Irate employees or not, we know that the uber rich are tone deaf and insensitive to the plight of the ordinary Joe. So it is conceivable there will little consequence on executive pay directly from this rule. I wonder, however, how the general public will react to further disclosure about CEO pay. Might that matter? (For example, it might add political cover to raising a variety of taxes - on capital gains, on very high incomes, on estates, etc.)
In an earlier piece on CEO pay, a comparison was given between CEO pay and the pay for pro athletes, something that is already in the public eye. To date the public has generally been quite accepting of what pro athletes make, but I wonder if we might start to see some pushback on this for a variety of reasons, not the least of which is a perceived sense that very high athlete pay and corruption in sport are tied at the hip. And if that did happen, might there be pushback against very high pay in general, regardless of the occupation?
There is a sense that America is in decline that is quite widespread. There will be a tendency to compare America to other civilizations, ancient Rome in particular. There will be questions about whether America following the same trajectory is inevitable or if that trajectory might be reversed by changing the social philosophy that guides our collective behavior. It's this sort of thinking that got me to do a Google search on "The Puritan Ethic" (without the quotes). I found the paper linked below, which I'm in the middle of reading. (You need access to JSTOR to read beyond the first page.)
The Puritan Ethic and the American Revolution on JSTOR via kwout
Reading this, I was struck by how much in common there is in the description of The Puritan Ethic with what my parent's beliefs were about our purpose in life. Both of my parents came of age during The Great Depression, my dad in New York City, my mom in Nazi Germany.
It is worth commenting on the other aspects of these beliefs beyond the faith in hard work. Veblenesque conspicuous consumption is anathema to these beliefs. So too is an exclusive focus on self with an absence of concern for others in the community. Thus, this ethic would not tolerate the current Libertarian stance, with its sole focus on individual freedoms and the absence of social responsibility.
It seems to me it would be good politics for the Democratic candidates to embrace The Puritan Ethic and in so doing make extensive reference to the American Revolutionary War. Such a connection between then and now is typical of Conservative thinking, particularly the idea of Original Intent. So an open discussion of The Puritan Ethic would in part be a way to appropriate our history toward a more Liberal conception of now.
Let me make one more point and then close. Last week there was another story in the Times about Dan Price and his company where he pays his employees $70,000, largely by bringing his own compensation as CEO way down to where there is essentially no hierarchy in earnings at all. It is an interesting experiment to keep watching, to see if it can persist and then create copycats. But even if both of these happen, it is still a far cry from getting something along these lines to happen at big companies, like Oracle with its out-of-this-world compensation for CEO Larry Ellison. What might be done to flatten compensation at such places? Last winter I wrote a post called Taming The Big Squeeze, which asked that sort of question. (Among the suggestions was to look at the full Gini coefficient at the company and not merely the multiple between the CEO and median pay.) Underlying this was the more general question, can the market reform itself in a way that is more consistent with The Puritan Ethic?
I doubt it can, but I hope otherwise. In the meantime we should be debating social philosophy as much or even more than debating about government programs. We can make the most progress that way by harking back to when the nation was first being formed. Exactly this happened during the era of Progressivism 100 years ago. It would be good to repeat that experience.