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I think this is fundamentally the correct point of view, however my argument would be that it's best to focus on improving the lives of the bottom half than bem

by cal5k 9y ago

I think this is fundamentally the correct point of view, however my argument would be that it's best to focus on improving the lives of the bottom half than bemoaning the wealth of the top 1%. This can be accomplished through progressive taxation and the like, which as a secondary benefit does reduce inequality.

mpweiher 9y ago
Agreed that that needs to be the primary focus...however (you knew there was going to be a "however"): Income and wealth inequality have reached pretty ridiculous levels, and noting that as a problem is not "bemoaning" people their (well-earned) wealth. A lot of that is not money earned by advancing society, a lot of is extractive/rent-seeking that is actually harmful (cough 2008 cough). For example: "The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality? 354-to-1. " https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/ https://www.scientificamerican.com/article/economic-inequali... Sorry, 354:1 is absolutely ludicrous, and I know a little bit of what I am talking about. My father was a high-ranking auto-executive, had actually been planned to succeed Carl Hahn as CEO of Volkswagen, but some funky politics got in the way of that. He never made that kind of money, and didn't want to. He thought it was obscene. And it is. He also thought unions were a Good Thing™, and they are. If nothing else, they are selective pressure on companies to become better. And that's despite having that belief tested to the limit, because at VW the unions pretty much run the place. So yes, envy is not a good thing, but noting that CEO pay is ridiculous, that banker's bonuses need to be reined in lest we all suffer the consequences, again, and that inheritance tax is not the devil is not "bemoaning".
- cal5k 9y ago
  Most people don't become wealthy by getting a job as the CEO of a large company - they start companies, work in finance, inherit their wealth, etc. It's an entirely symbolic ratio. If you halved it tomorrow it would not make one whit of difference. It just sounds outrageous and makes for compelling headlines.
  - mpweiher 9y ago
    > [Most people not CEOs → finance, inheritance, start COs] Hmmm...I actually mentioned finance and inheritance. Both are at current scales arguably worse. Finance has devolved into rent-seeking that leeches off the real economy and caused the 2008 crisis, with virtually no consequences. Unlimited inheritance creates oligarchies with wealth and power that hasn't actually contributed to society. > entirely symbolic ratio. Er, no. Please read up on behavioral economics. If rewards are too lopsided, the game too obviously unfair, people stop playing. That's a really, really, really bad outcome. One we want to avoid at nearly any cost.
    - cal5k 9y ago
      I'd be interested to read more on the topic if you have some recommendations? My suspicion (hypothesis, really) is that CEO compensation is too abstract a concept to actually impact behaviour all that much. It might spark outrage when people think about it intensively, but most people would be more focused on specific, tangible barriers to their economic wellbeing. Examples might include applying for jobs, networking, performance reviews, salary compared to industry average for their role (higher or lower?). I would imagine that behavioural economics in academia is probably very specific and attempts to be predictive, whereas behavioural economics in popular journalism is more philosophical and hand-wavy.

by cal5k 9y ago

mpweiher 9y ago

Agreed that that needs to be the primary focus...however (you knew there was going to be a "however"): Income and wealth inequality have reached pretty ridiculous levels, and noting that as a problem is not "bemoaning" people their (well-earned) wealth. A lot of that is not money earned by advancing society, a lot of is extractive/rent-seeking that is actually harmful (cough 2008 cough). For example: "The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality? 354-to-1. " https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/ https://www.scientificamerican.com/article/economic-inequali... Sorry, 354:1 is absolutely ludicrous, and I know a little bit of what I am talking about. My father was a high-ranking auto-executive, had actually been planned to succeed Carl Hahn as CEO of Volkswagen, but some funky politics got in the way of that. He never made that kind of money, and didn't want to. He thought it was obscene. And it is. He also thought unions were a Good Thing™, and they are. If nothing else, they are selective pressure on companies to become better. And that's despite having that belief tested to the limit, because at VW the unions pretty much run the place. So yes, envy is not a good thing, but noting that CEO pay is ridiculous, that banker's bonuses need to be reined in lest we all suffer the consequences, again, and that inheritance tax is not the devil is not "bemoaning".

cal5k 9y ago
Most people don't become wealthy by getting a job as the CEO of a large company - they start companies, work in finance, inherit their wealth, etc. It's an entirely symbolic ratio. If you halved it tomorrow it would not make one whit of difference. It just sounds outrageous and makes for compelling headlines.
- mpweiher 9y ago
  > [Most people not CEOs → finance, inheritance, start COs] Hmmm...I actually mentioned finance and inheritance. Both are at current scales arguably worse. Finance has devolved into rent-seeking that leeches off the real economy and caused the 2008 crisis, with virtually no consequences. Unlimited inheritance creates oligarchies with wealth and power that hasn't actually contributed to society. > entirely symbolic ratio. Er, no. Please read up on behavioral economics. If rewards are too lopsided, the game too obviously unfair, people stop playing. That's a really, really, really bad outcome. One we want to avoid at nearly any cost.
  - cal5k 9y ago
    I'd be interested to read more on the topic if you have some recommendations? My suspicion (hypothesis, really) is that CEO compensation is too abstract a concept to actually impact behaviour all that much. It might spark outrage when people think about it intensively, but most people would be more focused on specific, tangible barriers to their economic wellbeing. Examples might include applying for jobs, networking, performance reviews, salary compared to industry average for their role (higher or lower?). I would imagine that behavioural economics in academia is probably very specific and attempts to be predictive, whereas behavioural economics in popular journalism is more philosophical and hand-wavy.