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I wouldn't dismiss so quickly that it's impossible for some people to create orders of magnitude more value than others, or for that distribution to change dram

I wouldn't dismiss so quickly that it's impossible for some people to create orders of magnitude more value than others, or for that distribution to change dramatically with time. In farming, for example, increased mechanization has allowed a ~100x increase in per-worker production, and unless literally every other occupation had the same change over the same time period, that should lead to dramatic productivity differences. The real difficulty is in deciding who "gets credit" for producing a given thing. Is the person driving the tractor really more productive, or is the tractor itself responsible for producing most of the value (return on capital)? Maybe the bank that provided the loan for the tractor is creating value? Without any of those components, the food wouldn't be grown, so there's not an obvious way to divide it into the sum of individual contributions.

lisper 6y ago
> The real difficulty is in deciding who "gets credit" for producing a given thing. Exactly. The situation we currently have is that the people who are getting the most "credit" as you put it are by and large the same small group of people who make the rules for who gets the credit. "Bankers" is a convenient popular label for those people even though most of them don't actually work at banks.
- deleted 6y ago
  [deleted]
spamizbad 6y ago
I am reminded of Sagan's standard "Extraordinary claims require extraordinary evidence" Has been there been any detailed breakdown of how much more effective the median CEO in 2020 is over the median executive in 1970? I am certain they are doing things better, have more data, etc but what scale are we really looking at here? Because, just thinking out loud here, the bulk of the workforce in the United States is more educated and has more hard skills than their predecessors did in 1970s. Firms demanded technology skills, for which they provided little or no training, and their workforce was able to acquire the necessary skills.. and yet the "upside" was nothing more than possibly being able to keep their job.
- robertlagrant 6y ago
  First demonstrate that it's an extraordinary claim. Effectiveness isn't the measure, exactly, it's how replaceable the CEO is, and the same is true of any employee. If everyone is more educated (and education may be nothing to do with what's required, incidentally), then people are still just as replaceable. I have no good answers, as I definitely think there are pros and cons to modern executive teams, but it starts with replaceability.
  - jonathankoren 6y ago
    You're in luck! This study has been done[0]... repeatedly. CEOs since 1978 have been found lacking. Think about it. CEO compensation has gone up 970% since then.[1] The key takeaway is that that boards set the compensation based on the average compensation CEOs at peer companies, but performance isn't equally distributed. Essentially, the highest performing CEOs pull up the mean, and so the average and below average CEO compensation goes up. [0] https://www.wsj.com/articles/ceo-pay-and-performance-dont-match-up-1526299200 https://www.wsj.com/articles/ceo-pay-and-performance-dont-ma... [1] https://www.epi.org/publication/ceo-compensation-2018/ https://www.epi.org/publication/ceo-compensation-2018/
  - dlp211 6y ago
    I would assert that CEOs are far more replaceable then they would have you believe.
- LoSboccacc 6y ago
  It's not the CEO that became more effective tho, it's the money. You can't do a Tesla without PayPal exit level of money, you can't do a PayPal without zip2 exit money and you can't make a zip2 without a real estate agent footing the initial bills It's financial levers all the way down
- neutronicus 6y ago
  Maybe people only listen to decision makers who make a fuckton of money, and maybe the effect has grown over time (like the Placebo effect). In that case even if all CEOs are equivalent getting hired is a lottery ticket

lisper 6y ago

> The real difficulty is in deciding who "gets credit" for producing a given thing. Exactly. The situation we currently have is that the people who are getting the most "credit" as you put it are by and large the same small group of people who make the rules for who gets the credit. "Bankers" is a convenient popular label for those people even though most of them don't actually work at banks.

deleted 6y ago
[deleted]

spamizbad 6y ago

I am reminded of Sagan's standard "Extraordinary claims require extraordinary evidence" Has been there been any detailed breakdown of how much more effective the median CEO in 2020 is over the median executive in 1970? I am certain they are doing things better, have more data, etc but what scale are we really looking at here? Because, just thinking out loud here, the bulk of the workforce in the United States is more educated and has more hard skills than their predecessors did in 1970s. Firms demanded technology skills, for which they provided little or no training, and their workforce was able to acquire the necessary skills.. and yet the "upside" was nothing more than possibly being able to keep their job.

robertlagrant 6y ago
First demonstrate that it's an extraordinary claim. Effectiveness isn't the measure, exactly, it's how replaceable the CEO is, and the same is true of any employee. If everyone is more educated (and education may be nothing to do with what's required, incidentally), then people are still just as replaceable. I have no good answers, as I definitely think there are pros and cons to modern executive teams, but it starts with replaceability.
- jonathankoren 6y ago
  You're in luck! This study has been done[0]... repeatedly. CEOs since 1978 have been found lacking. Think about it. CEO compensation has gone up 970% since then.[1] The key takeaway is that that boards set the compensation based on the average compensation CEOs at peer companies, but performance isn't equally distributed. Essentially, the highest performing CEOs pull up the mean, and so the average and below average CEO compensation goes up. [0] https://www.wsj.com/articles/ceo-pay-and-performance-dont-match-up-1526299200 https://www.wsj.com/articles/ceo-pay-and-performance-dont-ma... [1] https://www.epi.org/publication/ceo-compensation-2018/ https://www.epi.org/publication/ceo-compensation-2018/
- dlp211 6y ago
  I would assert that CEOs are far more replaceable then they would have you believe.
LoSboccacc 6y ago
It's not the CEO that became more effective tho, it's the money. You can't do a Tesla without PayPal exit level of money, you can't do a PayPal without zip2 exit money and you can't make a zip2 without a real estate agent footing the initial bills It's financial levers all the way down
neutronicus 6y ago
Maybe people only listen to decision makers who make a fuckton of money, and maybe the effect has grown over time (like the Placebo effect). In that case even if all CEOs are equivalent getting hired is a lottery ticket