Thursday, September 28, 2006

More on CEOs

Guest post from my brother:

Being a CEO is a type of mental illness. A CEO is someone who makes $40 million in a year and doesn't immediately retire to more meaningful pursuits. Being a CEO actually requires a certain set of skills and is a valuable role to a corporation and society. I could believe that a CEO wouldn't retire because they felt needed by their companies. And there are lots of long-serving CEO's for whom this is true. Ironically, these long-serving CEOs are usually the ones earning less than $1 million.

The CEOs who make the enormous amounts of money live in a rarified world that is incomprehensible to normal people. The pressure is enormous and all of their work colleagues are also competitors likely to turn on them at the first sign of weakness. People who accept these work conditions do so because they have distorted motivations. For reasons, usually of personal insecurity or a messiah complex, they want this position in society. The money helps them with their personal insecurity issues. You have to fight for these jobs; society doesn't just pick you, like the next Dalai Lama.

The capitalist system is ultimately based on people. We see the CEOs and their pay because they are required to report it, but we don't see that surrounding them are the board of directors, the mutual fund directors, the endowment and pension fund managers, and the legions of vice-presidents whose income is less visible. Collectively, these folks form the environment in which CEOs dwell. Collectively, they control a large amount the world's resources.

Within that environment, however, common human psychology still comes into play. There's competition to be the leader of the pack, etc. This competition leads to the excessive salaries. It's the price we pay to have these people in these positions. Do we need them? Can we get more balanced folks? I don't know. There are many equally capable people who taste the atmosphere of the executive suite and immediately decide it doesn't suit them. A less competitive environment would bring a more balanced set of leaders, but would lack the constant drive for growth that we expect in our society.

At the bottom of it all, isn't usury the problem? When we expect money to make money instead of labor making money, we get capitalism. Another thing I realized back in 1997: If you aren't providing the capital, you're the wage slave, even if you're the highest-paid wage slave. For me, the problem isn't that these people exist or even that we might use them to drive our capitalist system. The problem is that we also endow them with authority on issues outside the running of a large multi-national corporation.

The business-politics complex is currently scarier than the military-industrial complex described by President Eisenhower. I think that part of the problem with Thomas Friedman is that he doesn't perceive the danger that large businesses pose to national sovereignty, a situation which ultimately disenfranchises the population. What does it mean when a company asks its employees to contact their federal representatives supporting legislation beneficial to the company? Are the employees acting in their own best interests or in the interests of the shareholders? I'm a bit confused about the whole thing. Then again, why do poor people vote Republican?

From a physics perspective, I'm also fascinated by the ability of money to concentrate. In a natural system, entropy (disorder) is always increasing, for example, the oxygen in a room is naturally distributed evenly throughout the room. A higher concentration in one corner will quickly disperse. Why does this not happen with money? Obviously, someone with more money would be less careful in spending it than someone with less and the money would become more distributed. Again, I think the problem lies in usury. When money itself can be used to make more money, money accumulates. Also money translates into power, which can be used to make more money. Congressmen can be bought, giving up their power for less than it is worth. Or rather, their power is worth more to someone lobbying them than it is to the representative. It is sold too cheap. Individuals also sell their personal power too cheaply either through campaign advertising or their positions.

I'm still troubled by considering the actual interface where the money transitions from those with less to those with more. To make this work, there must be people like a slave overseer who is slightly elevated above the other slaves in exchange for essentially betraying them. Perhaps the telemarketers, the spammers, the collection agents, the rent-to-own proprietors. People who extract money from poor people to give to the wealthy for a small fraction of the proceeds. Do they know what they're doing? Do they have a choice? Would a stronger Christian ethic make this process more difficult? Who is my brother?

Then again, perhaps my zero-sum, redistributionist perspective on the economy is flawed. After all, a lower-middle-class person in America lives better materially than a king in medieval times. It isn't the rich who are ruining the environment; there just aren't enough of them to matter. It's the lifestyle of the average person.

Sometimes I think Christianity is the problem. There's a fleeting thought in my head that the sacred value of every human being with the directive to be fruitful and multiply leads to trouble. I'm still trying to reconcile the Catholic Church's ban on birth control with the fact that the energy footprint of each person is unsustainable. I'm also trying to figure out the whole religion thing. My daughter is very interested in joining a religious community. I think Catholicism has the strongest intellectual tradition even though our local church is completely wacko, probably due to trying to reconcile Catholic teachings with upper-middle class American values.

The Lutherans are the current frontrunners based on proximity and a reasonable theology. My wife is working hard to avoid the Mormons, who have an intellectual tradition that is too close to science fiction for my tastes and a very insular culture. The truth is that most people choose their religion based on community and merely accept the theology that accompanies the community. People don't think very much. Why don't the Catholics in our town have more than two children? How are they still practicing Catholics?

Am I the only person who thinks that accepting hypocrisy is the end of rational discourse? People who believe in UFO's are wacko, but people who believe in an active, personal God are considered upstanding members of the community. Why is that? Aren't the evangelical Christians dangerously deluded? I recall a college friend being so cynical as to suggest that many people would do well to rise to the level of hypocrisy, at least paying homage to the truth.


  • Having shared the lofty world of CEOs and Senior Management... blah blah blah... it became apparant to me that the main justification for any single person to pull $50 million out of a company and keep it for themselves is that there are others in other companies doing the same and that there is a sort of 'wink, wink' reality-agreement amongst these individuals that this is normal and correct. It seems that if there are people clever enough to induce masses of other people to labor at tasks which, when assembled into 'The Corporate Product' yield an item that can then be sold to a population which includes many of the same people who created the item and many others not associated with the Product, and that such sale of Product in turn yields more money than it took to make the item and pay the people who actually used their skills and time to make the Product a reality, that they (the clever) are entitled [ENTITLED] to remove from the cyclical process of manufacture and selling, all the money that they can handle without stirring up a negative reaction from the collective players in the otherwise absurd scene called 'Enterprise'.

    Accumulation of wealth in these cases is not so much a matter of incredible aptitude and prowess being rewarded grandly as it is similar to the appearance of dark puddles on a concrete floor that looks smooth and flat, yet upon being washed, reveals the true character of any manmade item (or institution): that there are irregularities in the surface, oddities in the veneer, flaws in the finish, which, when exploited (or simply interacted with) will allow for liquid (assets?) to accrete in isolated pools of indeterminate size.

    By Blogger badbadmonkey, At 7:06 PM  

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