Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.
Latest posts by Tombuktu (see all)
- Pareto at Melos | Cosma Shalizi - September 13, 2012
- The G192 report | Robert H Wade - August 15, 2012
- Can Europe’s Mainstream Left Reconnect with Socialism and Economic Democracy? | Nyegosh Dube - July 17, 2012
- Mark Ames | The Quiet Extermination Of Labor Rights From Human Rights - June 25, 2012
- Chris Dillow | Marx was right - March 20, 2012