Another review of Piketty, by Lawrence Summers:
This paragraph interested me, especially the last sentence:
"There is plenty to criticize in existing
corporate-governance arrangements and their lack of resistance to executive
self-dealing. There are certainly abuses. I think, however, that those like
Piketty who dismiss the idea that productivity has anything to do with
compensation should be given a little pause by the choices made in firms where
a single hard-nosed owner is in control. The executives who make the most money
are not for most part the ones running public companies who can pack their
boards with friends. Rather, they are the executives chosen by private equity
firms to run the companies they control. This is not in any way to ethically
justify inordinate compensation—only to raise a question about the economic
forces that generate it."
I haven't seen that point raised in the debate about
executive remuneration, much of which seems to focus on ways to deal with the
problem rather than an analysis of why the problem has arisen in the first
place. With many corporate governance
issues, looking first at the history might provide an informed grounding for
policy development. But I would say that, wouldn't I?
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