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Friday, October 02, 2015

''You Just Don’t See the Positive Side'' of High Managerial Compensation

From an interview with Thomas Piketty during a trip to South Africa:

...I think in all cases there is always a lot to learn from these historical experiences and probably the one … lesson is we don’t want, we don’t need 19th-century inequality to grow in the 21st century. We find the role of inequality may be justified by incentive and growth considerations, but certainly no extreme and sometimes obscene level of inequality of pay that we’ve seen in recent days, with top managerial compensation going to millions of dollars. You just don’t see the positive side of this in the performance, in the job creation. ... The idea that you need to pay top managers 100, 200 times the minimum wage to get them to work and otherwise they will just not do the work. That ideology is not consistent at all with the historical data that we have, which shows that you can develop with reasonable, not extreme inequality levels. ...

The comments on the interview, at least when I read them, were not supportive.

    Posted by on Friday, October 2, 2015 at 06:57 PM in Economics, Income Distribution | Permalink  Comments (15)


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