When the banking and auto industries claimed they needed their exorbitant executive salaries to attract 'talent', we all laughed to think the 'best and brightest' were needed destroy the global economy. What actually did the job was greed, which is, after all, what money attracts.
Whereas the average ratio of CEO to worker salaries is about 20 to 1 in the rest of the industrial world -- and was about that in America only a few decades ago -- it has ballooned to 400 to 1 in recent times. Does this mean American corporate and banking executives are not only 20 times smarter than those abroad, but also 20 times smarter than the American executives who ran our economy before 1980?
Not very likely. But they're certainly 20 times greedier.
James Surowiecki points out that these overpaid executives were notable for making mergers, two-thirds of which ended up destroying shareholder value. Eighty percent of the new products they introduced lasted less than a year. As he points out, "the business landscape of the last decade is littered with CEOs who went from being acclaimed as geniuses to being dismissed as fools".
If American executives were willing for a century or more to work for reasonable salaries, what other than an obsessive greed makes it necessary to overpay them today?
Bach never got rich, Mozart died in a pauper's grave. Money didn't attract Cézanne, van Gogh, Rembrandt, Tolstoy, Dostoyevsky, etc., etc., the list is endless. You don't have to starve to be great at what you do, but money doesn't seem especially relevant. Nor is this lack of connection restricted to the arts. Einstein worked in the Swiss patent office to survive while he came up with his major contributions to science, and most of the authors of major inventions were poor before they made them. Small firms come up with 24 times more inventions than large ones with fat R and D budgets.
The truth is, money has nothing to do with talent in any field. The biologist Lewis Thomas once said that the need to feel useful, to make a contribution, is fundamental to human beings. People crave challenges, like to exercise their abilities. They also like to eat. But our culture -- or at least the least evolved elements of it -- have distorted this need by using money as the only criterion of worth, which has elevated some of the least valuable members of society to the most valued. Huge sums of money attract only the most neurotic members of society -- those who feel empty, who have nothing to give, who are sick with greed. The decline of America in the world is due largely to this failing. We can only hope Obama will inspire a reversal of this pathological trend.
(In his inauguration speech, Obama talked of a whole new way of doing things. To understand the cultural paradigm shift that engendered this change -- the shift that both Bush and the Taliban have resisted so fiercely, see my website for information on THE CHRYSALIS EFFECT: THE METAMORPHOSIS OF GLOBAL CULTURE).