This AlterNet article decries massive paydays C-level high tech executives, hedge fund managers and start up founders get in high-profile, record-setting deals.
The writer compares massive earnings these people get to how many teachers that money could hire, presumably asserting that buying more teachers is a better way to spend that money.
I’m struggling to see the merit in this article. Here’s why:
1. Entrepreneurs and investors don’t pay for assets, they pay for value. In capitalism, value can be measured. It is measured by what someone is willing to pay for something. Sometimes, value commands astronomical prices. That’s why a painting can sometimes command hundreds of millions. So when an iPhone app sells for billions, it’s about the value the buyer perceives. If we valued education more in capitalism, we’d pay teachers more. Sad but true.
2. High C-level salaries are old news. Abundant evidence already points to the revolving door between corporate boards and C-level positions. Salaries like the ones this writer decries are you-scratch-my-back,-I’ll-scratch-yours deals. Yes, they’re egregious. But even these are deals made according to the rules of capitalism.
3. Hedge fund managers are another story. Creating wealth by creating no tangible value (I realize this statement conflicts with my point 1) through financial manipulation that amounts to gambling is immoral IMO. And yet, these people too are playing by the rules of the game. Can we blame them?
Until we realize capitalism allows these outcomes, we’ll see even greater sums being created to “buy” value. Complaining about it will change nothing. Doing something will be tough – it’s the best system we have designed so far (it’s mixed version) – but not impossible. A new system better be as good or better. In the meantime, it’s tough for me to decry people receiving massive incomes by playing by the rules. Hate the game, not the player.