[PEN-L:11215] Re: Econ Rent/tenure

[Robert Cherry <RobertC@xxxxxxxxxxxxxxxxx>]

    While some interesting points have been made concerning the relationship
of CEOs salaries to performance, there is a ceteris paribus problem.
Marginal productivity theory posits that other factors are held constant.
That is, there may be a multitude of other factors which are affecting stock
performance, including secular trends in Price/Earnings ratios which have
nothing to do with CEO performance.  Moreover, many other factors can affect
earnings other than CEO performance including the state of the economy.  (In
sum sense, linking CEO performance to some combination of changes in profit
rate and market share may be better to measure productivity since market
share may look at performance independent of the business cycle and P/E
changes.)

     What I am most interested in, however, is the validity of relating the
notion of economic rents to faculty tenure, particularly that of full
professors when there is no merit raises.  This is the situation in the CUNY
system.  Would it be correct to argue that given lack of accountability,
tenured full professors are earning economic rents?


Robert Cherry
Brooklyn College