Yeah it might sound like a pipe dream, and I'd obviously only argue this philosophically at this point, but personally I think we grossly underestimate what will happen to our economic setup as the population pyramid flattens and we hit peak production of several critical resources in the next 50 years; some of which will make the energy problem look easy to solve. It's more like the call for a new Renaissance rather than policy prescription.

Also I don't think “rigged” is the right word, I would just say that I don't think that our society values things very well. I'm not against a market system, indeed it's probably the best way to distribute things based on values, I just think that our values are misplaced and thus leading to problems.

Well CS, first of all, I didn't mean a baseline comp for clockpunchers…I meant people that didn't work, at all.

Secondly, you need to understand that my viewpoint comes from a larger philosophical belief about the nature of our society. Simply put, I think we have far too many workers due to automation…and if we stopped being so focused on labor and embraced automation to the point that we could, then we'd see a nearly unimaginable amount of efficiency.

Historically about 75-85% of the population was needed just to grow food. This was roughly constant since food scaled with population growth. Now we have 2-3% in the US (yeah yeah, I know, illegals, but still that is only another few percent), which objectively speaking, makes more food than the entire world needs, if we cut back on meat consumption nearly entirely and 75% if Americans cut back to recommended levels. The #1 issue facing humanity since its existence has been rendered moot in the last 50 years and now hunger is entirely a distribution problem, not a production problem. Yes this will be challenged as oil peaks, but with targeted genetic manipulation not even that will be an issue.

Likewise, intellectual property takes a long time to develop, and I truly feel that a small percentage of the population can actually contribute efficiently. This has led to the paradox that productivity hasn't increased in the last 50 years even though the workforce in white collar jobs has exploded. Greenspan has said many times that this is puzzling, but to me it's obvious that stuffing people in these jobs doesn't really add any value and after a certain point even reduces efficiency. I don't think that this would really change much even in an ideal system (the productivity gains I referred to above were either one time deals or due to less inefficient building) and I think corporations are starting to realize this, as they have reduced jobs over the last 10 years.

So what's left for the rest (like 60-70%) of the population? Service jobs and manufacturing. But manufacturing doesn't need very many people — especially if we finish automation — and our service economy is already at an unsustainable level, where we have at least a decade if not two of overbuilt stuff. And even that level is only because of our grossly inefficient city layouts and lack of good transportation.

We will need a ton of people to care for the growing amount of elderly, but other than that we have a massive excess of labor. So to me, I foresee an efficient economy consisting of a large group of people that choose not to work at all and they are just given a lower middle-class lifestyle and can focus on art/cultural stuff/self realization/whatever (ok most of them would probably just sit around and watch TV…I'm being idealistic!), a large group of average workers that work much less than they would now, and have like 6 months on/6 months off (simply because there are even going to be too many average workers) and would have a solid middle class lifestyle and a small group (10-20%) of the population that works fulltime and has an upper-middle/upper class lifestyle. Oh and of course small businesses would still be encouraged, and a lot of people would do that — perhaps even more than now — but most of them do fail.

I mean obviously this would require a massive restructuring of society that will never happen in our lifetimes (and may never be realistic) and you can argue about what we should do now, but on the philosophical level this is what I think is the root cause for many of our imbalances and wasteful spending.

They are? The countries you're holding up as models are not just economically homogeneous, they're racially and culturally homogeneous as well, to the point of xenophobia in Japan. So what are you proposing to do with our black and immigrant citizens?

An example: my uncle is in public education in a school district where kids speak over 100 languages, and teaching them is a real challenge. He went to Japan and asked educators there how they deal with kids who don't speak Japanese. He couldn't get a direct answer, but he concluded they basically don't. Kids aren't allowed not to speak Japanese, and those who can't aren't accommodated.

I'd say the public policy implications for us are not obvious at all.

And you probably don't see why men deserve more than women. But if you make a serious study of the details, it turns out there are a whole bunch of reasons that owe little to rigged rules and much to individual choices.

I think you'd find the code monkeys have invested a lot more in education and refining their craft, they show up to work more reliably, they work longer hours, they take more responsibility for the end quality of the product, and they add more economic value (ie, their outputs are worth substantially more than their inputs).

Regardless of the philosophical problems with precise measurement of contribution (including but not limited to politics and the fact that some positions are inherently more visible and thus prone to getting more credit than warranted) there is the very repeatable problem that if you ask a group of people to estimate their percent contribution then the sum will always be around 130-150%. These two issues are why few companies really bother with performance based pay except maybe as a small bonus relative to baseline salary…otherwise it could get really ugly.

I think in order to get at the system that functions best, you somewhat have to factor out the happiness quotient and look at rewarding hard work to improve productivity. I'm sure you're right about relative perceptions coloring a lot of people's satisfaction/ happiness- but the extra compensation still functions as a carrot even if the person chasing the carrot isn't ultimately fulfilled by it.

Yes that was the gist of my argument as I feel that this is undoubtedly true. Sure there are a small percentage of people that make outsized contributions to society that should be compensated more, but I feel that they are the exception rather than the norm. The true problem solvers and risk takers are the minority in any industry and I really don't see why a code monkey deserves twice as much money as an efficient line worker — or heck even a manager at a fast food restaurant.

On a personal level I'd like to see class distinctions have much more overlap and performance stratification be much greater. That would mean that the average worker in [nearly] any job would get roughly the same pay (I do view a few specialties as falling outside of this such as doctors…..and uh, I'm having a hard time thinking of any others) while the 10th percentile would get roughly double. The top 1% would still be highly dependent on industry because I think it should scale with profits and obviously some businesses have much higher potentials than others.

You may say that this would dissuade people from getting a better education since they won't get paid much more if they are merely average. You are probably right, but my argument would be that the primary reward for education would not be money, it would be the ability to have a more satisfactory job. I feel that this would raise the skill level of the average worker in white collar industries, as each person going in would be doing it primarily for the intellectual pursuit, and also it would lower overall enrollment such that education costs would fall and make it more affordable for them. Right now it seems like about 50% of college grads I knew just went to make more money and they just go into their jobs and sit there and don't really contribute one iota more than what is spelled out for them because they don't care about the job at all.

This is to me undoubtedly true both across and within class distinctions. This is why some financial people can millions of dollars and be unhappy because the guy next to them is making more even though they perceive* that they are working just as hard if not harder. This is why our “working poor” are middle class by the global (and upper middle class by historical) levels but are still rightfully considered poor.

But no, in general based on my own experience and research, I am all *for* performance related pay. Heck, when thinking about how I'd ideally want to do it, I'd be pretty extreme that way.

* There is the other problem that people overestimate their contribution and underestimate other people's, so most people will feel underpaid.

In the discussion of being paid relative to how hard one works, I just want to interject that there should be other factors at play also. Instead, I would say that one should be compensated proportional to their level of contribution to society (in an ideal world, which also assumes that everyone has equal opportunities to contribute), which is a factor not only of hard work, but also of good decision making (ie. Should I pursue higher education to increase my knowledge and skills? Should I start this business to provide this good that I think there is a need for? etc.)

This is probably a minor point, but could become important depending on where this discussion goes. If “hard work” is the only requirement, then this feeds the view that blue-collar workers are getting the shaft because white-collar workers often make more but work less.

In huge corporations, I do think the scale gets ridiculously out of proportion- largely because compensation ends up being sort of relative to 'assets under management', so when you get these megamergers the behemoth corps are netting such enormous proceeds that the CEO/upper management echelon is getting a similar percentage as a CEO of a small corp would make but it's wildly out of proportion to normal salaries. And recent events, IMO, have shown that those CEOs can't possibly really manage assets of that size, so the companies should never have been allowed to grow to the point that they're too big to manage and obviously the compensation shouldn't be so high.

But in smaller, manageable sized companies, I think a normal pay gradient is important, and the upper levels won't get to those absurd levels.

In huge corporations, I do think the scale gets ridiculously out of proportion- largely because compensation ends up being sort of relative to 'assets under management', so when you get these megamergers the behemoth corps are netting such enormous proceeds that the CEO/upper management echelon is getting a similar percentage as a CEO of a small corp would make but it's wildly out of proportion to normal salaries. And recent events, IMO, have shown that those CEOs can't possibly really manage assets of that size, so the companies should never have been allowed to grow to the point that they're too big to manage and obviously the compensation shouldn't be so high.

But in smaller, manageable sized companies, I think a normal pay gradient is important, and the upper levels won't get to those absurd levels.

You could have an unequal society where some people choose to not work hard and get only the basics, and everyone that works hard gets roughly the same amount, and people will be happy in general.

To me, Mikkel's saying that there might a society in which there are people who work hard, and people who choose not to work hard. Those who don't have only the basics. Those who DO work hard all have some roughly equal amount of *more* than the basics.

Not quite the same thing, I don't think, as workers and non-workers getting the same reward.

Of course, that just moves the problem to that hard-working group. Are they all working equally hard? And do they perceive that they are?

Maybe in some societies where there's a more collectivist ethic, the less productive workers would be less numerous and things could be more equitable like that, but in our society there seem to be plenty who will slack off if they can and then a few who always feel obligated to do more than their fair share (but would not be happy if that extra work isn't amply rewarded.)

I also strongly agree with adelinesdad's comment about causality with regard to the social conditions.

WHAT? Have you ever worked a job where anyone would go along with working harder than their peers and receiving equal pay in the process? Maybe it's this 'service economy' or predominately white collar reality that America lives in that allows for such thinking. In such a world it may be easier to pretend to work as hard as the next guy when one is just pushing paper around or punching cash register keys. However – in the real knuckle busting and back breaking reality of manufacturing there is no delusion about who works harder and why that person should make more. Does anyone remember the criticisms rendered against the Soviet Union and its workforce?

“Those who cannot learn from history are doomed to repeat it.” Santayana

What would be the best example of the U.S. to follow. Unless you can find a country that is less than 60% white that has a high level of equality and is well off economically, then please forget the idea.

Also, if equality is a goal of the government then why support open borders, unlimited immigration, a welfare state, and a government educational policy that seems to be designed to trap children in bad situations.