Clarifying executive power
Peter Frase is right (“Are CEOs workers, and should we care?”) that talking only about ratios of CEO to worker pay ignores positions in the M-C-M’ circuit. The pay of CEOs and other top executives is almost entirely a return on capital. Perhaps there’s some reward to skilled labor there, but nothing approaching $11 million. Unlike workers, who live under harsh labor discipline, your average CEO is lightly supervised by a board. It’s a rare day when a bad CEO gets fired. The CEO class enjoys an esprit de corps; they sit on each other’s boards where they endorse large pay packages. Workers are barely allowed unions. And CEOs have enormous social power. They help run the government and the prestigious cultural institutions. They’re major players in the ruling class. I regret not having mentioned all this the first time around.