Introduction
What is more important, how well we live or how we live in comparison to others? If we have a life with decent food and clothing, access to healthcare, comfortable housing including heating and AC, transportation, a cell phone and a TV with multiple channels, does it matter if Warren Buffet is worth $87 Billion?
That’s the subject of today’s 10-minute podcast.
Continuing
"The only person you should try to be better than is the person you were yesterday." -Unknown. Lots of people are going to say this person or that person first or most famously said this; the point is we all know this to be one of the major guiding truths in our lives. Or at least it should be. So why then is there an ever-increasing amount of conversation focusing on inequality, perhaps the most dangerous form of comparing ourselves to others?
Let’s ask a few setup questions. Inequality in what?
Results? I trust that no one is seriously saying that everyone’s results should be the same.
Talent? I don’t have, and never had, the talent to be an NBA star. And even the most ardent supporters of government solutions realize that no law can change basic talent levels.
The law? We are all equal under the law. If you don’t agree, name one law that promotes, or even allows, inequality.
Opportunity outside of the law? Yes. Of course. My parents could not afford to send me to college or grad school. Some parents send their kids to private school from K-graduate school. Unequal? Yes. Unfair? Oh, hell no.
Frederick Herzberg, was an American psychologist who became one of the most influential names in motivation and management. He separated what he called hygiene functions from motivational factors. His work showed that once certain functions, the hygiene functions, have been satisfied, advancement in those areas does not create significantly more satisfaction and motivation. For example, once certain compensation and work area needs were met, more of the same made little difference. After the hygiene functions had been satisfied, the motivational factors needed to take over. Things like achievement, recognition for achievement, the work itself, responsibility, and growth or advancement, and the approval of respected superiors are the key. The hygiene functions need to be in place for the motivational factors to come into play. But once the hygiene function needs have been satisfied, the motivational factors are the key to growth and satisfaction.
Governments, at best, can provide the only hygiene functions. Only individuals and other private entities can supply the growth and satisfaction that comes from adding the vital motivational factors.
Where does all this leave us with the initial question of which is more important; quality of life or comparing lives? Given that all results cannot--and should not--be the same, if we are concerned with inequality, aren’t we left trying to come up with an acceptable ratio between, say, the bottom 10% and the top 10%? There are useful examples from the corporate world. Ben & Jerry’s, the famous ice cream company, once had a 5:1 rule where the CEO’s total compensation could not be any higher than five times that of the lowest paid employee. When Ben Cohen was set to retire, and a search for a new CEO began, the ratio was increased to 7:1. Realizing the ineffectiveness of the ratio’s ability to attract, retain and motivate a valid candidate, the company decided on a 17:1 ratio in 2000. Shortly afterwards the pay cap was abandoned. More currently there was an article in the left-leaning Guardian that says that no CEO should earn more than 1,000 times the lowest paid employee. We will use that ratio elsewhere.
Any reasonably smart business is paying its employees at the market rate and is charging for its goods and services at the market...