4 ms·

> The average person doesn't like to inhabit the Hobbesian reality that CEOs do, where they're accountable for results and any bad things happening are automat

> The average person doesn't like to inhabit the Hobbesian reality that CEOs do, where they're accountable for results and any bad things happening are automatically their fault Does this actually happen though? I'm not sure I've ever seen a President or CEO of a company be held accountable for bad behavior or bad decisions in any meaningful way. Best case scenario, you mess up and get "fired" (with a million-dollar-or-more severance/contract payment attached, or similar in stocks -- enough cash paid out that you can basically retire for life). Worst case scenario, seems to be that you get hauled in front of Congress to answer questions and/or get teased on the internet for a few days -- stuff that has almost no lasting effect.

NoGravitas 5y ago
I'd say the Golden Parachute is closer to worst case. Best case is "failing upward", like so many of these Upper Class Twit of the Year candidates seem to do.
handrous 5y ago
This is similar to why the argument that capitalists are due returns because they take on risk doesn't move me. Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Meanwhile workers will be in deep shit if their company goes under and they don't find something else ASAP. Risk, indeed. The absolute worst-case scenario is that they might have to work for a living? Oh my, what horror. This isn't to say that investors shouldn't make money, I just find this (often presented as) quasi-moral justification for it absurd.
- nostrademons 5y ago
  > Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Why aren't you founding a company, then? Or a cryptocurrency token, or selling NFTs? Or leveraging up to become a landlord on borrowed money? Or hobnobbing with executive recruiters and VCs while setting yourself up as a thought leader? Or raising capital for a hedge fund? These are all things you can do right now, with potentially (but risky) multi-million-$ payoffs. For many of them you don't even need to quit your day job - your employment contract might say otherwise, but the actual work involved can be done on your downtime without them knowing. For most people, the real reason they don't do this is because they're uncomfortable with it. They don't want to inhabit a world of secrets, lies, non-aligned interests, and risk, so they take a job that lets them ignore all that and get paid for doing a specific task according to the specifications of their boss.
  - handrous 5y ago
    I was posting about returns on investment, not entrepreneurship. Some entrepreneurs really are takings significant risks, beyond the risk that the huge numbers in their accounts become somewhat less huge. Some are even taking more risk than their employees. Investors generally are not—again, their most-likely failure state is still being rich and in the absolute worst-case they lose enough that they have to actually work for their income... like everyone else. Their absolute worst (but unlikely) case looks suspiciously similar to most folks' best (likely) case: a well-paid, fairly well-respected (among we mere plebs, anyway) job. They are taking on a great deal of risk in one sense, but are hardly taking on any in another, arguably more meaningful, sense. I've repeatedly seen people use risk to justify returns on capital in relation to wages—but the risk is all bullshit, in many cases. Again, I'm not claiming that investment shouldn't yield returns, but I've seen the "risk" argument used to justify income inequality, while the actual real-world risk workers & capital are exposed to are the inverse of what that would imply. Mine is essentially an argument for the marginal dis-utility of risk, I guess. "Capital deserves a huge up-side for the moral reason that investors take great risk" is a BS argument, IMO, yet one that crops up from time to time. I don't think "deserves" has anything to do with it, and I don't think that framing holds up to any amount of scrutiny. The reason this was relevant is that you see similar arguments for why CEOs are so well-compensated—"if things go poorly, they'll see the consequences for it!" Except the "consequences" (short of actually criminal activity, and even then, see e.g. Wells Fargo) look an awful lot like what would be a life-changing-for-generations windfall for normal folks. Their worst day, after all of the shit has hit all of the fans, would be 99+% of people's best day of their life. So... is that, meaningfully, risk that justifies crazy-high compensation? My objection isn't even that the compensation is high, but the way supposed risk is used to justify it. Their compensation is, for a bunch of reasons, a fact, but I don't think "it's fair because they take on so much risk" is even a little valid. More likely is that it's not, by many folks' reckoning, anywhere near "fair", and that's just how the system, and perhaps life, is. Investment is, largely, similar, once you're past the smallest of small-fry investors, or people investing in their own small business ventures. [EDIT] To be clear, I'm not arguing that investors (and certainly not arguing that entrepreneurs, in general) do not expose themselves to risk. Of course they do. Lots of it, by some entirely-reasonable reckoning. Rather, I think the kind of risk makes trying to use that as some kind of moral justification for their returns, to be blunt, extremely dumb.
- passivate 5y ago
  >Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Okay, and somebody who was born in poverty in a low-income country might be happy with far less money than even the lowest wage earner in America. All you're saying is wealth is relative. But we already know that, and it's not really an argument for anything!
  - handrous 5y ago
    It's an argument against justifying CEO pay (or returns on capital) by appealing to what's owed due to the supposed risk taken. I'm saying that not just wealth is relative, but (relatedly, yes) so is risk. The risk your average worker at a megacorp operates under every day is far more meaningful than the risk the CEO, or the idle investor class, takes in their roles, even if the worker's risk is relatively tiny in dollar terms. This isn't even an argument against the compensation itself, but an argument against a particular justification for why it's "right" that things are structured this way, or why it's necessary that they are, which argument is fairly common, but, IMO, laughably weak. Yet you see this argument advanced fairly often, in exactly these terms: "well of course megacorp CEOs are paid millions per year, look at all the risk they take that you don't have to, that's why they're paid the big bucks!" or "it's not just necessary but right that we reward capital, look at all the risk capital takes!" Meanwhile, my oh my, please, give me their "failure" state when that risk is realized.
    - passivate 5y ago
      >The risk your average worker at a megacorp operates under every day is far more meaningful than the risk the CEO, or the idle investor class, takes in their roles, even if the worker's risk is relatively tiny in dollar terms. Okay, and roofers and oil rig workers have far more fatal injuries than software devs, so then the person who works the riskiest job should get paid the most? Personally, I don't think it is a good idea to base an economy that way, but that is a whole another discussion. >This isn't even an argument against the compensation itself, but an argument against a particular justification for why it's "right" that things are structured this way, or why it's necessary that they are, which argument is fairly common, but, IMO, laughably weak. Wait, so if your not against the higher compensation, and you do acknowledge that capital takes at-least some risk, what is your real argument here?
nostrademons 5y ago
Those are the consequences for line-level workers caught doing something bad, too. The company fires you and refuses to give you a good recommendation. Worst case, you might get hauled in front of court to answer questions. The difference is entirely in how people view those consequences. For most line-level workers, getting fired or laid off is a source of intense shame, as well as a big logistical inconvenience. As a result, they'll do almost anything to avoid it, including making bad economic decisions for job security. For CEOs, it's an opportunity to do the same shit to other people. As a result, they have no inhibition toward taking risks that might potentially get them fired, as long as the payoff is worth it. And then part of the reason why CEO searches are so challenging and CEOs get paid so much is that it's hard to find someone who is rational about this - willing to take risks when the payoff is high, but prudent about it so they don't tank the company on a whim.
- burkaman 5y ago
  I'm sorry, are you serious? You think most workers don't want to get fired because of the shame and inconvenience? You can't think of any more significant motivators?
  - handrous 5y ago
    I read that as ironic understatement (though the "logistical" part doesn't seem quite right) but perhaps that's not how it was intended.
    - spurgu 5y ago
      > getting fired or laid off is a source of intense shame, as well as a big logistical inconvenience I read this as that it's inconvenient both from a psychological as well as a practical perspective. You want to avoid shame/guilt, and you want to avoid the hassle of having to run to job interviews, get recommendation letters from old jobs, perhaps move to a new place closer to better employment, get a haircut etc. There are a lot of practical inconveniences to getting fired that could be classified as "logistical". (the above is just my interpretation of what OP said)

NoGravitas 5y ago

I'd say the Golden Parachute is closer to worst case. Best case is "failing upward", like so many of these Upper Class Twit of the Year candidates seem to do.

handrous 5y ago

This is similar to why the argument that capitalists are due returns because they take on risk doesn't move me. Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Meanwhile workers will be in deep shit if their company goes under and they don't find something else ASAP. Risk, indeed. The absolute worst-case scenario is that they might have to work for a living? Oh my, what horror. This isn't to say that investors shouldn't make money, I just find this (often presented as) quasi-moral justification for it absurd.

nostrademons 5y ago
> Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Why aren't you founding a company, then? Or a cryptocurrency token, or selling NFTs? Or leveraging up to become a landlord on borrowed money? Or hobnobbing with executive recruiters and VCs while setting yourself up as a thought leader? Or raising capital for a hedge fund? These are all things you can do right now, with potentially (but risky) multi-million-$ payoffs. For many of them you don't even need to quit your day job - your employment contract might say otherwise, but the actual work involved can be done on your downtime without them knowing. For most people, the real reason they don't do this is because they're uncomfortable with it. They don't want to inhabit a world of secrets, lies, non-aligned interests, and risk, so they take a job that lets them ignore all that and get paid for doing a specific task according to the specifications of their boss.
- handrous 5y ago
  I was posting about returns on investment, not entrepreneurship. Some entrepreneurs really are takings significant risks, beyond the risk that the huge numbers in their accounts become somewhat less huge. Some are even taking more risk than their employees. Investors generally are not—again, their most-likely failure state is still being rich and in the absolute worst-case they lose enough that they have to actually work for their income... like everyone else. Their absolute worst (but unlikely) case looks suspiciously similar to most folks' best (likely) case: a well-paid, fairly well-respected (among we mere plebs, anyway) job. They are taking on a great deal of risk in one sense, but are hardly taking on any in another, arguably more meaningful, sense. I've repeatedly seen people use risk to justify returns on capital in relation to wages—but the risk is all bullshit, in many cases. Again, I'm not claiming that investment shouldn't yield returns, but I've seen the "risk" argument used to justify income inequality, while the actual real-world risk workers & capital are exposed to are the inverse of what that would imply. Mine is essentially an argument for the marginal dis-utility of risk, I guess. "Capital deserves a huge up-side for the moral reason that investors take great risk" is a BS argument, IMO, yet one that crops up from time to time. I don't think "deserves" has anything to do with it, and I don't think that framing holds up to any amount of scrutiny. The reason this was relevant is that you see similar arguments for why CEOs are so well-compensated—"if things go poorly, they'll see the consequences for it!" Except the "consequences" (short of actually criminal activity, and even then, see e.g. Wells Fargo) look an awful lot like what would be a life-changing-for-generations windfall for normal folks. Their worst day, after all of the shit has hit all of the fans, would be 99+% of people's best day of their life. So... is that, meaningfully, risk that justifies crazy-high compensation? My objection isn't even that the compensation is high, but the way supposed risk is used to justify it. Their compensation is, for a bunch of reasons, a fact, but I don't think "it's fair because they take on so much risk" is even a little valid. More likely is that it's not, by many folks' reckoning, anywhere near "fair", and that's just how the system, and perhaps life, is. Investment is, largely, similar, once you're past the smallest of small-fry investors, or people investing in their own small business ventures. [EDIT] To be clear, I'm not arguing that investors (and certainly not arguing that entrepreneurs, in general) do not expose themselves to risk. Of course they do. Lots of it, by some entirely-reasonable reckoning. Rather, I think the kind of risk makes trying to use that as some kind of moral justification for their returns, to be blunt, extremely dumb.
passivate 5y ago
>Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Okay, and somebody who was born in poverty in a low-income country might be happy with far less money than even the lowest wage earner in America. All you're saying is wealth is relative. But we already know that, and it's not really an argument for anything!
- handrous 5y ago
  It's an argument against justifying CEO pay (or returns on capital) by appealing to what's owed due to the supposed risk taken. I'm saying that not just wealth is relative, but (relatedly, yes) so is risk. The risk your average worker at a megacorp operates under every day is far more meaningful than the risk the CEO, or the idle investor class, takes in their roles, even if the worker's risk is relatively tiny in dollar terms. This isn't even an argument against the compensation itself, but an argument against a particular justification for why it's "right" that things are structured this way, or why it's necessary that they are, which argument is fairly common, but, IMO, laughably weak. Yet you see this argument advanced fairly often, in exactly these terms: "well of course megacorp CEOs are paid millions per year, look at all the risk they take that you don't have to, that's why they're paid the big bucks!" or "it's not just necessary but right that we reward capital, look at all the risk capital takes!" Meanwhile, my oh my, please, give me their "failure" state when that risk is realized.
  - passivate 5y ago
    >The risk your average worker at a megacorp operates under every day is far more meaningful than the risk the CEO, or the idle investor class, takes in their roles, even if the worker's risk is relatively tiny in dollar terms. Okay, and roofers and oil rig workers have far more fatal injuries than software devs, so then the person who works the riskiest job should get paid the most? Personally, I don't think it is a good idea to base an economy that way, but that is a whole another discussion. >This isn't even an argument against the compensation itself, but an argument against a particular justification for why it's "right" that things are structured this way, or why it's necessary that they are, which argument is fairly common, but, IMO, laughably weak. Wait, so if your not against the higher compensation, and you do acknowledge that capital takes at-least some risk, what is your real argument here?

nostrademons 5y ago

Those are the consequences for line-level workers caught doing something bad, too. The company fires you and refuses to give you a good recommendation. Worst case, you might get hauled in front of court to answer questions. The difference is entirely in how people view those consequences. For most line-level workers, getting fired or laid off is a source of intense shame, as well as a big logistical inconvenience. As a result, they'll do almost anything to avoid it, including making bad economic decisions for job security. For CEOs, it's an opportunity to do the same shit to other people. As a result, they have no inhibition toward taking risks that might potentially get them fired, as long as the payoff is worth it. And then part of the reason why CEO searches are so challenging and CEOs get paid so much is that it's hard to find someone who is rational about this - willing to take risks when the payoff is high, but prudent about it so they don't tank the company on a whim.

burkaman 5y ago
I'm sorry, are you serious? You think most workers don't want to get fired because of the shame and inconvenience? You can't think of any more significant motivators?
- handrous 5y ago
  I read that as ironic understatement (though the "logistical" part doesn't seem quite right) but perhaps that's not how it was intended.
  - spurgu 5y ago
    > getting fired or laid off is a source of intense shame, as well as a big logistical inconvenience I read this as that it's inconvenient both from a psychological as well as a practical perspective. You want to avoid shame/guilt, and you want to avoid the hassle of having to run to job interviews, get recommendation letters from old jobs, perhaps move to a new place closer to better employment, get a haircut etc. There are a lot of practical inconveniences to getting fired that could be classified as "logistical". (the above is just my interpretation of what OP said)