Monday, April 6, 2009

Following the Moral Compas

Supreme Knight, Carl Anderson, wrote in this month's Columbia Magazine that a major portion of the failure of the financial industry was the personal sin of greed. I have no doubt that this is true.

But I think, in examining the causes, we haven't gone far enough. The financial industry, as it grew beyond the 6% of GDP in 1965 to the 16% it is today, started paying higher compensation to executives. I'm going to make a radical suggestion: Once the first three levels of Maslow needs have been met, all compensation above that amount only attracts those greedy enough to want and need such a high level of compensation. And just as Jesse James robbed banks because "that's where the money is", today's banksters (unethical executives attracted to the financial industry by high compensation) are in the financial industry precisely because "That's where the money is".

If we truly want to bring back ethics and the public good, we really need to reduce the difference in compensation between the lowest janitor and the highest CEO. Yes, justice dictates that these amounts be different. But in 1965, the average CEO made 44 times what the janitor did. In 2009, he makes 4000 times what the janitor does. I think we can preserve motivation while reducing compensation.

2 comments:

Eiko Onoda said...

In peace time an economic gap between the rich and the poor keeps on widening incessantly without fail.

War was the natural consequence to banish this deviation instantly.

History ought not to repeat itself in this regard in our nucleic age.

Our wisdom counts a lot.

Ted Seeber said...

"In peace time an economic gap between the rich and the poor keeps on widening incessantly without fail. "

However, it's not a natural law. Economics is an invention of mankind, and like the nuclear bomb, should be able to be controlled.

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