I never intended to suggest that it was that simple. The CEO was as an example of inequality that seemed to be the focus of the discussion. As I suggested, there is much argument where the optimal inequality is to maximize overall marginal utility while at the same time not stifling ambition and even if that was solved I don’t have a solution to get us from here to there.
And if the taxes for these top tier CEO’s went to 90% would they sit on the side lines because they are bringing home (only) 3 million a year?
I’ll check out Gretchen Morgensen, a quick search says she’s a journalist though. Any academic work you could point me to?
Also, if there are conflicts of interest in determining CEO pay of private companies, I see it primarily as a principal-agent problem. Regulation could ask for greater disclosure to help shareholders decide perhaps, but I don’t see it as a problem for society at large.
And sure globalisation is global, but you perhaps fail to take into account how successful US companies are. Most of the biggest corporations in the world are American. And much of that success has to do with leadership. I’m sure some CEO pay is undeserved and there are examples of malpractice, but it isn’t hard to argue that CEO pay is at the level it needs to be either. In addition to the factors I pointed to earlier, good leaders have a disproportionately large impact on their organisations, and as a result they are exceedingly valuable, but at the same time difficult to a priori determine the value of. Boards don’t know whether they’re getting Steve Jobs or a dud, but they have to pay enough to attract Jobs.
And if you think it’s unhealthy that kids/people should dream, then I don’t agree with your viewpoint. They should dream and work towards their dreams, and maybe at some point learn to reconcile themselves with not realising them, but to not dream at all?
Here’s one argument I haven’t seen touched on: For a society to be, in any meaningful fashion, a society, people in it have to identify with and relate to each other. They have to view the other members of the society as, in some fashion, their peers. They have to view those people as ON THEIR TEAM at some fundamental, tribal, level.
I think sufficient income inequality interferes with that. Imagine a town in which the poorest person is a janitor who makes $20,000 a year and lives in a small house and drives a used car; and the richest person is a banker who makes $450,000 a year, and lives in a large house, has two new cars, and has a cottage he owns up in the hills with some land by a lake and the cottage is nicer than the janitor’s home. Now, that banker is a LOT richer than the janitor by any practical standard. But their lives are at least comprehensible… both have jobs, both live in the town, they might well send their children to the same public high school, they’ll occasionally eat at the same restaurant (a super special treat for the janitor and a typical lunch for the banker), etc. But the next town over, the poorest person is a part time farm laborer who makes $8,000 a year, and the richest person is a CEO who makes $12 million a year. The farm laborer lives in an attic that he rents from a cousin, doesn’t own a car, is on food stamps, and has to get handouts to get clothing for his children. The CEO lives in a gated community outside town and flies around in a helicopter.
Now, imagine both of these towns being hit by tornadoes. In which town are the citizens of the town more likely to band together and help each other out in an emergency? Which town is more likely to have an active PTA? Which town is going to be more of a real community?
Nothing wrong with income equality, as we are not all equal EXCEPT before the law.
There is a need for a minimum level of lifestyle we should expect a fully employed person to be able to enjoy. This means our janitor should be able to have a place to live (not necessarily own), food on the table, healthcare at a certain level, and education for the kids.
There is a need for an achievable middle class, that comes into play with owning a home and more frills.
Finally, there is nothing wrong with the lifestyles of the rich and famous, as long as the system allows for new entrants on a regular basis (and people falling out in the same fashion). For every Mark Zuckerberg, you get an MC Hammer going bankrupt.
Relative deprivation: It’s true that relative deprivation can affect someone’s sense of well-being. However, I can definitely see why others should pay for someone not to starve of freeze but if someone is unhappy because others have flat screen TVs and he doesn’t, my cold, stone heart doesn’t see why someone else should pay for it.
A sense of well-being affected by relative deprivation has to do with jealousy and status-seeking. When a millionaire suffers from jealousy and status-seeking toward billionaires, that’s his psychological issue to work with, it shouldn’t be someone else’s burden, right? The rich man and the poor man who suffer from jealousy and status-seeking have the same flaws. They should turn on, tune in and drop out.
Too much inequality: I can see why there could be such a thing as too much inequality. I can think of some but I’d like to know of what you think of when you mention difficult barriers to social mobility born out of too much inequality.
There is little relationship between the amount of money spent on a public school system and the results. If the government is to reduce economic inequality, and I believe it should, it should do so directly with laws to strengthen labor unions, and raise the minimum wage. There should be a well financed public sector of the economy paid for by steeply progressive taxation.
For at least a generation the people who own and run the United States have been exporting good jobs while importing cheap labor. When American manufacturers move manufacturing to low wage countries and sell what it produced in the United States, they should pay high tariffs on it. In addition we need to crack down on illegal immigration, and curb legal immigration and H1B Visas.
When Vladimir Lenin established his government he was somewhat embarrassed to pay himself and his top advisers twice what factory workers were earning. Then he discovered that a modern economy requires trained and talented experts, and that most of them will not work to the best of their abilities unless they are paid more than he was paying himself.
A certain amount of inequality is necessary. Nevertheless, beyond a certain point it becomes dysfunctional. Latin America has always been known for a high degree of economic inequality. It has never been known for economic growth and technical advances.
I’m not suggesting that one should sympathize with it. It is an explaination of why people do not of necessity feel better off even if they are in fact materially better off.
I do not necessarily think it ought to be characterized as “jealousy and status-seeking” so much as having a basis of comparison as to what is “normal” or “well off”.
The harm that it does is that it can do damage to social cohesion.
Sure. Such things as barriers to entry to higher education spring to mind.
This is not only reflected in such things as fees for higher education that the parents of the wealthy can more easily afford, but mores subtley in such matters as demands that applicants be “well rounded” which parents of the well-off can more easily create by paying for lessons, sports, etc.
Through such mechanisms, social inequality can be perpetuated - albeit not deliberately.
Everyone is not capable of doing college level work. Everyone that obtains an undergraduate degree is not capable of doing graduate level work. There are limited seats in college classes, and even more limited seats in graduate schools. Those seats should go to those most capable of completing the course and getting the degree.
A person that struggled academically at the high school level is unlikely to succeed at the college level. A person that struggled academically in college is unlikely to succeed at the graduate level. A person that can’t cut the mustard at the graduate level should be washed out before graduation. You do not want your heart surgeon to be the guy that got his degree in some misguided liberal’s attempt to force equal outcomes…you want him to know what the fuck he is doing.
People who shouldn’t go to college include the children of the rich who get in by legacy. They do not include the children of the poor who are smart enough to go but can’t afford it - not just because of tuition, but because of deferred income.
And enough of this “liberals want the local moron to be a heart surgeon” shit, okay, because it is very, very stupid.
How many of those legacy students are truly incapable of doing college level work? I’ll be wanting a cite with hard numbers to back up whatever you claim.
There are numerous sources of financial aid available for poor but deserving students. Pell Grants, scholarships, student loans, work-study, military tuition assitance programs, etc. Anyone that really wants to go and can actually do the work can probably find a way to go. Maybe not to an Ivy League school, but at least to an accredited community college or state university.
When you buy this board, you can tell me what I may post. Until then, not so much.
That’s the question, isn’t it? What if one slight proportion of the population is accruing wealth at a dramatic rate and the rest are at best flatlining? What if the majority of the population has to have multiple wage earners and to assume greater and greater levels of household debt to maintain a fairly average standard of living?
And what if those accruing wealth at faster rates use their power to manipulate tax codes and tax enforcement efforts to actually increase the disparity in wealth over time?
Do you really think such a system is sustainable? Do you really prefer having nearly three quarters of mothers of children under 18 working? Do you reallly prefer having household debt of 120% in this country?
At some level, it really should become more about the society that you hope to realize than about whether Joe merits a 60 inch television and Larry does not.
What I am saying is that financial barriers to entry (direct or indirect) may prevent a person who is otherwise intelligent and capable from obtaining an education at the level he or she would have obtained, had the financial factor been equal.
Over time, this can result in a cycle that creates self-perpertuating inequality. Rather that the best person becomming a heart surgeon, the person who gets to be a heart surgeon is the best out of … the rather smaller pool of people whose families go to the right clubs, etc.
The guy will probably be an okay heart surgeon, maybe even the best, but it is not the optimal outcome. Individuals who cannot compete, not because they lack talent but because they lack family money, are obviously disadvantaged; but more to the point, society is the poorer for the loss of talent caused by the fact that the best candidates are not drawn from the whole of the population.
Hence, extremes of inequality damage the meritocracy that gives rise to justifiable inequality in the first place.
True, but as long as you keep making it, we are free to ignore it, and thus discount the rest of your argument.
Oh, and I don’t want people rewarded for success. I’d much rather live in a society where successful people were only that way because they cared for society as a whole. Capitalism is a necessary evil because most people are evil. Thus the minimal amount of reward we can give and keep these evil people from just sitting on their asses is all I think we should do.
And if that minimal amount is not enough for you, then here’s the door. There’s someone under you ready to take your place.
And don’t think we’re going to stop taxing you just because you quit, either. If you make the same amount of money on the market or even from a bank, it gets taxed the same as if you made it through work, perhaps even a bit more.