The point is that within the firm, there can't be that much disparity in pay - if the CEO wants to make several million dollars a year, he needs to justify that

The point is that within the firm, there can't be that much disparity in pay - if the CEO wants to make several million dollars a year, he needs to justify that by paying his employees an appropriate amount. If we're talking knowledge work, the work product is the work product, and it doesn't matter where it's generated - the person in Libya has as much right to earn $200k as the American.