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Um... So if I understand you correctly, you're saying that the problem isn't that CEOs are paid too much, but rather that they're asked to do the wrong thing.
First of all, I don't really think the CEO is the problem either, per se. The deeper problem is the way companies are structured, and how the profit motive is seen as the only reason for a company's existence. In the US, it's even part of the law that a company must maximise shareholder profit, which I think it's absolute lunacy. On this point it sounds like we agree.
However, if CEOs continue to receive their outlandish salaries at the expense of the remaining employees of the company, how is that not a problem? It get the impression that you don't think there's any correlation between top executive salaries and those of the remaining employees, but I don't see how you can think that. Within a corporation, the amount of profit quite clearly IS a pie, out of which salaries must be divided.
You used the example of McDonald's earning several billions, while "only" paying their CEO $21m. This is indeed the case for McDonald's, but clearly a certain amount of their budget is allocated to salaries, and if CEOs receive a disproportionate amount of that budget, it has a real effect on their other employees' wages. Furthermore the CEO is NOT the only executive receiving a much higher wage than the lower employees. The average McDonald's executive compensation is $235,641 a year. Accepting ludicrous salaries for executives as a fact of life merely propagates this inequality.
Of course it would be better if companies spontaneously decided to make a better world, and stop focusing exclusively on profits, but what makes you think there's any chance that would ever happen all on its own? And don't you think people in power (i.e. in part CEOs) have any influence on whether or not that happens?
Maybe, for example, limiting executive pay to a certain multiple of the salary of their lowest paid employees is an imperfect solution, and certainly it does nothing to fix the deeper problem of company structure, but it would probably have the effect of raising the lowest salaries. How is this not important in its own right?
You don't like the solutions proposed in this article, I take it. So far, I don't think I've seen any proposed solutions coming from you, so what would you prefer?
I think you're also missing a rather important point of the article; that billionaires also end up with POLITICAL power due to their massive wealth. I personally think that's the most important aspect; these people have enormous power and influence, which is completely democratically illegitimate.
Personally, I broadly agree with this article. I don't have any particular comments on it. However, I have comments on a few things you guys have said in the comments. I'll reply to multiple people in this single post.
First of all, I guess I should disclose that I'm European, so many of your American views are very foreign to me, and many (most?) other Europeans. A lot of the things you guys take for granted we view as patently false. You probably will feel similarly alienated by many of the things I will say. Therefore, I hope you can try to give my points the benefit of the doubt, rather than dismiss them out of hand simply because they don't agree with your established worldview.
Now, to the specific points:
- This system just works. If it didn't, they wouldn't receive the pay they do.
On this point, I almost could not disagree more. People are not paid solely according to how useful they are. If they were, scientific researchers would be paid more than stock brokers, not to mention nurses or teachers.
A major determinant of someone's salary is POWER. CEOs have a lot of power, and they know powerful people. They run in circles with people who can give them high paying jobs, and they can heavily influence how much their salary will be, simply by being in the right position.
I'm not saying that someone's performance isn't linked to their salary, of course it is. But nobody performs 300 times better than an average person.
- Committees are not efficient or effective forms of leadership for many types of organizations.
Maybe so. But I would argue the opposite in many, many cases. The fact is that a single person cannot possibly understand everything that's going on in a large organisation. Therefore, they can easily end up making poor decisions simply because they have imperfect information. Beyond purely business decisions, they can easily overlook their employees wellbeing because nobody from the lower rung has any possibility to give any feedback to anybody in power. This is not only bad for the employees, it's bad for business. Having unhappy employees will obviously lead them to being less productive.
I'm an engineer. Over my career I have seen ABSOLUTELY TERRIBLE decisions be made by top executives. In some cases, the reason is that they just don't understand what we're doing at a deep enough level (nor could any human being presiding over a large enough organisation), and they don't understand what we need to more effectively do our work. To better deal with such problems, I truly believe it would be better to have more executive power be distributed across the organisation, rather than have a pyramidal hierarchical structure as most companies have now.
- Second, Apple has 132,000 employees. Is it worth $1/month to each of them to have their job? Yes? Ok, then Tim Cook is worth at least $1.5m/year.
Do you think Apple's employees are being given money as a charitable act by Tim Cook? Apple is making FAR more out of their employees' work than they are paying back to their employees. If they weren't they wouldn't be one of the richest companies in the world.
This is the case with pretty much all salaried work in the private sector. People are hired because the company believes that it can earn more money for itself by hiring that person. Not as a favour (except, I would point out, in high paying cushy jobs, where powerful people sometimes hire their powerful friends because they believe they can get something out of it later, maybe a favour back).
- It's not pie; if the CEO gets more, the entry-level clerk does not get less.
This is clearly false. Compare these graphs.
CEO pay correlates negatively with employees' share of the companies' profits. I think this is a bit too obvious to be a coincidence.
To quote an Englishman, whom I think reflects the views of many a European;
'[Some say] the cream cannot help but always rise up to the top. Well I say, "Shit floats" '
- Jarvis Cocker
Honestly, a lot of artists were bad people. I find it ridiculous that I'm supposed to stop consuming someone's art just because they're an asshole. Just because I enjoy the art doesn't mean I endorse their behaviour.
Miles Davis beat his lovers. Picasso was constantly cheating on his wives. I'm sure I could find countless examples if I went looking. Should we just burn all their contributions now? Come on. It's possible, and desirable, to be able to separate between different aspects of the same thing. Artists don't have to be Gods.
Damn, I haven't been following Ocasio Cortez at all, as I don't live in the States, but this has convinced me to pay more attention to her. Very impressive.
The nonsensical part for me was that it sounded like you thought it was wrong for people to do "half measures" that work. If you're just talking about your personal preference, that's a different matter.
Personally I agree that the optimal solution is to have self control, and I do have a fair bit of self control. However, I don't always have perfect control, so I try not to put myself in situations where I'm likely to do something I don't think I should.
The problem is that life can be very stressful, and in general I find it demands TONS of self control. I go to work five days a week, I have to keep my apartment and clothes clean, I have to be polite to people even if I might not like them; in short there's a lot of stuff I have to do that I don't really feel like doing. I find this pressure keeps building as I get older.
I don't need some extra source of temptation around to challenge my self control, I already exercise enormous self control just living life.
I find that to be a pretty nonsensical point of view. Your issue seems to be about purity, only "true self control" is good enough to be worthy, it's either that or complete abstinence.
Why? What makes you say that the box accomplishes nothing? What's wrong with a practical solution that doesn't involve true mastery of the self? Most of us aren't Buddhist monks.
If not keeping chocolate at home helps you not overindulge with chocolate consumption, what's wrong with doing that? Are you suggesting someone should only eat chocolate if they're able to keep it in their house without eating it on impulse?
So your issue with the "box" idea is that it doesn't go far enough?
You think hamstringing your technology shows a lack of self control, but getting rid of the technology altogether doesn't? Doesn't seem like a consistent view to me.
- We were predisposed to thinking direct manipulation was sort of a panacea.
“Panacea.” Wow, what a word.
Unbelieveable. What an absolute twat.
The interview itself is reasonably interesting, though.
Pretty stunning stuff, actually.
I'd somewhat reversed my opinion on McCain since he last ran for president (at which point I thought he was a piece of shit), since I'd seen him say some sensible things in various speeches and interviews. I thought he seemed like a good guy who'd had to represent some reprehensible views in order to stand for the republican party.
Judging by this article, it was just another case of a politician saying some nice fluff in public while mercilessly working against the public good in the background. The whole Keating thing is absolutely astonishing.
And yet all we hear about in obituaries is that he was such a principled and great man, even from Obama. The term obsequious doesn't even begin to describe the media.
Interesting story. I actually thought it was real for a little bit, but then something tipped me off and made me look into dayjobs, and I realised it was fiction.
Reminds me a bit of the concept of neurolinguistic programming from Snowcrash. Combining that with the singularity, I guess.
It's a bit long-winded towards the end, but I enjoyed the ride.
Seems pretty fucking dodgy.
Somehow I think Trump will be able to weasel his way out of this, but then again when the FBI is working on a case as high-profile as the possibly treasonous past of the fucking POTUS, this really could go either way.