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The $70,000 Capitalist

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6-25-CEO-Pay

The credit card processing executive who decided he would raise the minimum wage for his company to $70,000 a year got a lot of attention this week. It’s certainly an interesting experiment at the very least. Got to give it to the guy–he probably made a really smart long-term business decision because all of a sudden he’s famous and that may well attract a lot of new clients. The exchange of short-term personal profit for long-term growth is pretty unorthodox in this era of the quarterly profit report. Of course this could never ever happen in a publicly traded company. The long-term significance of this experiment is probably not all that great, but at least it’s a sign that income inequality and CEO pay are real issues that at least someone is taking seriously.

What’s more interesting to me is the total right-wing freakout.

Sandi Krakowski, an author and Facebook marketing expert, posted on Twitter: “His mind-set will hurt everyone in the end. He’s young. He has a good intent, but wrong method.”

Patrick R. Rogers, an associate professor of strategic management at the School of Business and Economics at North Carolina A&T State University, wrote in an email: “The sad thing is that Mr. Price probably thinks happy workers are productive workers. However, there’s just no evidence that this is true. So he’ll improve happiness, only in the short term, and will not improve productivity. Which doesn’t bode well for his long-term viability as a firm.”

Perhaps the most prominent attacker was Rush Limbaugh, the right-wing radio host, who labeled the move “pure, unadulterated socialism, which has never worked.”

He added: “That’s why I hope this company is a case study in M.B.A. programs on how socialism does not work, because it’s going to fail.”

Most critics were not as ideological as Mr. Limbaugh but were nevertheless put off by Mr. Price’s deviation from trusting in the market, both to set wages (his own as chief executive and that of his employees) and to maximize his own profits. Overpaying workers may make them lazy and is likely to inspire resentment among colleagues who once sat on the higher end of the pay divide, they warned.

During an interview with Mr. Price on MSNBC’s “Morning Joe,” the co-host Mika Brzezinski noted that people would probably say “you’re a terrible manager.”

Another guest, Sam Stein, an editor at The Huffington Post, was simply flummoxed. “Are you crazy?” he asked.

Three things come to mind reading these responses. First, is the religious belief in “the market,” which is presented as this natural force like gravity but which of course is nothing but a serious of decisions made by humans about how to organize their economy. The idea that one would interfere with this natural force that tells you to make as much money as possible and screw everyone else is an apostasy that must be ridiculed and crushed. Second is the lies that well-compensated workers aren’t productive. There is of course an enormous literature suggesting that happy workers are indeed productive workers. Here is just one piece of that literature. The upshot of Patrick Rogers position is that corporations should treat workers as poorly as they can since there is no connection between happy workers and productive workers. So we might as well drive them like slaves. Which is basically the economic ideology of the New Gilded Age. Third, is the idea that this guy is committing class suicide, betraying the world of executives and giving credence to those who think that the government might need to do more to regulate income inequality and CEO pay. Limbaugh blathering about socialism once again shows that he doesn’t actually know what socialism is, but also demonstrates just what a threat this move is for the vast majority of American capitalists and their lackeys.

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