> The average person doesn't like to inhabit the Hobbesian reality that CEOs do, where they're accountable for results and any bad things happening are automatically their fault

Does this actually happen though? I'm not sure I've ever seen a President or CEO of a company be held accountable for bad behavior or bad decisions in any meaningful way.

Best case scenario, you mess up and get "fired" (with a million-dollar-or-more severance/contract payment attached, or similar in stocks -- enough cash paid out that you can basically retire for life). Worst case scenario, seems to be that you get hauled in front of Congress to answer questions and/or get teased on the internet for a few days -- stuff that has almost no lasting effect.

I'd say the Golden Parachute is closer to worst case. Best case is "failing upward", like so many of these Upper Class Twit of the Year candidates seem to do.

Those are the consequences for line-level workers caught doing something bad, too. The company fires you and refuses to give you a good recommendation. Worst case, you might get hauled in front of court to answer questions.

The difference is entirely in how people view those consequences. For most line-level workers, getting fired or laid off is a source of intense shame, as well as a big logistical inconvenience. As a result, they'll do almost anything to avoid it, including making bad economic decisions for job security. For CEOs, it's an opportunity to do the same shit to other people. As a result, they have no inhibition toward taking risks that might potentially get them fired, as long as the payoff is worth it. And then part of the reason why CEO searches are so challenging and CEOs get paid so much is that it's hard to find someone who is rational about this - willing to take risks when the payoff is high, but prudent about it so they don't tank the company on a whim.

I'm sorry, are you serious? You think most workers don't want to get fired because of the shame and inconvenience? You can't think of any more significant motivators?

You have other reasons for why people don't do stupid shit and fuck around at work (like they would with friends or family)?

Sure there is also a bit of pride and sense of responsibility involved but shame and complications are strong drivers.

What do you think motivates people to avoid messing up at work?

Loss of healthcare, loss of income risking food insecurity, homelessness, debt, etc. Shame is a driver, but if you ask the average person why they don't want to get fired, they'll accurately say "because I need money to live", not "it would be inconvenient and I'd be embarrassed", even if that's a secondary concern.

I guess I'm assuming an American perspective because we were talking about an American company, but maybe others are not. I realize the stuff I'm saying does not apply in many other countries.

This is a failure to break down goals into subgoals, which IMHO the OP is correct in ascribing to shame. Or perhaps they're wrong about shame specifically, but it's some strong emotion that keep most people from analyzing the situation properly.

There are plenty of other jobs that will provide both healthcare and a good income. You get them by making yourself seem indispensable to the people with hiring authority. How do you do that? It varies by field. In software engineering you usually just need to seem personable and confident, ace all the Leetcode interviews, and have some basic subject matter relevant to the job. In finance, you need to know rich people, and you need to convince them to give you money to manage, which usually means feeding them some potentially profitable insight that they didn't think of themselves but can trade on and then offering to manage part of their portfolio in exchange for 2 & 20. In sales, you're doing this all the time (for your employer's product, not for yourself), so the interview is the job and the job is the interview. You don't need to actually be good at the job but you need to plant the idea in their head that you'd be better at it than they are, and so it's worth paying you to do it for them. In other words, be shameless.

Rational people, when they get fired, think "Oh, it's time to fall back on this algorithm until I get a new job." Irrational but normal people think it's a personal failing that they got fired and tend to avoid dealing with it until desperation (their bank statement) sets in. That also makes normal people very averse to being fired, but this makes them lack practice in the skills that will get a new job.

I read that as ironic understatement (though the "logistical" part doesn't seem quite right) but perhaps that's not how it was intended.

> getting fired or laid off is a source of intense shame, as well as a big logistical inconvenience

I read this as that it's inconvenient both from a psychological as well as a practical perspective.

You want to avoid shame/guilt, and you want to avoid the hassle of having to run to job interviews, get recommendation letters from old jobs, perhaps move to a new place closer to better employment, get a haircut etc. There are a lot of practical inconveniences to getting fired that could be classified as "logistical".

(the above is just my interpretation of what OP said)

This is similar to why the argument that capitalists are due returns because they take on risk doesn't move me. Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free! Meanwhile workers will be in deep shit if their company goes under and they don't find something else ASAP. Risk, indeed. The absolute worst-case scenario is that they might have to work for a living? Oh my, what horror.

This isn't to say that investors shouldn't make money, I just find this (often presented as) quasi-moral justification for it absurd.

> Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free!

Why aren't you founding a company, then? Or a cryptocurrency token, or selling NFTs? Or leveraging up to become a landlord on borrowed money? Or hobnobbing with executive recruiters and VCs while setting yourself up as a thought leader? Or raising capital for a hedge fund? These are all things you can do right now, with potentially (but risky) multi-million-$ payoffs. For many of them you don't even need to quit your day job - your employment contract might say otherwise, but the actual work involved can be done on your downtime without them knowing.

For most people, the real reason they don't do this is because they're uncomfortable with it. They don't want to inhabit a world of secrets, lies, non-aligned interests, and risk, so they take a job that lets them ignore all that and get paid for doing a specific task according to the specifications of their boss.

I was posting about returns on investment, not entrepreneurship. Some entrepreneurs really are takings significant risks, beyond the risk that the huge numbers in their accounts become somewhat less huge. Some are even taking more risk than their employees. Investors generally are not—again, their most-likely failure state is still being rich and in the absolute worst-case they lose enough that they have to actually work for their income... like everyone else. Their absolute worst (but unlikely) case looks suspiciously similar to most folks' best (likely) case: a well-paid, fairly well-respected (among we mere plebs, anyway) job. They are taking on a great deal of risk in one sense, but are hardly taking on any in another, arguably more meaningful, sense.

I've repeatedly seen people use risk to justify returns on capital in relation to wages—but the risk is all bullshit, in many cases. Again, I'm not claiming that investment shouldn't yield returns, but I've seen the "risk" argument used to justify income inequality, while the actual real-world risk workers & capital are exposed to are the inverse of what that would imply.

Mine is essentially an argument for the marginal dis-utility of risk, I guess. "Capital deserves a huge up-side for the moral reason that investors take great risk" is a BS argument, IMO, yet one that crops up from time to time. I don't think "deserves" has anything to do with it, and I don't think that framing holds up to any amount of scrutiny.

The reason this was relevant is that you see similar arguments for why CEOs are so well-compensated—"if things go poorly, they'll see the consequences for it!" Except the "consequences" (short of actually criminal activity, and even then, see e.g. Wells Fargo) look an awful lot like what would be a life-changing-for-generations windfall for normal folks. Their worst day, after all of the shit has hit all of the fans, would be 99+% of people's best day of their life. So... is that, meaningfully, risk that justifies crazy-high compensation? My objection isn't even that the compensation is high, but the way supposed risk is used to justify it. Their compensation is, for a bunch of reasons, a fact, but I don't think "it's fair because they take on so much risk" is even a little valid. More likely is that it's not, by many folks' reckoning, anywhere near "fair", and that's just how the system, and perhaps life, is. Investment is, largely, similar, once you're past the smallest of small-fry investors, or people investing in their own small business ventures.

[EDIT] To be clear, I'm not arguing that investors (and certainly not arguing that entrepreneurs, in general) do not expose themselves to risk. Of course they do. Lots of it, by some entirely-reasonable reckoning. Rather, I think the kind of risk makes trying to use that as some kind of moral justification for their returns, to be blunt, extremely dumb.

I'm speaking of causality, not justice. I agree that talking in terms of what people "deserve" isn't particularly helpful. The way I look at it, capitalism is a big super-organism and we're just cells that make it up. Do you shed a tear when your skin cells slough off or your gut microbiome comes out in your shit? Similarly, capitalism as a system is incapable of caring what happens to the individual workers that make it up.

And then my interest is primarily in understanding why does the system function the way it does and secondarily which organ should I try to occupy myself, given how it functions.

Questions about why people choose (not) to occupy various roles or what's holding them back this are very germane. Up-thread, I listed a bunch of CEO-like or investor-like roles that people can occupy without any particular connections or cultural capital, merely by looking the part. Why don't more people go for them? After all, another property of capitalism is that lucrative positions attract competition, and in the absence of barriers to entry, the profit gets competed away. Why hasn't this happened with CEOs? Arguably, it is happening - more people are starting startups or micro-businesses and playing the CEO role than in the 80s/90s, and we're posting this on the forum of an accelerator devoted to helping people with this trend.

I've played both the founder/CEO role and the lowly-engineer role, and currently am back in the lowly-engineer role because I realized I enjoy it a whole lot more (and hence am more effective in it). So there's some personal experience backing it up, in both the pleb and the capitalist role.

OK, I think we probably at least mostly agree on the particular thing I was originally posting about—the risk of investments, to the investor class, representing a kind of risk that's incommensurate with the risks ordinary workers face in their situation, being a whole other kind of thing, and not justifying in any kind of moral "ought" sense returns on investment (or, following similar arguments, very high CEO comp) in relation to worker pay. These arguments do see some use, and IMO they're simply terrible, both for explanatory power and for the actual moral content of the argument.

> Why don't more people go for them?

This is definitely an interesting area to explore, and I think it does partly relate to the rest of our discussion: if the key to winning big is to keep taking shots until you score (this seems to be the most-commonly-advanced route to success in entrepreneurship and investing, both), the kind of risk that "taking shots" entails makes a huge difference.

If it means the second-from-the-left number in your net worth dropping by one, but nothing else about your life changing, well, that's not so bad. Might go right out and take another "shot" immediately. Hell, do two or three at once. You could make several attempts before deciding maybe you're just not cut out for this, without much risk to your everyday life.

If it means: leaving your job and losing all stable income because you're not yet high enough in the hierarchy to be permitted multiple well-paid simultaneous jobs and are subject to far-reaching non-competes, exclusivity, or IP clauses; having to deal with marketplace health insurance & costs at the same time that's happening (maybe for a family!); dropping more money on projecting an image of success or of being the right kind of person for investors to "believe in" and on networking; all that before before you even get to the part where you put the bulk of your savings into the company & product itself; and with the most likely outcome being really bad and leaving you needing years to recover for another shot, assuming you ever do—I'd say that's at least part of why people don't bother.

I do not think this is the only reason people who aren't already quite well-off don't "shoot for the stars", but it's a not-insignificant part of it. Background and family also advantage people in business just like anything else (see also: Hollywood dynasties) by providing not just good connections for networking, but direct, inside knowledge about how things work in fact, not just on paper. There are, truly, lots of people who just haven't a clue how to, say, start a business, seek investment, et c., so much so that it wouldn't even occur to them as a possible course of action even if a great opportunity were handed to them on a platter. Their understanding of the space is so weak, as they've had so little exposure to it, that they don't know what's possible, so don't know what they could try, even if they were willing to go figure out the "how" (which willingness is, admittedly, far from a given). It's a widespread case of don't-know-what-they-don't-know for practically the entire body of knowledge required to launch a business, and it's the state most people live their whole lives in. Some do find their way out of it. Others are simply born to the right circumstances to learn all about this with little effort, and may not even realize how uncommon are the thousands of little pieces of info they picked up by existing around the right people during their formative years.

I'd add, as an aside, that founder-CEOs may very well not be in the capitalist class, really. Founder-CEOs who don't start with lots of capital may in fact be taking both the risk-in-a-finance-sense that (say) an angel investor does, measured in cold dollar terms, plus the totally different, actual, can-I-put-food-on-the-table-next-month risk common to ordinary workers. That's the subset of the "job creator" category, if you will, that really is taking on meaningful risk, and doing hard work besides.

> After all, another property of capitalism is that lucrative positions attract competition, and in the absence of barriers to entry, the profit gets competed away. Why hasn't this happened with CEOs?

Eh, that's a property of ideal markets, not of capitalism, which shouldn't get the credit for everything that markets do. In practice (I'm sure this isn't news to you–I'm just structuring a line of reasoning here) things are much messier, and IMO sky-high executive compensation is all tied up in out-of-control principal agent problems and just-enough-removed-you-can't-prosecute self-dealing that's widespread at the highest levels of our economy, to the point of practically being the defining feature of its operation.

One of the major barriers to entry, in this case, is having something to offer—personally, or (better) via family & friends connections, or through control you can exert over businesses you're already involved in—to the people selecting for CEO roles or board seats, even if it's only the future potential of doing a few favors for the right folks, and nothing's ever even implied out loud. Happily for the corrupt, the same traits that make these kinds of arrangements and mutual-aid-for-the-rich environments possible can also be justified for business reasons—well, having high-level personal and family connections with several other businesses will help with sales, right? And having already made money is a sign that this candidate is good at business (never mind the family money & connections that put these endeavors on easy-mode). So we'd better hire the Yale MBA who comes from money, has a cousin in congress, and could already, at least, pay their kids through prep school and college without working another day in their life.

Down in mid-size company territory, even, you see similar stuff, thought pedigrees are (of course) a bit less impressive. Kids groomed to inherit a CEO position, grandkids shipped off to start in a high-level management position at some golfing buddy's other mid-sized company to lever them up to CEO candidacy at a smallish publicly-traded company later, that kind of thing. At all levels, companies performing acquisitions to bail out friends, family, and business allies (who'll return the favor later).

I have a sense this has gotten worse over the past decades, but have not done the legwork to prove it. This is part of a broader (also very much "gut") sense I have that we, as in humanity as a whole, are getting better at playing games and at identifying them in larger systems, in a game-theoretical sense, to the detriment of anything that's not aligned with those games, while we're also getting worse at discouraging people (using means outside the strict ruleset) from playing these to the letter of the rules rather than in the spirit of the rules.

>Please, give me the "risk" of having somewhat-fewer millions in the bank. I'll take on all that risk. For free!

Okay, and somebody who was born in poverty in a low-income country might be happy with far less money than even the lowest wage earner in America. All you're saying is wealth is relative. But we already know that, and it's not really an argument for anything!

It's an argument against justifying CEO pay (or returns on capital) by appealing to what's owed due to the supposed risk taken. I'm saying that not just wealth is relative, but (relatedly, yes) so is risk. The risk your average worker at a megacorp operates under every day is far more meaningful than the risk the CEO, or the idle investor class, takes in their roles, even if the worker's risk is relatively tiny in dollar terms.

This isn't even an argument against the compensation itself, but an argument against a particular justification for why it's "right" that things are structured this way, or why it's necessary that they are, which argument is fairly common, but, IMO, laughably weak. Yet you see this argument advanced fairly often, in exactly these terms: "well of course megacorp CEOs are paid millions per year, look at all the risk they take that you don't have to, that's why they're paid the big bucks!" or "it's not just necessary but right that we reward capital, look at all the risk capital takes!" Meanwhile, my oh my, please, give me their "failure" state when that risk is realized.

>The risk your average worker at a megacorp operates under every day is far more meaningful than the risk the CEO, or the idle investor class, takes in their roles, even if the worker's risk is relatively tiny in dollar terms.

Okay, and roofers and oil rig workers have far more fatal injuries than software devs, so then the person who works the riskiest job should get paid the most? Personally, I don't think it is a good idea to base an economy that way, but that is a whole another discussion.

>This isn't even an argument against the compensation itself, but an argument against a particular justification for why it's "right" that things are structured this way, or why it's necessary that they are, which argument is fairly common, but, IMO, laughably weak.

Wait, so if your not against the higher compensation, and you do acknowledge that capital takes at-least some risk, what is your real argument here?

This seems like a very naive perspective to me. CEOs are generally not "exposed to all the risks of the real world". If they get fired it's often with a golden parachute and the ability to live comfortably without ever worrying about money or employment. Many times, people become CEO precisely because they aren't ever exposed to real risk, and if something goes wrong they can fall back on savings or family or a debt-free prestigious degree.

Seriously. If GM goes belly up next week, who’s going to be without health insurance for the foreseeable future?

My perspective on this might be outdated, but a corporate legal team can do more than just fire you for moonlighting. Depending on your jurisdiction/contract, there could be Intellectual Property ramifications.

Obviously, a C-suite can have certain sway in these situations and a company might not go after a lowly grunt's pet project, but there is a wide gap between these two situations where there are worse ramifications than losing a job.