found online by Raymond
From libertarian Michael A. LaFerrara:
Economic inequality is indicative of capitalism’s greatest virtue; that people are free, through work and trade, to individually prosper as far as their ability, ambition, values, goals, personal circumstances, and moral character will carry them.
Prospering through work, no matter how great or modest the level of wealth, comes not to the detriment but to the benefit of others. Prospering involves trade, and trade involves a win-win outcome—the mutually beneficial exchange of value for value. It necessarily follows that personal betterment involves the betterment of everyone one trades with. The level of a person’s earned wealth correlates to the value added to the economic lives of others.
Typical libertarian screed — all theory and no data.
Jeff Bezos had, last time I heard, a net worth of $108 billion. That is probably, at a rough guess, a million times the net worth of a typical American. Has Bezos worked a million times as hard as the average person in this country?
The average US corporate CEO makes about 400 times what his workers make; in Japan the same ratio is only about ten to one. Are American CEOs really 40 times better at their jobs than Japanese ones? Do they add 40 times as much value to the lives of the people they deal with?
What benefit have the Koch brothers done to other people to justify their enormous wealth?
I have worked at places where the CEO position was vacant for as long as a year, with no apparent effect on the functioning of the company. If every CEO in the US went on strike for one month, and every garbage collector in the US went on strike for one month, which strike would actually have more impact on most people’s lives?
If wealth correlated with the benefit and value added to the lives of others, medical researchers would be billionaires and vulture capitalists would be begging on street corners.
The fact is, the structure of corporate capitalism enables some people in positions of power to exploit their power to accumulate vast wealth, mainly at the expense of the employees who produce that wealth. Once a person has reach such a position, further hard work or benefit to others has very little to do with the outcome.
It hadn’t occurred to me to compare the pay of US CEOs to the pay of CEOs from other countries specifically to counter the argument that our CEOs deserve their pay because of the “value” that they bring to their businesses. I will have to use that.
Unbelievable. He always manages to outdo himself, doesn’t he?
Economic inequality begets political, legal, and social inequality, and is also indicative of feudalism, aristocracy, monarchy and dictatorships, so it’s all good.
Now stop questioning your superiors and get back in the mud, peasants! We can, and will, make it worse for you.
LaFerrara states:
“The level of a person’s earned wealth correlates to the value added to the economic lives of others.”
and
“To become wealthy is to create the most value for the most people. ”
This could perhaps be said of a business in a perfect libertarian state under a certain understanding of economic value, but it’s not true of people within a business in the real world. The underlying, erroneous assumption here is, once again, that people behave rationally or in an economically or fiscally ideal manner. There is no perfect formula to determine employee pay (especially on an individual basis) and no perfect method for evaluating the impact that his actions have on his business, except perhaps in pure sales.
Even if there were such a formula, it’s not as if every business would use it. Indeed, if a business determined that an employee generated $300k in value but knew that it could keep him around by only paying him $30k, it probably would. These are actually rather strange things even for a libertarian to say precisely for that reason. In reality, pay is determined by a number of factors that are not even consistent across every business.
(What I have heard from other libertarians is that people are paid what they are worth, where what one is worth is determined by whatever employment contract he signs. In other words, one’s value potential is somewhere between the lowest amount one is willing to work for and the highest amount another is willing to pay him, only actualized upon the agreement. This take on value is pretty much a tautology:
Why is he worth $50k?
Because that’s what we pay him.
Why do you pay him that?
Because that’s what he’s worth.)
Additionally, since one can become wealthy through inheritance, good fortune, good investments, or by being given money by just a few rich donors, the idea that wealth reflects the creation of “the most value for the most people” isn’t even close to being right.