Market Whys and Human Wherefores: Thinking About Markets, Politics, and People - By David Jenkins

Challenge,  Sept, 2000  by Edward Chase

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The repetition in Jenkins's text is not unwelcome, because it often consists in apt quotations from a disparate core of economists bolstering his theme. It's hard to imagine a non-meritocratic world--how dull it would be, with sameness everywhere; and how would merit, excellence, be properly rewarded? But Jenkins rightly deems the degree of inequality today as unconscionable. In the land of the free and home of the brave, the familiar American statistics are dismaying enough--the wealthiest 1 percent of households own 57 percent, six times the value owned by the bottom 90 percent. One can easily multiply such examples that define egregious inequalities. They have become a staple in economic journalism.

The numbers have subtler significance, too, as Jenkins and other social critics note that excessive remuneration today influences the way in which talent is distributed. Compensation excesses for top corporate executives, lawyers, and doctors act as a magnet to attract desperately needed talent away from famously ill-paid public service professions, like teaching and government. Small wonder that ill-paid public school teachers' average College Board scores fall close to the bottom third of all takers.

In America the Securities and Exchange Commission has ruled that questions of executive pay can come before the stockholders for a vote. This is a palliative that has not caught on. Recall that when the late Steven J. Ross of Time-Warner got a $78 million paycheck over a few stockholders' protests, he indignantly retorted this was his "entitlement"--the term reserved for welfare outlays or pensions! Fun if bitter reading are gadfly "Bud" (Graef) Crystal's exposes of pay excesses, but little if anything comes of this. CEOs can control their compensation any number of ways: through stock-option schemes of their own devising; by choosing friends as directors and rewarding them handsomely; by arranging interlocking directorships with corporations that are suppliers.

The cover photo on Jenkins's book shows him in clerical garb confronting journalists and respectful police while surrounded by his constituency of Durham miners suffering in a declining industry. But Jenkins's book does not even mention his travails in that area. He is concerned, rather, with the philosophical issues posed by the deification of the market, not with local economic traumas. Nor is he a Jeremy Rifkin given to apocalyptic prophecies. He keeps his cool, but he is relentless and able and deserves a hearing.

EDWARD CHASE is a former chief editor of New York Times Books and the New American Library and a frequent contributor to a variety of magazines and journals.

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