Do you know what the result was? MASSIVE increases in executive pay. Rather than shaming companies by making them admit to paying their executives hundreds or thousands of times more than they pay their average employees who are actually creating all of the companies value, they turned executive compensation into a signal to investors of corporate health. 'Would that company be able to pay their CEO $650 million a year if it was failing? Of course not!'

This move in Britain appears to be nothing more than an attempt to radically amplify economic inequality, not reduce it. And it will succeed at that as well as it succeeded in the US.

That's not what massively increased executive pay. The stock market boom - starting from the early 1980s and accelerating in the mid 1990s to now - is what generated the hyper spike in executive compensation. You can directly trace all big increases and drops in executive compensation, going back 50 years, with the S&P 500's movements.

Jul 1964 to Apr 1982, the S&P 500 went from 84 to 109. Call it 30% over 17 years. Read that again and again until it sinks in.

From Apr 1982 to Oct 1993 it went from 109 to 466. Call it near 300% in 11 years.

From Oct 1993 to today, 24 years, it has gone from 466 to 2457.

The only reason executive compensation has soared so dramatically, is because so much of it is tied to stock compensation.

If we're talking base salary, the NBA's total league roster (~450 players) earns as much as all Fortune 500 CEOs combined.

I find it silly that transparency alone would cause pay raises or gas price increases.

I think you mean “early 1990s” and “SEC”, not “late 1970s” and “FTC”.

It caused prices to go up, since now the gas station can easily see he doesn't really need to compete much, so they just barely went lower then their neighbor. After a few cycles of that prices ended up higher.

And no, the rarity nor value of the employees skills matter, and hasn't for quite awhile now (since at least the 1980s). The view you depict is the 'free market' one, where profit always rapidly decreases to zero based upon rational competition. Tell me, do you see many companies with profit margins rapidly approaching zero?

Many of the companies that were in a field which Amazon entered

In the well run tech companies I've worked at, the programmers tended to make more money than their managers, which I find to be a good sign.

Ditto for almost all hedge funds I've seen, though to a much larger extreme, those who produce the value get the largest paycheck regardless of their pecking order. though to be fair the huge hedge funds buck this trend by making soooo much money and having a single person own the management company that the fund pays the management and performance fees into.

It doesn't help with measuring the ratio of the lowest paycheck to the highest, but it does help ensure that people get paid based on what they produce rather than their title.

But I find its a good question to ask when interviewing. Find the manager and ask how many of his/her reports make more than them. If you get squirming or push back about a top down approach with salaries that follow the same logic, then you've got a decent data point that you won't be all that valued at the company.

I sold and retired but I used to get shocked looks when I revealed that some of my employees earned a higher wage than I did. Basically, I paid myself a reasonable salary and paid other people to do things that I could not.

On the whole, I think this fostered a good work environment. There was a physically demonstrable level of respect. Salaries weren't ever really hidden, so it was almost certainly a motivator/morale boost when crunch times came. I paid myself enough and, for the most part, just kept pushing funds back into growth and a nest egg. I also kept the business as a separate entity.

To give an example, this was the early 1990s and quality programmers weren't easy to find. New hires started in the six figure range, unadjusted dollars. As an aside, it's notable that folks tell me that wages haven't really improved and, in sme cases, have declined.

Anyhow, the gist of this post is that showing respect earns you respect. Granted, the company never expanded beyond 250 people and I haven't actually ever taken a business class. So, I guess this is largely anecdotal.

By management I don't mean product/project management, I mean general & strategic leadership of a large organisation.

One organisation I worked for had a very elaborate grade system, I was a Grade 20, the highest non-management grade. At that level you had a choice: try to get promoted to Grade 21 at which you would officially be management, but you would lose your overtime pay, and it wasn't until Grade 25 at least that it would be financially worthwhile. Or you could divert your efforts into avoiding getting promoted... Guess what the majority of engineers did?

The guy I reported to there however embraced the promotion. He loved "being a manager". He loved the attache case, he loved going over the minutes of meetings, he loved pre-meetings to plan the next meeting, he loved travelling to attend more meetings... It takes all sorts I guess. He was an unremarkable engineer before, and he wasn't any good at actually managing either tho'!

I see a lot of ire being targeted towards people making close to a million, and while the 1% makes for a good slogan, I believe the real problem is actually the 0.1 - 0.01% whose wealth has skyrocketed. And you don't reach the 0.1% with executive pay, but rather due to making money on existing capital.

Wasn't Picketty's research evidence that the problem isn't income, but rather accumulated wealth?

By focusing on people rather than the financial instruments, the politicians can be seen to do something (which is guaranteed to not fix the problem fundamentally).

So yes, that's the cause, but it's unlikely anything will ever be done about it.

Firstly, most of the ruling party (Tories) are rabidly "pro buisness" which translates to sounding tough on anything that could be twisted into "red tape".

Secondly, this is an attempt to steal thunder from the current opposition party, who are currently in disarray.

Thirdly, and most importantly, there is simply not enough time for this to be implemented fully.

A few executives making large salaries is not an actual issue.

Let's use a hypothetical example. Imagine I'm a car salesman, and I move to a new town with 10,000 people. Am I likely to be better off if 1% of that population can afford to buy a car or 10% of that population can afford to buy a car?

No, it doesn't. It's quite simple, none of those advances in science and technology mean a damn to the economy if there's no consumers buying new products. A working class person is much more likely to spend £1000 into the economy faster than a rich person, mainly because their needs are more immediate. Spreading wealth around leads to a broader base of consumers and a healthier economy. Also, it's quite clear that the opposite (trickle-down economics) has been a dismal failure.

Research & innovation create new product categories. No amount of consumer spending invents new products.

I disagree with you that consumer spending boosts the economy. Look at the actions of central banks easing monetary conditions to try and boost spending. All they do is succeed in inflating bubbles that later produce busts.

Economic growth is a subject not completely understood by economists. Is is savings or investment? How does regulatory burden come into play? What about property rights and government corruption?

Potential consumer spending does create the space for new products.

Take VR as an example. The recent resurgence in VR has been made possible by the disposable income of gamers, especially PC gamers. Look at the high amounts of money being spent by gamers. If that disposable income did not exist, the resurgence of VR would look very different, and products like the Vive and the Rift are unlikely to have emerged.

As for whether consumer spending drives scientific research, depends on what you class as consumer spending. For example, do you class student loans as consumer spending? Do you class government taxes as consumer spending? I'd suggest that funding from a diverse group of people is more reliable than hoping a handful of rich people do the right thing.

It might have dropped but it's still "a high level" - 10,000 gun deaths thus far in 2017 would indicate that.

http://www.gunviolencearchive.org/

Presence of internal or external conflict seems to be the largest driver of violence.

Page 29: http://economicsandpeace.org/wp-content/uploads/2016/06/GPI-...

What should really be done is to institute a financial transaction tax that both suppresses pure speculation and taxes actual wealth generation given the largest component of take-home pay for CEOs is stock.

One thing I am uncertian of is how exactly they defined 'violent crime'. Most people only consider street crime when addressing the issue. But most death from crime is due to white collar crime. White collar crime (at least in the US) kills more people and causes more economic damage than street crime by a large margin (but is socially normalized among the upper class so rarely punished, and then only lightly).

For certain societies, banning guns might lower crime. For others, it might increase it. There's lots of complex factors in any society that can influence whether certain economic or legal policies are taken.

For example, a country with a strong militaristic culture and a law for drafting all of its citizens to the army, might have lower crime despite the prevalence of legal gun owners. All sorts of possible reasons for this.

Likewise, an island nation with strong border protection could ban guns altogether and probably see a drop in murders. It's all possible.

Societies are complex and woven with history, traditions, sub-cultures, economics, politics, and natural inclinations that can all influence the outcome of any policy for better or worse.

But as far as solving violent crime through egalitarianism, focusing on executive pay (which is a tiny fraction of the population) seems misguided. Its too small a number of people to have a noticeable affect on violent crime.

This seems to mostly solve jealousy more than anything else.

If it is basically CEOs and their board conning money out of the company, won't companies that don't engage in that kind of behavior have a competitive advantage and eventually overtake the poorly led companies?

And in reality a good CEO is worth an enormous amount of money so the actual amount that is earned and the excess that is grift is difficult to measure.

Can we make sure that the royal family, which is essentially a corporation (in fact, the queen calls her family "the corporation") is subject to the same rules, and they don't hide their payouts and tax breaks behind opaque special case rules just for themselves.

Do you have a citation for this? Because Capital in the Twenty-First Century showed, with a boatload of empirical data behind it, that "superstar salaries" are one of the main drivers of inequality at present (it's a key difference between the inequality now and that of previous centuries - earlier, we had inequality of wealth and now we have inequality of income)

To decide whether this is what free market capitalism intends, we'd have to determine if their wages are large due to free market forces (e.g supply and demand, etc) or if there is some government collusion going on inflating their wages.

That would be the collusion, although I think it's less collusion, and more a misalignment of interests that lead to a negative outcome.

Typical employees are not.

An employee's function, on the other hand, is to do their "task". They get paid to do it. Now, you could argue that if they do their task well, then the company does well as well, but that's not the way the relationship is presented. It's more transactional in nature, because it's easy to quantify the value being exchanged.

http://www.thedailybell.com/editorials/richard-ebeling-free-...