth together was predictive, with the extremity of the gap predictive of the severity of the violent crime. One thing I am uncertian of is how exactly they defined 'violent crime'. Most people only consider street crime when addressing the issue. But most death from crime is due to white collar crime. White collar crime (at least in the US) kills more people and causes more economic damage than street crime by a large margin (but is socially normalized among the upper class so rarely punished, and then only lightly).
oh_sigh 9y ago
Especially in private companies. Can we make sure that the royal family, which is essentially a corporation (in fact, the queen calls her family "the corporation") is subject to the same rules, and they don't hide their payouts and tax breaks behind opaque special case rules just for themselves.

ZenoArrow 9y ago

It is an actual issue. Distribution of wealth affects the strength of the economy. The more wealth you spread out amongst the many, the faster your economy is likely to grow. It's the working class and middle class that are the major driving force in an economy (including job creation), not the rich.

randyrand 9y ago
You've been lied to. Growth comes primarily from investment in science, technology, and other areas of innovation. The wealthy are much more likely to invest in these than the middle class because they have money to spare. The middle class is primarily a consumption class, not an investment class.
- ZenoArrow 9y ago
  > "Growth comes primarily from investment in science, technology, and other areas of innovation." No, it doesn't. It's quite simple, none of those advances in science and technology mean a damn to the economy if there's no consumers buying new products. A working class person is much more likely to spend £1000 into the economy faster than a rich person, mainly because their needs are more immediate. Spreading wealth around leads to a broader base of consumers and a healthier economy. Also, it's quite clear that the opposite (trickle-down economics) has been a dismal failure.
  - oh_sigh 9y ago
    Ok, so now we have a bunch of companies selling soda to end consumers, instead of risky startup in unproven fields which may lead to large changes in our world.
    - ZenoArrow 9y ago
      Consumer tech is still a thing. You're almost certainly using a consumer tech device right now. As for R&D, there's little evidence that suggests the wealthiest amongst us are the biggest risk takers. One of the reasons people like Elon Musk get a lot of media coverage is because he breaks the mould, he's a wealthy individual taking big risks to better our world. There aren't that many people like him around. Even venture capital investors, who are (by reputation) open to risk, tend to stick to the safe bets.
  - clarkmoody 9y ago
    > new products Research & innovation create new product categories. No amount of consumer spending invents new products. I disagree with you that consumer spending boosts the economy. Look at the actions of central banks easing monetary conditions to try and boost spending. All they do is succeed in inflating bubbles that later produce busts. Economic growth is a subject not completely understood by economists. Is is savings or investment? How does regulatory burden come into play? What about property rights and government corruption?
    - ZenoArrow 9y ago
      > "Research & innovation create new product categories. No amount of consumer spending invents new products." Potential consumer spending does create the space for new products. Take VR as an example. The recent resurgence in VR has been made possible by the disposable income of gamers, especially PC gamers. Look at the high amounts of money being spent by gamers. If that disposable income did not exist, the resurgence of VR would look very different, and products like the Vive and the Rift are unlikely to have emerged. As for whether consumer spending drives scientific research, depends on what you class as consumer spending. For example, do you class student loans as consumer spending? Do you class government taxes as consumer spending? I'd suggest that funding from a diverse group of people is more reliable than hoping a handful of rich people do the right thing.
- albertgoeswoof 9y ago
  This makes no sense. You're saying the rich invest their spare cash into science and tech? That's not at all true, the rich invest into areas that provide returns on their investments, that's how they got rich and how they stay rich.
  - oh_sigh 9y ago
    ...which has heavily included science and technology. At least for the past 40 years.
    - albertgoeswoof 9y ago
      ...along with thousands of other categories
- otakucode 9y ago
  Luckily we don't have to guess about this. We aggressively cut taxes on the richest in the US for all of the 80s and 90s. They did not invest in science, technology, or any area of innovation. They did not create more jobs. They invested solely in the financial services sector, and the money remains locked up in there still.
- CyberDildonics 9y ago
  Are you sure it isn't getting at the low hanging fruit in education and health care?
chrisco255 9y ago
Is it hard to believe that economic growth is a really complex topic? That distribution of wealth does not necessarily inhibit nor stimulate economic growth? That a lot depends on a lot of factors and it's impossible to run controlled experiments on economies because no two economies, cultures, and governments are the same?
- ZenoArrow 9y ago
  On one level all models are wrong, but not all models are equally wrong. Let's use a hypothetical example. Imagine I'm a car salesman, and I move to a new town with 10,000 people. Am I likely to be better off if 1% of that population can afford to buy a car or 10% of that population can afford to buy a car?
  - ddxxdd 9y ago
    10%, sure. But are you any worse off if, out of those 10%, 1% can afford a private jet?

Analemma_ 9y ago

> A few executives making large salaries is not an actual issue. Do you have a citation for this? Because Capital in the Twenty-First Century showed, with a boatload of empirical data behind it, that "superstar salaries" are one of the main drivers of inequality at present (it's a key difference between the inequality now and that of previous centuries - earlier, we had inequality of wealth and now we have inequality of income)

otakucode 9y ago

Economic inequality is the sole reliable predictor of a high level of violent crime in a society. Thousands of different indicators have been examined, and economic inequality is literally the only one that correlates significantly with violent crime rates. And that's before you even get into the principles of the matter. If capitalism is supposed to be based upon people being paid relative to the value they actually create, outsized executive pay clearly betrays that standard utterly. While a small number of people could replace a business analyst who knows the operations of the business inside and out, almost anyone could do the job of a CEO who shows up and is gone within 3 years, off to a new company, serving as nothing more than temporary figurehead and whose primary actual job duty is to cash large checks so investors think the company is healthy.

chrisco255 9y ago
I'd like to see a source, but I'm willing to bet even if you're able to find it, is a comparison of US vs various European countries. I'm willing to bet it's non exhaustive and excludes all sorts of countries in South America, Africa, Middle East, and Asia...
- otakucode 9y ago
  You're precisely wrong, actually. The source I would quote is unfortunately a dead-tree book, specifically the first chapter of the book 'Nine Crazy Ideas In Science'. The first chapter isn't even ABOUT economic inequality, but actually about the 'crazy idea' that tons of guns in a society could lead to less violent crime. The only actually sensible thing to do, of course, is to study EVERY society and not to cherry pick 'oh we'll only look at the developed countries and then claim to have found something about human society in general'. You look at all of them. And when looking at all of them, prevalence of gun ownership in a society had no correlation with violent crime. Not positive, not negative. So they threw in a thousand+ other demographic factors and couldn't find a single one that was a statistically significant predictor... except economic inequality. Poverty itself wasn't predictive, wealth itself wasn't predictive, only a presence of both poverty and wealth together was predictive, with the extremity of the gap predictive of the severity of the violent crime. One thing I am uncertian of is how exactly they defined 'violent crime'. Most people only consider street crime when addressing the issue. But most death from crime is due to white collar crime. White collar crime (at least in the US) kills more people and causes more economic damage than street crime by a large margin (but is socially normalized among the upper class so rarely punished, and then only lightly).

oh_sigh 9y ago

Especially in private companies. Can we make sure that the royal family, which is essentially a corporation (in fact, the queen calls her family "the corporation") is subject to the same rules, and they don't hide their payouts and tax breaks behind opaque special case rules just for themselves.