| | Good piece, Ed.
This week in a national referendum, 65 percent of Swiss voters rejected a measure that would have limited CEO salaries to twelve times the pay of junior employees. This is funny when it is conceptually unpacked (to see what is "inside"). What does it mean to limit CEO pay to 12 times the pay of junior workers? On a standard of equity (proportional equality), it means that someone, somewhere came into possession of the knowledge that the ideas and efforts of a CEO are no more than 12 times as valuable to either the bottom line -- or to some unspoken-of ideal -- than is the ideas and efforts of either a randomly-sampled junior employee, or the average of all junior employees.
How did the bureaucrat get himself into the epistemological position to be able to determine that the CEOs are not contributing more than 12 times the benefits (either to the company, or to the mysterious, unspoken-of standard) of junior employees?
The final battle (i.e., the war) will be won on abstract, moral grounds -- i.e., when capitalism is demonstrated to be morally superior to all alternatives -- but let's not let these collectivists claim even partial victories: Even on their own terms, they are wrong. Ludwig von Mises used the phrase: "contrary to purpose" in order to describe socialist action plans -- because the action plans have the opposite of their intended effects. An example is the minimum wage, which hurts wages. Another is a cap on the price of milk, which makes milk more expensive. Other examples abound.
Under the assumption that equality is moral (merely for the sake of argument), in order to get into the position to argue that equity demands that CEO pay is capped to 12 times that of junior employees -- then the socialists should have to offer evidence indicating that. What would that evidence look like? It would have to show that the ideas and efforts of CEOs aren't deal-makers/deal-breakers in and of themselves (i.e., that the company could do just fine losing a CEO, as long as he is replaced by 12 junior employees).
Fat chance of ever demonstrating evidence of that!
Ed
(Edited by Ed Thompson on 12/07, 8:56am)
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