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> I believe it too, that one person could be 100 times as productive as one other. But what the salaries are saying is that one CEO is more productive than all

> I believe it too, that one person could be 100 times as productive as one other. But what the salaries are saying is that one CEO is more productive than all those 100 people below him put together. We're not interested in the case where one person is 100x more productive than another because the second person is watching youtube. If the CEO is 100x more productive than the average person working for her, then she is, in fact, more productive than 100 of the people working under her put together. That's exactly what that statement means. And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid. Is she being paid for her contacts? It doesn't matter, so long as she's steering the company in the right direction. You're implying that "having contacts in the right places" is corruption, but it's not; knowing what to build and who to sell it to is a big part of running a company. CEO's don't spend their time conniving in smoke-filled rooms, they spend it trying to push their company forward. Rich people don't get that way without providing something people want. Wal-Mart may or may not be lowering the quality of products nationwide, but what they're demonstrably doing is providing goods to people at great prices that let them generate a lot of profit. That's something people want, whether or not you agree with them. The RIAA, on the other hand, is a symptom of the power of the music industry - and the way the music industry got to have so much power, and so much money, is by providing music that people wanted to listen to enough that they paid for it.

begurken 14y ago
"And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid." That is classic circular logic. According to this, it is impossible for any CEO to be overpaid.
krichman 14y ago
> And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid. He's only 100x more if you measure productivity entirely in money. I'm not implying corruption, I'm saying it's separate from productivity.
- crntaylor 14y ago
  Read what you quoted. Karazamov didn't say that the hypothetical CEO is 100x more productive, he said that he/she is worth 100x more.
carsongross 14y ago
"And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid." Oh, the babe! Oh, the pure, innocent child!
- Calamitous 14y ago
  When did HN turn into Reddit?
jleader 14y ago
"Rich people don't get that way without providing something people want." Well, to be precise, some ancestor of the rich person at one time provided something (some) people wanted. Not all rich people are "self made", even if you accept that silly phrase at face value. For that matter, what about successful criminals? There have definitely been people who got rich through fraud, or extortion.
iansimon 14y ago
Alternative hypothesis: http://en.wikipedia.org/wiki/Tournament_theory http://en.wikipedia.org/wiki/Tournament_theory
mbrock 14y ago
Do you have a definition of "more productive" that doesn't boil down to "gets paid more?"
BariumBlue 14y ago
I think the way to think about them is not so much as the CEOs actually producing anything, but being more of a productivity multiplier rather than adding to productivity linearly (an engineer). In this way, they can increase productivity by the equivalent of 100 engineers, without directly being as "productive" as 100 engineers.
jellicle 14y ago
> Rich people don't get that way without providing something people want. Thanks for the laugh. So what did the six Walmart billionaire heirs provide?
- snowwrestler 14y ago
  Nothing, obviously, but most people who are rich in the U.S. did not inherit their wealth.
  - analyst74 14y ago
    That may be true in the past, but according to study, who your parents are matters more in US than in most other developed countries. http://en.wikipedia.org/wiki/Social_mobility http://en.wikipedia.org/wiki/Social_mobility
    - snowwrestler 14y ago
      Factors that improve social mobility are not the same thing as inheriting an immense wealth. Bill Gates benefited tremendously from the good financial position of his parents, but his immense wealth came from his own work starting and building Microsoft.
- squozzer 14y ago
  They provided their parents with some happiness and peace of mind. Maybe.
rollo_tommasi 14y ago
>And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's >being paid. This may be true in the perfectly free market you encountered in your Microecon 101 textbook, but like the perfectly frictionless spheres from freshman physics, that is not an assumption that can be applied to the real world.

begurken 14y ago

"And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid." That is classic circular logic. According to this, it is impossible for any CEO to be overpaid.

krichman 14y ago

> And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid. He's only 100x more if you measure productivity entirely in money. I'm not implying corruption, I'm saying it's separate from productivity.

crntaylor 14y ago
Read what you quoted. Karazamov didn't say that the hypothetical CEO is 100x more productive, he said that he/she is worth 100x more.

carsongross 14y ago

"And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's being paid." Oh, the babe! Oh, the pure, innocent child!

Calamitous 14y ago
When did HN turn into Reddit?

jleader 14y ago

"Rich people don't get that way without providing something people want." Well, to be precise, some ancestor of the rich person at one time provided something (some) people wanted. Not all rich people are "self made", even if you accept that silly phrase at face value. For that matter, what about successful criminals? There have definitely been people who got rich through fraud, or extortion.

iansimon 14y ago

Alternative hypothesis: http://en.wikipedia.org/wiki/Tournament_theory http://en.wikipedia.org/wiki/Tournament_theory

mbrock 14y ago

Do you have a definition of "more productive" that doesn't boil down to "gets paid more?"

BariumBlue 14y ago

I think the way to think about them is not so much as the CEOs actually producing anything, but being more of a productivity multiplier rather than adding to productivity linearly (an engineer). In this way, they can increase productivity by the equivalent of 100 engineers, without directly being as "productive" as 100 engineers.

jellicle 14y ago

> Rich people don't get that way without providing something people want. Thanks for the laugh. So what did the six Walmart billionaire heirs provide?

snowwrestler 14y ago
Nothing, obviously, but most people who are rich in the U.S. did not inherit their wealth.
- analyst74 14y ago
  That may be true in the past, but according to study, who your parents are matters more in US than in most other developed countries. http://en.wikipedia.org/wiki/Social_mobility http://en.wikipedia.org/wiki/Social_mobility
  - snowwrestler 14y ago
    Factors that improve social mobility are not the same thing as inheriting an immense wealth. Bill Gates benefited tremendously from the good financial position of his parents, but his immense wealth came from his own work starting and building Microsoft.
squozzer 14y ago
They provided their parents with some happiness and peace of mind. Maybe.

rollo_tommasi 14y ago

>And, anyway, whether or not the CEO is 100x more productive, her output is worth 100x more. How do we know? Because that's what she's >being paid. This may be true in the perfectly free market you encountered in your Microecon 101 textbook, but like the perfectly frictionless spheres from freshman physics, that is not an assumption that can be applied to the real world.