[PEN-L:11207] Re: Rent question

[Terrence Mc Donough <TERRENCE.MCDONOUGH@xxxxxx>]

A concrete "experiment" in relation to this question is the executive
salaries in the British utility privatizations.  In all cases, CEO
salaries rose substantially after privatization.  This is interesting
because the neoclassical maximum competitive market value of these
individuals had been determined in the market prior to privatization.

Also the substantially lower salaries of Japanese CEOs would
seem to set a limit on the MP related compensation of CEOs with the
rest having to be ascribed to cultural and institutional rather than
market considerations.

The neoclassical defense of CEO salaries is clearly untenable.  Why
do they do it?  Some of it is ideological hegemony.  Some of it is a
personal identification with other "professionals".  The major reason
is, I think, to assert the universal existence of efficient markets,
even in the face of all evidence to the contrary.  Why not just admit
that CEO salaries are outrageous and prescribe the elimination of
market imperfections?

Terry McDonough