No one should be a billionaire

theweek.com

15 points·albertut··2 comments

This article tries to ask the question: who should earn more, the workers or the CEO? The problem is that this completely misses the point.

When a company faces steep competition, the CEO, like a famous general, is absolutely worth whatever they earned if they succeed at keeping the company alive. A properly functioning market should have lots of dynamic competition. So the mere fact of some CEOs earning lots of money is not by itself alarming to me, because it may simply be an indicator that smart, talented people are competing to best serve the needs of an important competitive market.

However, when a company is not facing any competition, I concede that the CEO may not be adding much value. If fat CEO paychecks are happening in a static, uncompetitive market, then I would agree that we have a problem.

Nonetheless, the central question is about markets and competition, not half-baked moral judgments about how much someone "deserves". This article frames the question in completely nonsensical terms.

The article mentions that CEOs make 300 times what the typical worker makes. Do they provide 300 times the value to the company? In most instances, I think probably not. However, I would say the amount of responsibility the CEO has is in excess of 300 times the average worker. That responsibility must be worth something, and I think this could justify fat paychecks even in noncompetitive markets.

Reply on news.ycombinator.com