Good, thought-provoking book

[Azazello1313]

It is not envy to believe that any political / commercial system must exist in order to provide the maximum benefits for the maximum number. In capitalism, those benefits will always be skewed towards an "elite" of entrepreneurs and sought-after talent and rightly so. It is the proportion of skew that is the danger.

 

you're not really addressing muck's point to just say "it's dangerous." because his point assumes it's dangerous, and it ascribes the reason of envy. why, specifically, would YOU say it is dangerous? if all boats are rising, so to speak, why is it dangerous for some boats to be rising faster than others? I think you have to spell that out to refute muck's point.

 

The difference between the circumstance of the "non-elite" person not being elevated by capitalism's rewards and your stated issues is simple - the former is not voluntary. The diffusion of said rewards are not within the purview of the "non-elite" to change.

 

that's just wrong. it is within ANYONE's power to change their station in life. it may not be their desire to do so, or their primary desire (other desires may well take precedence for them), but the number of people who have no power to change their own allotment is miniscule.

 

There IS a third option and it doesn't involve envy nor does it involve the removal of liberty - it is concern that the historical supports of capitalist success since the Gilded Age are being whittled away in a deliberate and self-serving fashion. If capitalism does not support and elevate the majority, then what is the point?

 

well first of all, I'm not sure what you think is being "whittled away". median real inflation-adjusted income has risen steadily (recession blips aside) over the last century plus, as has the standard of living for nearly every american. you simply can't argue that real income or quality of life has been whittled away, deliberately or otherwise, for anyone, because the facts refute you unequivocally.

 

but let's focus on the argument you CAN make, that the disparity between top and bottom has grown over time. I obviously don't view this in and of itself to be a as big a problem as you do, but I can definitely see how an argument that this inequality is not ideal for democracy might be persuasive. the problem with that is, as best I can tell, every method of "fixing" that problem DOES take away liberty. every time a government has tried to "fix" wealth distribution, the result is more government power, less freedom, and ultimately -- if that government really commits to their "solution" -- less prosperity for all. you can't fix wealth distribution without dragging down the rich, and you can't drag down the rich without making it harder to become rich.

 

ultimately, it comes down to which you value more, liberty or equality*. the two are fundamentally in tension, and pretending they aren't is fantasy. if we push in one direction, we pull away from the other.

 

 

* - and here I mean economic equality, as I would argue that some kinds of equality, such as equality before the law, are hugely beneficial to liberty

[Chavez]

man, that is all just such nonsense.

 

the expansion of the middle class was due to productivity gains.

Then why have productivity gains been decimating the middle class for the past 30 years?

[muck]

Then why have productivity gains been decimating the middle class for the past 30 years?

 

The answer to this is addressed a little bit in the book I'm currently reading (another oldie). This book has quite a bit of very practical stuff in it for people of all faiths (including those with no faith). My mom told me that it dramatically changed her life when she read it 10-15 years ago and suggested I read it with everything I've got going on right now. I'm about 1/2 way through it and am thinking about my priorities in new ways.

[Azazello1313]

Then why have productivity gains been decimating the middle class for the past 30 years?

 

real median household income: 1967-2006

 

where is this decimation?

Edited March 15, 2010 by Azazello1313

[Chavez]

If I make $50k / yr am I envious of the guy who makes $5 mil / yr? What about the guy who makes $75k?

 

If I make $50k / yr, do I think the guy who makes $5 mil / yr is greedy? What about the guy who makes $75k ... is he greedy? Do either of those guys think I'm envious (even if I'm not)?

 

I don't think that "envy" is a word only used by people who are "on top" (or expect to be) and I don't think that "greed" is a word only used by those "on the bottom" (or expect to be there in the near future).

 

Those words, imo, are words that apply to each of us on an individual level and only when we are honest with ourselves. I'd bet that Larry Ellison is envious of Bill Gates's net worth, but I'm not particularly envious of either of their checkbooks. Right now, frankly, if I'm honest with myself, I'm more envious of the guys who are 100% debt free and living in a modest 3br/2ba house free-and-clear and are consistently getting home at 5:30pm to see their family.

I think the person who makes $5 mil (or whatever) is greedy when they are taking massive bonuses despite driving the company into the ground merely to jack up a few more cents per share; I think the person is greedy when their high level of compensation INCREASES while the company's rank-and-file is going backwards in terms of compenstion and/or benefits; I think that person is greedy when they take a golden parachute for however many dollars despite mismanaging the company into a very bad spot.

 

I'm always envious of someone who is, by all evidence, doing a TERRIBLE job yet remains employed.

[muck]

I think the person who makes $5 mil (or whatever) is greedy when they are taking massive bonuses despite driving the company into the ground merely to jack up a few more cents per share; I think the person is greedy when their high level of compensation INCREASES while the company's rank-and-file is going backwards in terms of compenstion and/or benefits; I think that person is greedy when they take a golden parachute for however many dollars despite mismanaging the company into a very bad spot.

 

I think a few things:

 

1) Losing money for a business (or in any investment for that matter) isn't a crime.

2) It's possible to lose money even on fully-vetted decisions. It's also possible to make huge amounts of money on quickly made and ill-informed decisions. Life's like that sometimes.

3) If someone makes a money-losing decision, sometimes it's because it was a bad decision and other times its a good decision that just didn't work out. It's difficult sometimes to tell the difference when applying 20/20 hindsight.

4) I really don't like CEOs getting windfalls on their way out the door of a business that is in worse shape than when they came in...regardless of the reason why it's in worse shape (bad decisions, bad economy, etc).

5) I don't like the idea of CEOs (and their lieutenants) getting hugh $$s if the rank and file are not participating at a similarly proportionate level ... and this all assumes that the shareholder (and creditors) are making out very well, too.

 

...so, I think we're saying something that is at least pretty similar...

Edited March 15, 2010 by muck

[Chavez]

I think a few things:

 

1) Losing money for a business (or in any investment for that matter) isn't a crime.

 

Who is talking about crime? We're talking about one of the 7 Deadly Sins.

 

3) If someone makes a money-losing decision, sometimes it's because it was a bad decision and other times its a good decision that just didn't work out. It's difficult sometimes to tell the difference when applying 20/20 hindsight.

SOMETIMES. I think usually with hindsight you can call it a bad decision, or just bad luck. Of course, if someone's good/decent decision making has a run of bad luck...well, them's the breaks.

4) I really don't like CEOs getting windfalls on their way out the door of a business that is in worse shape than when they came in...regardless of the reason why it's in worse shape (bad decisions, bad economy, etc).

5) I don't like the idea of CEOs (and their lieutenants) getting hugh $$s if the rank and file are not participating at a similarly proportionate level ... and this all assumes that the shareholder (and creditors) are making out very well, too.

 

One of the more interesting ideas I've heard for "capping" compensation* isn't a cap at all - it's merely putting a "cap" that says the top salaried/compensated person can ONLY make, say, 100 times what the lowest paid worker in the company makes. So if Joe Q. Exec wants a pay raise from $1.5 million to $3 million because he thinks he's doing an awesome job, well, then Jose the 3rd shift janitor just got his salary doubled as well. A rising tide lifting all boats, so to speak.

 

 

* - strictly for those companies that took gov't bailout dollars

[Azazello1313]

One of the more interesting ideas I've heard for "capping" compensation* isn't a cap at all - it's merely putting a "cap" that says the top salaried/compensated person can ONLY make, say, 100 times what the lowest paid worker in the company makes. So if Joe Q. Exec wants a pay raise from $1.5 million to $3 million because he thinks he's doing an awesome job, well, then Jose the 3rd shift janitor just got his salary doubled as well. A rising tide lifting all boats, so to speak.

 

 

* - strictly for those companies that took gov't bailout dollars

 

sounds great to me, as long as it's the board of directors of the company making that decision and not the government.

[Ursa Majoris]

5) I don't like the idea of CEOs (and their lieutenants) getting hugh $$s if the rank and file are not participating at a similarly proportionate level ... and this all assumes that the shareholder (and creditors) are making out very well, too.

This right here is what I was trying to get across. Let's say CEO gets 10% extra due to company performance being 10% greater and the shares have gone up 10%. Let's have everyone get 10%. If that is bad for the company, then keep CEO at the same level as the employees, whatever that is.

 

In this fashion, CEO still gets more absolute dollars per raise than the bottom of the totem pole but there is an equitable distribution and the company raises all boats. Many private companies actually work something similar to this.

 

And Az - I have no interest in the government being an actor in this. It is for business to understand that the best way to preserve capitalism is to ensure it's undoubted benefits are as widely spread as possible.

[muck]

This right here is what I was trying to get across.

 

...that's not what came across to me in your first posts...

 

One of the things this author (not "my" author, btw) points out is that while there are times when Person X 'deserve' some sort of hugh compensation due to market forces, it is probably best for that person to not get paid that amount of money due to the envy it can spark in the general populace. When I read that, I thought of the ginormous bonuses that Eisner used to get shelled out to him for running Disney and some of the big bucks that went to some of the tech / telecom execs a decade or so ago and some of the money that went to some of the "trader" types at banks and brokerage firms here in the last several years ... and thought to myself that the world would have been far better off if these people would have received 10-50% of what they earned and the rest went to some sort of noble charity (or to the stockholders via buybacks or dividends).

 

Now, I'm not begrudging someone making some serious clams, just it doesn't need to be crazy ostentatious (unless you founded the thing and continue to run the thing ... and then, maybe).

 

Bottom line: I'd be supportive of any company that changed their compensation plans to include various stock ownership requirements on the senior executives, especially companies that are encouraging (i.e., sorta requiring) open market purchases of company stock (in addition to option awards).

[Ursa Majoris]

...that's not what came across to me in your first posts...

That's because I was focused on trying to get you to see that there were more than two options and envy is not necessarily the reason people object to the ever-increasing concentration of the national wealth into a smaller group.

[Chavez]

real median household income: 1967-2006

 

where is this decimation?

Key linchpins of middle class existence - health care (per capita spending has tripled since 1980); higher education (double-digit increases in tuition for the 00s); and retirement (from defined benefit to defined contribution, with company matches going down the toilet) are pretty handily gobbling up the "generous" .6% per-year increase.

[Azazello1313]

Key linchpins of middle class existence - health care (per capita spending has tripled since 1980); higher education (double-digit increases in tuition for the 00s); and retirement (from defined benefit to defined contribution, with company matches going down the toilet) are pretty handily gobbling up the "generous" .6% per-year increase.

 

well, those things are factored into inflation, and the real income graph I showed you is adjusted for inflation.

[Chavez]

"It is not wrong to want to be rich. It may be foolish -- the rich are not notably happier than the nonrich -- but it is not wrong. Getting anything you wish any time you wish is often deadly to happiness -- and also to achievement. ... Being rich can be its own punishment. ... Being rich is not a condition to be envied. ... It may be a self-condemnation, since the rich are so often empty and unhappy, but it is no sin. ... Being rich can take away crucial human challenges. ... People who talk much about the "greed" of the rich, whether the latter's wealth is personally earned or merely inherited, are sometimes expressing the sour feelings of their own envy. But they misunderstand reality. As my father taought me, the rich should not be envied; we should feel sorry for them and pray for them." (pages 55-57)

I was reading a book on Buddhism that touched on this, and it has to do with the "misery" of the rich. Or at the very least, that EVERYONE experiences a basic dissatisfaction that is difficult to place. While most Americans are free from wants of necessity, the consumerism prevalent in our culture promises we'll be happy if only we had "more" (of what? More of whatever floats your boat, man); the rich have reached a point where, essentially, the can fulfill their consumerist urges.

 

And I have a hunch that when you can afford as much "more" as you want to have, you still are left with that vague dissatisfaction. So the lower and middle classes feel that maybe the answer is "more", the rich have already found out that "more" isn't the answer and looks elsewhere.

 

Seven responsibilities external to a business (pages 146-151):

 

1. To establish within the firm a sense of community and respect for the dignity of persons.

 

2. To protect the political soil of liberty.

 

3. To exemplify respect for the law.

 

4. Social justice.

 

5. To commuicate often and fully with their investors, shareholders, pensioners, customers and employees.

 

6. To contribute to making its own habitat, the surrounding society, a better place. The business corporation cannot take primary responsibility in this area; it is not, in itself, a welfare organization. ... Government is not the enemy of business or of the citizens. On the other hand, historically, it has been a fertile source of tyranny, corruption, the abuse of rights, and plain arrogance of power. The alternative to excessive reliance on the state is self-government: sustained and systematic voluntary activiites. This capacity for self-government is precisely what "the republican experiment" of the United States is testing: Can it take the pressure -- or must the nation relapse, like others, into statism?

 

7. To protect the moral ecology of freedom.

 

I'm counting many of our largest corporations at about oh-fer-7 on this one.

[Brentastic]

If I make $50k / yr am I envious of the guy who makes $5 mil / yr? What about the guy who makes $75k?

 

If I make $50k / yr, do I think the guy who makes $5 mil / yr is greedy? What about the guy who makes $75k ... is he greedy? Do either of those guys think I'm envious (even if I'm not)?

 

I don't think that "envy" is a word only used by people who are "on top" (or expect to be) and I don't think that "greed" is a word only used by those "on the bottom" (or expect to be there in the near future).

 

Those words, imo, are words that apply to each of us on an individual level and only when we are honest with ourselves. I'd bet that Larry Ellison is envious of Bill Gates's net worth, but I'm not particularly envious of either of their checkbooks. Right now, frankly, if I'm honest with myself, I'm more envious of the guys who are 100% debt free and living in a modest 3br/2ba house free-and-clear and are consistently getting home at 5:30pm to see their family.

This is pretty much spot on. Every person has different motives. There are many forms of envy that are only defined by individuals themselves. My envy is different from Muck's envy who's different from Ursa's ....

[westvirginia]

I was reading a book on Buddhism that touched on this, and it has to do with the "misery" of the rich. Or at the very least, that EVERYONE experiences a basic dissatisfaction that is difficult to place. While most Americans are free from wants of necessity, the consumerism prevalent in our culture promises we'll be happy if only we had "more" (of what? More of whatever floats your boat, man); the rich have reached a point where, essentially, the can fulfill their consumerist urges.

 

And I have a hunch that when you can afford as much "more" as you want to have, you still are left with that vague dissatisfaction. So the lower and middle classes feel that maybe the answer is "more", the rich have already found out that "more" isn't the answer and looks elsewhere.

 

 

 

I'm counting many of our largest corporations at about oh-fer-7 on this one.

 

??? Then you would appear to be agreeing with the author - if those items are EXTERNAL to a business, then they are NOT the responsibility of the business.