- The Washington Times - Saturday, June 23, 2007

No one has the least idea how much money a corporate chief executive deserves to earn — is that the word, “earn”? — but if you don’t hear a campaign issue starting to crackle and sizzle, you just aren’t listening.

Here’s the operative point: Chief executive officers on average earn 179 times as much as their ordinary workers.

Here’s another operative point: Voters can be persuaded by diligent political effort to dislike and despise not just the recipients of this largesse, but also, more to the point politically, those who enable it. Aha. Republicans. That’s what Democratic strategists are thinking. Who encourages and benefits from these outrageous levels of pay? Those whom the plain folks’ party, the Democrats, seek to oust from the White House.

I don’t blame the Democrats, really, for looking with such interest at an issue that plays in Peoria and everywhere else, namely, The Unfairness of Wealth Distribution. No issue is older in human experience.

The divide between rich and, well, let’s say, less rich is a given in the politics and culture of all nations and societies. It has scriptural associations: Dives and Lazarus, rich young rulers, God vs. Mammon. Dickens used Ralph Nickleby, Ebenezer Scrooge, the Marquis St. Evremonde to wonderful effect. We are bred to wonder at or resent the gap — size undefined — that exists between the rich and, yes, us, plain old ordinary us. No wonder politicians use the wealth gap as leverage. For one thing, there aren’t nearly as many of the rich as there are of us.

Well, as I say, get ready. Stock and stock options, at a time of rampant bull-ism on Wall Street, helped the chief executives of the Fortune 500 to average 38 percent increases in compensation last year, for an estimated total take of $7.5 billion.

I know. Seven point five billion. It isn’t … it isn’t … it just isn’t fair. So Hillary Rodham Clinton and her consultants, after she snags the presidential nomination, may be counted on to inform us next year, (notwithstanding that she and her husband, a long way removed from real estate deals in the Arkansas backcountry, may be worth a combined $25 million).

It isn’t fair? Maybe not. What is fair? That’s the question. What’s fair, and especially, who gets to decide?

Minds do and should boggle at the notion of multimillion-dollar paydays. Minds should boggle a great deal more at the notion that “fairness” and “equity” are determinants in the matter of compensation. Marketplace economies don’t work this way, based as they are, and properly so, on the right and risks of choice.

If we’re going to have a free marketplace — and does anyone have a better suggestion? — we have to recognize the right of a particular company to decide, among many other things, how much a particular executive is worth — and pay him or her accordingly.

Stockholders don’t have to like it. What they have liberty to do is work for a change in policy: more “rational” pay or whatever else comes to mind. The main thing is that the executive should earn his keep — whatever the size of that keep.

In the end it comes down to: Who says such-and-such level of compensation isn’t fair, the marketplace or the government? The government? How, pray, does a public institution know the means of sorting out non-governmental questions, such as how best to make a company run?

It comes to something else: the need for what we might call moral restoration, whereunder the massaging of ego and the raising of palaces is a slighter priority than it seems to have become. Who needs these big bucks the companies dole out? Fewer maybe than any of us suppose — even those of us who acknowledge a company’s right to do whatever is normally perceived as honest. Is “more, more, more” the formula we wish our culture as a whole to endorse and pursue in all circumstances? Or in some circumstances is “less” — less house, less car, less jewelry — a goal worth civilized and nonpolitical discussion?

Could be. Just don’t expect much talk about it in a presidential year.

William Murchison is a nationally syndicated columnist.