The Wages Of Dumb
I’ve decided not to surf the internet anymore and just
steal from let Vodkapundit bring me my news. It’s the best source for stories about pantless intoxicated female schoolteachers. On her first day of work, no less.
Also of note is his his semi-regular commentary on the latest babytalk by juicevoxer Matt Yglesias. And by “commentary” I mean “smart-ass comment on how ridiculous Yggy’s article is.” Such as Yggy’s” case for a maximum wage.” He uses professional basketball as an example of how such a cap works, noting that the NBA has a salary cap and because of that, players are less motivated to sign with a team for money than for things like “teammate and title chances.” But here’s the kicker –
The most important lesson, however, is what the maximum salary doesn’t do — lead the stars to Go Galt and take their talents to the retirement community.
For starters, the top stars get paid a lot of money! But more than that, it turns out that to be successful at high-level professional basketball requires a certain level of passion for the sport and competitive instinct. Players want to win games and outshine their rivals on the biggest stages. Stars not only play for sub-market wages professionally, but they often play for free for their national team in the Olympics. Top performers like money, but they also take pride in a job well done.
This is followed by a recap of tax rates from World War II on, and the results of changes implemented during Reagan’s administration. Although there’s a comparison of the pre-Reagan and post-Reagan economies (yet nothing about the actual Reagan years), no mention is made of a cutoff point in the post-Ronnie years. Do we stop counting at 2000? Or do we include the dot-com bubble bursting and the endless post-2008 recession?
But don’t think about concrete numbers. What matters here is the feelings involved –
A related issue is raised by Facundo Alvaredo, Anthony Atikinson, Thomas Piketty, and Emmanuel Saez who find that lower tax rates have shifted incentives for executives at big companies such that effort is now “diverted to increasing their remuneration at the expense of enterprise growth and employment.” In other words, in a high-tax regime executives compete to run the biggest, best company for pride and glory whereas in a low-tax regime they compete to take home the biggest paycheck.
Because execs want to play for free every four years in the Executive Olympics. And have more pride and glory to distribute among their workforce.
I also get a kick out of caption beneath the last photo – “happy German factory worker.” Potemkin on the Rhine.
I could go into more problems with this piece, but it’s all ultimately irrelevant. Regardless of arguments for or against such a super-tax, it really comes down to two points –
Point one is that given the problems that come with a minimum wage, is a maximum wage really a good idea?
The second point comes down to property rights. If the NBA owners freely agree to cap their salaries, that’s their business. Imposing a tax by legislation is a different story. This was best summed up in the 80s by the legendary sage Bobby Brown –
I made this money, you didn’t
We outta here
Posted on August 7, 2014, in Economic$, Liberty and tagged cafe hayek, economics, law, liberty. Bookmark the permalink. 2 Comments.
Don’t the star players make more money via endorsements than from salary anyways? Their success literally translates into money for them. And power. That kind of situation is not applicable to many other fields. If any.
Very true. It voids the argument about the maximum wage in basketball, because they aren’t signing up just for what the NBA itself offers them. They do an end run around the entire salary cap issue. I don’t recall too many corporate executives getting paid to compare Tide to Brand X detergent.
But, y’know, taxes. Because equality. Or something.