C'est Le Vol
It may or may not be true that language determines thought in subtle ways — that Chinese favors mathematical thinking, for instance, or German top-down organizational schemes, or Inuit a connoisseur's appreciation of snow — but anyone who dabbles in a second language soon comes to feel that it does. Take the ordinary American and British expression to make money — a case much in point, in these dog days of the imploding economy, and long (I confess) a pet peeve of mine. Stay within English all of your life, and the phrase seems perfectly literal and transparent. Making money is simply what you do when you serve fries, or work on the line as a unionized laborer, or go to the office each day to run a large corporation or a drug cartel. What else would you call it?
Visit Spanish even briefly, though, and you come upon the expression ganar dinero. Idiomatically translated this is "earn money," but the verb, ganar, also means "to win," and is the one used to express victory in games of sport and chance. To the speaker crossing over from English, thus, the phrase summons a vivid new perspective. Suddenly those wages seem so much less certainly yours! In the States, you have always marched off to work to make wealth — creating it more or less ex nihilo, in a solitary Calvinist sweat. But in Guadalajara, the wealth is already out there, the work of Nature or Fate or (more likely) Society. You sidle off in the morning far less self-importantly, fingers crossed, to try your luck; but you don't assume that it is exclusively or even primarily your own virtue that earns what you earn. If money finds its way into certain pockets and not others, Spanish seems to insist, that fact has little enough to do with anyone's inherent desserts.
A teacher married to a nurse, a lifelong Democrat, an unapologetic liberal to whom the slur "redistributionist" (in last fall's electoral melee) sounded more like an encomium, I feel, naturally, that Spanish wins this particular argument hands-down. At least, Spanish pulls into the light that half of the truth that we gringos are always trying to hide. For El Norte, of course, is a land defined by our over-the-top commitment to personal liberty. We are the country of immigrants who told Old Europe, Screw you, I'm outta here, of Emerson's "Self-Reliance," of settlers moving again to be out of earshot of their neighbors' axes, of the Marlboro Man, of the divorce epidemic and five-bathroom houses, of Take This Job and Shove It, of Huck lighting out for the Territory, of teenagers withdrawing into their bedrooms like snapping turtles into their shells, of secessionists from empire who then seceded from their own Union, losing the War but leaving the Stars and Bars as an enduring symbol, emphatic as a thrown finger, of our disdain of connection.
This passion for autonomy causes serious difficulty, it seems to me, when we norteamericanos try to get hold of basic economic questions: what value is, where it comes from, what's fair. Wealth by its nature is public and social, a collective creation and manifestation. But we want our relation to it to be as private as a trip to the bathroom. At work in the economy, we are effectively rowers in the same boat, organs in the same animal, bees in the great collective hive. But we want to imagine that we are hermits tending our gardens, pioneers caught up in a solitary agon with Nature (never mind those pesky Natives and the attendant ownership questions). We believe that we are so many hens, laying golden eggs one after another, unassisted. And so when we come to the weightiest of the economic questions, the $64,000 distributional question, we fail to grasp the huge role played by metaphysical fiat, power relations, and sheer inadvertence. We know that there are such things as luck and privilege, of course, not to mention graft and theft. But in the end we cannot let go of an obstinate sense of teleology, an insistent belief that people who have more must be worth more.
A long time ago, I taught an upper-division Humanities course in which it seemed like a good idea to assign The Communist Manifesto. By way of trying to explain Marx's idea that it would be fair to take the money of everyone in society, put it all in one big pot, and then divide it up more or less equally, I seized on the example of Michael Jordan's earnings for the previous year. These, as it happened, had recently been disclosed in the press, and when all sources were included came (if memory serves) to around seventy million dollars — a sum that, by a further happy chance, just about equaled our university's operating budget for the year.
Think about it, I urged my students. Is this fair? I'm a Bulls fan, I told them, I love to see Jordan play, I cheer too. But how much is his play worth? Is it equal in value to all the goods and services delivered, performed, and consumed in a year's time at Soybean State University? All the class preparation, lectures, discussions, research, and writing of six to seven hundred faculty; all the meetings and decisions and memo-drafting of close to a hundred administrators; all the work of groundskeepers, painters, buyers, mechanics, nurses, doctors, janitors, police, and other staff; all the power consumed in fifty-something large buildings; all the fertilizer spread on the lawns; all the water drunk in the dorms; all the depreciation on all the golf carts used to ferry new freshmen to their dorms on orientation day?
Finally, they admitted I had a point. There did seem to be a kind of disproportion in this picture. Perhaps indeed something like social injustice was underway, right here in America, no doubt without Michael's direct knowledge.
Well then, I persisted, wouldn't it be fair, or at least more fair, to do as Marx says: confiscate much of the income of Michael Jordan, and of others in his earnings bracket, in order to give me a healthy raise, you folks nice scholarships, and everyone free health care or better roads or a nice new war if we want one? Jordan could still go on playing basketball for the love of it, which is what he says he does anyway, and I could still teach for the love of it.
But to this point, emphatically, the class would not go. Granting that I had shown some inequities, any remedy of the kind Marx proposed would only make things worse. Far worse, they felt sure. It was not that my talk of expropriation stirred images of secret police and empty supermarkets and ghastly purges; these college juniors and seniors were, alas, more innocent of history than that. (Several of them took the graduated income tax, there among the radical solutions proposed at the end of the Manifesto, as a heinous assault on basic fairness. When I told them that in fact it had long been the law of our own land, both they and I were thunderstruck, though for different reasons.) But the thought of taking Michael's money tripped a response that was far more immediate. That would be wrong, period, and there was no need to think too much about it. It would be a violation, like attacking him physically. His money was his money was his money.
Firm intuitions of this kind are never entirely wrong, and I have to grant something to my students' instinctive defense of property rights and the principle of rewards proportioned (supposedly) to performance. In the end, I am no Marxist (neither was Marx); but I am more a capitalist fellow-traveler than a true believer. I believe that my cash and property are mine not in any final, existential sense, as my body and soul are mine, but more, let's say, as the five cards I have been dealt in the current hand of draw poker are mine: provisionally, by communal assent, because we have agreed to play the game that way. The argument against paying everyone exactly the same wage is not that it violates fundamental rights, but simply that no one has yet figured out how to make such a system work.
I find it astonishing that in this age, when global capitalism seems to be doing what European capitalism did in Marx's day — creating wealth beyond the dreams of avarice on the one hand, misery beyond belief on the other — anyone can still find much correspondence between what a person gets paid and what he or she "earns" in the moral and metaphysical sense. Indeed, examples of the opposite kind confront us at every turn. Where to begin? Lawyers charge four hundred dollars an hour for the service of prolonging their clients' misery, and doctors a similar amount for performing unnecessary tests aimed at protecting themselves from the lawyers. Insurance executives get even more to design systems aimed at keeping both doctors and lawyers in check, and pharmaceutical managers get another lion's share of the consumer's carcass by exploiting the patent rights of drugs developed on government grants. Then all the players go home to unpaid spouses, or to barely paid nannies, gardeners, and cooks, who have spent their days performing tasks whose value, difficulty, and necessity no one questions. Any intelligent Martian can see instantly that the money is going into the wrong pockets; only Earthlings, brainwashed, fail to notice.
Or take my own modest profession of teaching. Young teachers with nimble reflexes, full of energy and new ideas, get paid a subsistence wage. Many years later, having jumped through the right hoops and paid the right dues, burnt-out old geezers like me get paid three times as much — still no fortune, believe me — for doing the same job, less well.
Consider secretaries. A good one is usually the most helpful, diligent, and diversely knowledgeable worker in her (yes, her) office, and this by common assent. But when feeding time comes, she gets driven away from the kill, with the other lionesses who did the actual hunting, while the males eat first and most.
But the example most on everyone's mind, these days, is that of buccaneer executives who drive their companies into the ground, then depart with fabulous "golden parachutes" that seem to be (if there is any connection at all) an inverse expression of the value contributed. In all these cases (tendentious ones, I admit), probably none of the individuals are to blame as individuals — not even the skydiving CEOs. But our systems for dividing up the economic spoils are nearly arbitrary. There is no necessary or even usual connection between value awarded and value created.
At a party, a conservative friend explained to me what he saw as the logic of CEO compensation. In a large corporation, he said, an entry-level worker can make a mistake or have a bad day, and that will cost the company, let's say, five hundred dollars. But if the CEO makes a mistake or has a bad day — decides to build the factory in the wrong country, or signs a contract with the wrong supplier — that costs the company thousands or millions. The value and importance of his work is simply, by its nature, worth many times more than that of the line worker, which is why stockholders and boards of directors bid up CEO compensation packages so high. By this standard, the ratio of average CEO salaries to average worker salaries — currently in the range of 300–400, ten or fifteen times what it was in the 1960s — is, if anything, unfair to the CEOs.
A nephew of mine, a very bright man who until this year did quite well in the stock market, gave me a similar assessment not long ago. He agreed that when CEOs who have run their ships onto the rocks then paddle away with huge fortunes, it is a disgrace and a perversion. But then he cited the example of a CEO who had taken over a foundering corporation, turned it around, and within two years added several hundred billion dollars to its value, as measured by the Orphic barometer of the S&P. By the terms of his contract in the second year, this überboss received something like forty million dollars, and why shouldn't he? It was only a sliver of the value he had delivered to the stockholders.
These are thoughtful arguments. Finally, though, my answer comes out of Sancho Panza, by way of Friedrich Engels and Clarence Darrow. A person is a person is a person, say I, and he or she has just two hands, two shoulders, and one brain. There are only twenty-four hours in anyone's day. A CEO with an IQ of 180 is not contributing a dozen times more intelligence to his company than two vice presidents with IQs of 150, but, in fact, 120 points less. In the nature of things, one outstanding individual will never win a rugby match or a street fight against hundreds of merely competent ones (martial arts films notwithstanding), so the logic that equates the labor of one to the labor of hundreds is absurd on its face. If what we see is a heroic CEO, single-handedly creating value to the tune of many billions, we need to rub our eyes, look again, and ask what is really there. Excellent decisions made at the top amount to nothing if they are not understood and seconded and executed by competent minds and hands, over and over again, all the way down the line. And why were the decisions excellent in the first place? Because there was excellent advice and information moving up the organizational pyramid, not down, in the prologue. It is the organization as a whole that creates value, not one tiny part. For some purposes, it can be worthwhile to use synecdochic expressions like "Patton conquered the French midlands" or "Grant took Vicksburg." But we need to remember who did the actual marching, fighting, and bleeding.
Nor am I much impressed by the argument that the executive's salary — or Michael Jordan's — was after all contracted on the so-called free market, an entity to whose mystic dictates we are supposed to resign ourselves, either because they are inexorable as the law of gravity or because, quite to the contrary, they are somehow providentially right and good. In fact the free market is massively and intricately sculpted by collective decisions and pressures, however blindly made. Like language it proceeds by the principle of "coherent arbitrariness," evolving idiosyncratic conventions that then become perversely binding, so that we persuade ourselves that a shortage of wig powder or whale oil is simply a fact of Nature, now and forever. The free market can exist at all, in the words of the late Molly Ivins, "only within a carefully constructed cradle of regulation," and even then it periodically reveals itself as a spectacularly rigged game, as has been happening in spades this year. If the free market offers Michael Jordan the choice of playing for the Lakers or the Bulls, while it offers you the choice of mopping floors at McDonald's or Hardee's, there is no special reason to regard this as God's will. You shouldn't blame Michael, but you should realize that a different game would produce different options and different winners.
In fact there is one executive job that is commonly conceded to be more important and difficult than any of the others, the one whose holder's decisions affect the welfare of more people more consequentially than any other: the American presidency. The current annual salary for this job of jobs is all of $400,000, and this fact constitutes a devastating rebuttal to the idea that pay reflects worth. What a free country will pay for top performance, it seems, is a sum so modest that not only hedge fund managers would jeer at it, but drug lords, Big Ten Football coaches, B-list actors, and Beverly Hills dentists. It is true, of course, that America has had an unfortunate tendency to award the top job to idiots; but the reason has never been that we declined to pay more for better talent. Rather, we assume, quite rightly, that four hundred thousand does as much to procure ability and ensure performance as would four million or forty million.
By a rough but fair calculation, then, a paltry $400K is the most that executive performance in itself can be worth. How does that square with current practice? In this calamitous year, average CEO compensation has receded from the heights, back down to a mere $14.2 million. By my math, even this hardship, clearance-rack figure leaves $13.8 million unaccounted for; $13.8 million that has not been spent well; $13.8 million that does not turn the flywheels of the economic engine; $13.8 million of overpayment, waste, and misappropriation. What the missing fraction buys is nothing but the CEO's ability to get paid: his special expertise at bellying up to the buffet. This part of the compensation package has nothing to do with wealth creation, but only with distribution, a separate issue and episode in the economic drama.
From another angle, that $13.8 million looks like the premium we are paying for our myth of solitary creation, our refusal to see work and commerce as the collective activities they inescapably are. A sort of Clint Eastwood tax, paid for the privilege of imagining ourselves as lonely cowboys. So our American individualism gets turned on its head, and ends up rationalizing more extreme disparities of wealth than ever existed in the age of kings and nobles.
Here's an idea, then. Let's be generous and multiply $400K by — oh, say ten — and set four million yearly as the cap on all individual incomes in the nation, with anything beyond that to revert automatically to the public coffers. Hello, universal health care. Hello, better roads and schools. To anyone who says we are taking what is not ours, we will reply that, on the contrary, we are only restoring the money to its rightful owners, since it is self-evidently impossible that anyone's work could be worth more than four million dollars per year. The money was obviously in the wrong place; we merely put it back where it belongs.
Such ideas are heresy, of course, and have been largely discredited by the example of the old Communist bloc (keep an eye on China, though). Unhappily, it seems that an economy regulated by the principle of simple fairness runs so badly that even the folks at the bottom end up worse off than before, not better. Able to recognize a trump card when I see one, I hereby withdraw my proposal, on practical grounds. But to anyone who says my tax scheme would be morally unfair, I say, poppycock.
Hobbes long ago argued that, in a state of nature, wealth does not even exist, since it cannot be used or protected amid the "war of each against all" that inexorably prevails. Property becomes property, money becomes money, only when there is a strong central authority that initiates, however imperfectly, the rule of law. Far from being an afterthought or unnecessary encumbrance, government is the sine qua non of civilized existence, the precondition to anyone's owning or earning anything. When it taxes the citizenry, therefore, the nation is in a real sense merely taking its own back.
But in America we want to tell the story the other way around, siding with Locke and Rousseau instead of Hobbes. We put the individual first and society second, and regard economic and social bonds as somehow gratuitous — lesser, provisional, not really necessary. Though a good myth for many purposes (breaking away from the British, for starters), this vision becomes obnoxious when conservatives of a certain stripe take it too literally, equating taxation with theft, decrying government as a hateful nuisance even as they seek to join its ranks. Weirdly, the same voices generally celebrate and romanticize military service. The nation, it seems, has a right to demand your very life when it needs to; but as for your property — hands off!
Not to put too fine a point on it, we have just finished a long test of such ideas: eight years of disaster and decline, including two dramatic demonstrations, in Baghdad and New Orleans, of what really happens when government is removed. Point and set for Hobbes. And now the supposed creators of value, our superstars of industry, the high priests of laissez-faire and economic Darwinism, are lining up in Washington to beg for rescue from circumstances that, they explain, are beyond anyone's control. Indeed, their lack of control is exactly the point. They were not the creators of their firms' good fortune, and should never have been rewarded as if they were. It is nearly worth the price of the bail-out to see them come to the brink of admitting, at long last, that they have been as much the beneficiaries of an arbitrary caste system as any tenth-generation baron from the Old Country.
We are always in the middle of the economic game, so changing the rules is never a thing to be done lightly; and often there are good tactical arguments for lowering taxes, leaving income disparities alone, and so on. But such prescriptions from the right are not affirmations of bedrock principle. Insofar as they are valid, they are mere means to an end, one that is the only real touchstone of economic justice: the collective good, "the greatest good for the greatest number." Life, liberty, and the pursuit of happiness are unalienable individual rights. But property is not, because wealth comes only from community. Redistribution is not some unholy perversion, but a correct and normal function of government.
Remember, you heard it here first.
© John Kilgore
Previously published in The Vocabula Review