From: Charlie Stross (charlie@antipope.org)
Date: Sat Sep 01 2001 - 03:14:59 MDT
On Fri, Aug 31, 2001 at 11:40:31PM -0700, Spike Jones wrote:
>
> Bosses' pay soars but not workers'
>
> WASHINGTON -- When last I took a Labor Day occasion to compare the
> average American workers' paychecks to those of their bosses, the score
> was 1 to 419. That was two years ago.
>
> Olga Bourlin wrote: What would the libertarian solution be for
> something like this? (Is there a solution?)
>
> Is there a problem? spike
Three problems, actually.
The corporate problem: bosses are supposed to run companies for their
shareholders, not for their own pockets. Private companies: the bosses
_are_ the shareholders, so that's okay. But these figures point to
the executives of public corporations ripping off their shareholders.
The social problem: a widening gap between the remuneration of the
bosses and workers is divisive and encourages social unrest. A lot of
people don't see how some guy sitting in an office for the 40 hours of
the week when he isn't on the golf course can be doing something worth,
say, a million bucks a year, when similar guys down on the shop floor
are bending metal and producing goods for a fiftieth of that. The root
of this social problem is that the marginal value of money declines as
you acquire more. (The difference a thousand bucks makes to you if you
already have $100K is minimal compared to the difference it makes if
you have only $5K.)
The economic problem: our economy needs consumers with disposable incomes
to keep buying goods to keep the companies in business. Impoverished
workers don't buy goods. The economy therefore has a smaller market.
By giving the workers more money to spend, in the broader picture,
bosses can expand the overall size of the market (and ultimately reap
bigger long term rewards).
-- Charlie
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