Monday, September 17, 2007

Ayn Rand, Robert Reich, and CEO Pay: A Neo-Rawlsian Non-Stynthesis

NYT piece on Ayn Rand, mentioning a guy I admire very much, John Allison:

"One of the most influential business books ever written is a 1,200-page
novel published 50 years ago, on Oct. 12, 1957...'I know from talking to a
lot of Fortune 500 C.E.O.'s that 'Atlas Shrugged' has had a significant
effect on their business decisions, even if they don't agree with all of Ayn
Rand's ideas,' said John A. Allison, the chief executive of BB&T, one of the
largest banks in the United States. 'It offers something other books don't:
the principles that apply to business and to life in general. I would call
it complete,' he said...She was born in 1905 in Russia. Her life changed
overnight when the Bolsheviks broke into her father's pharmacy and declared
his livelihood the property of the state...Shortly after 'Atlas Shrugged'
was published in 1957, Mr. Greenspan wrote a letter to The New York Times to
counter a critic's comment that 'the book was written out of hate.' Mr.
Greenspan wrote: ''Atlas Shrugged' is a celebration of life and happiness.
Justice is unrelenting. Creative individuals and undeviating purpose and
rationality achieve joy and fulfillment. Parasites who persistently avoid
either purpose or reason perish as they should.'...Every year, 400,000
copies of Rand's novels are offered free to Advanced Placement high school
programs. They are paid for by the Ayn Rand Institute, whose director, Yaron
Brook, said the mission was 'to keep Rand alive.'...Mark Cuban, the owner of
the Dallas Mavericks, who was born in 1958, and John P. Mackey, the chief
executive of Whole Foods, who was 3 when the book was published, have said
they consider Rand crucial to their success. The book's hero, John Galt,
also continues to live on. The subcontractor hired to demolish the former
Deutsche Bank building, which was damaged when the World Trade Center towers
fell, was the John Galt Corporation.
." [NYT]

And, then, from someone I admire MUCH less, Robert Reich:

"There's an economic case for the stratospheric level of CEO pay which
suggests shareholders -- even if they had full say -- would not reduce it.
In fact, they're likely to let CEO pay continue to soar. That's because of a
fundamental shift in the structure of the economy over the last four
decades, from oligopolistic capitalism to super-competitive capitalism. CEO
pay has risen astronomically over the interval, but so have investor
returns...CEOs have become less like top bureaucrats and more like Hollywood
celebrities...This economic explanation for sky-high CEO pay does not
justify it socially or morally. It only means that investors think CEOs are
worth it...if America wants to rein in executive pay, the answer isn't more
shareholder rights. Just as with the compensation of Hollywood celebrities
or private-equity and hedge fund managers, the answer -- for anyone truly
concerned -- is a higher marginal tax rate on the super pay of those in
super demand." [Reich, WSJ op-ed]

(Nod to KL, who could NEVER get paid enough, in my book!)

1 comment:

J Mac said...

This isn’t shameless self-promotion because I’m promoting an NGO — which happens to be featuring Robert Reich as its guest blogger today. Why Democracy is a global documentary film broadcast that will screen 10 new docs via 45 broadcasters to hundreds of millions of people. In concert with this we’ve got three weeks of blogging by writers and thinkers from around the world. So, Robert Reich is blogging today, and responding to comments, etc. It’s at