> comparing salary to the value produced is a slippery slope
Can you elaborate? Surely the efficient-market ideal is that everybody gets paid an amount equal to exactly the amount of value they produce.
Can you elaborate? Surely the efficient-market ideal is that everybody gets paid an amount equal to exactly the amount of value they produce.
Note in edit: I suspect what I remember as the Econ 101 explanation is probably accurate enough for most purposes: Both the employer and the worker have temporary, local monopolies: The employer has plenty of money, but a shortage of time, and the worker has plenty of time but no money. So each is willing to trade with the other. The employer could make money in excess of the value added by the employees, by exploiting other kinds of effective monopolies such as patents, trade secrets, even things like brand recognition and goodwill.
Exactly. That's why the ideal case is for the employee to be paid for the value he provides, and the employer also paid for the value he provides (i.e. he provides patents, trade secrets, brand recognition, ...).