Coming to terms with being human.


Arm Wrestling the Invisible Hand

You know about Adam Smith’s invisible hand, right? Basically, he realized that everyone tends to look out for themselves and yet the public interest is served by this self-interest. Yes, I simplified it too much, but that’s what the link is for. Smith’s observation is a good one. There are processes inherent to social systems that do help everyone. The only problem is this: the invisible hand likes to b****-slap the poor.

In a network, the medium of exchange tends to pool in certain areas. A few websites receive most of the traffic. Some creature becomes the head predator of the local food chain. Bill Gates and the Vatican exist. The rich always get richer. In the case of money, this means that all the cash that is busy flowing up the chain is noticeably not moving back down to the bottom.
Sometimes a society has enough wisdom and heart to compensate for the natural flow of capital. Methods are devised to distribute money more equitably. In the United States, these systems don’t exist.
Wait, did I say that? I mean America is the best nation ever. No economic system has ever been more fair and life-affirming. God Bless the USA!
Anyway, look at this. Of the world's 100 largest economic entities, 51 are corporations. The leaders of these and other corporations also happen to be really stinking rich.

I have a bias. Allow me to share it. I do not believe that individuals are entitled to wealth. I think people should be paid for their service, don’t get me wrong. However, a CEO is not entitled to more money than a janitor. He may receive more, but he is not deserving of more. He is just lucky; graced by the system. If the system decides to gift him with less money, so be it.

I believe we should create a new business model. In this model the highest paid worker’s salary would be linked directly to the lowest paid. The link would be by percentage. It is not uncommon for an American CEO to receive a salary a hundred times larger than his workers. So let’s tie him into a 10 to 20 percent range. If mail clerk A receives ten grand a year, then the big boss can’t make more than 100 to 200,000 dollars a year. That is a hell of a lot of money.
The great thing is this. Mr. Greedy at the top can still make more money. All he has to do is pay his employees more. Society becomes forced to pay attention to the lower class by taking advantage of natural self-interest.
So that’s the idea. Sure, there are a lot of details to work out, but its better than what we have.


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