The inequality that sends billionaires into space is not an independent and isolated feature of the contemporary world. But let’s not start there. Let’s start with something ‘easy,’ Wittgenstein’s Tractatus, then we can think about the meaning of life, and then we can take a look at inequality – kith and kin to those billionaires. I end with a somewhat whimsical suggestion for a Twitter tax for the rich.
This is something of a grab bag and a parking lot. I’ve been thinking of these things and put them here so I know where they are. In time I’ll attempt to make sense of them. Maybe.
Wittgenstein’s Tractatus
I recently read a post by Rohit (The Architecture of Knowledge) that reminded me of Wittgenstein’s Tractatus Logico-Philosophicus. I asked him about it and he replied that, yes, he was familiar with it and that it was “an inspiration forever in its scope and ambition.”
I understand where he’s coming from. I read it early in my undergraduate years at Johns Hopkins and it had a strong effect on me. Yes, for its logical structure, but also for its last proposition: “7. Whereof one cannot speak, thereof one must be silent.” I’d almost say its appeal was evenly split by that proposition and by the rest of it.
Looking back, it is a peculiar work. I went on to study computational semantics in my graduate years at SUNY Buffalo where I studied computational semantics with David Hays (while working on a degree in English literature). There I certainly was interested in something one might as well call “the architecture of knowledge,” that is, the structure of human knowledge. For the most part we – members of Hays’s research group – were interested in general principle, on the one hand, and small scale structures on the other. Yet my first major piece of work, an analysis of Shakespeare’s Sonnet 129, certainly implied large scale structure, as did my dissertation, “Cognitive Science and Literary Theory” (1978). That work certainly looks very different from Wittgenstein’s Tractatus.
Wittgenstein was much taken with symbolic logic, which was relatively new at the time. He took its propositions to represent, that is, to be capable of representing, facts about the world. The world itself? Is that what he was chasing? Or did he think of those propositions as representing what Noam Chomsky came to call mentalese, the conceptual language of the human mind? Perhaps he did, but if so, he later came to rather different views on such subjects. In any event it certainly doesn’t look the work I did with David Hays or, for that, matter any of the roughly similar work others were doing at the time (see, e.g., John Sowa’s comprehensive website on knowledge representation).
Of course representing how we think about the world is very different from representing the world as it really is. That’s something fraught with metaphysical difficulties. And yet that’s something I’ve given some attention to in recent years, I’m thinking particularly about my work on pluralism, but also my more recent work, What economic growth and statistical semantics tell us about the structure of the world. This work, however, is quite different from, has a very different texture than, the earlier work on conceptual structures.
That there is a clear difference between these two bodies of work suggests that we’ve learned something in the decades that have passed since Wittgenstein wrote his Tractatus. That work, it seems to me in retrospect, is neither about the world nor about our representations of the world. Or it is indifferently about both. It is an undifferentiated metaphysical ether.
To live a meaningful life
Meanwhile, our visions of the future are vapid, a theme I’ve been exploring in a recent series of posts on billionaires-in-space and in a post on our visions of the future. I think this is linked to various posts I’ve made about living a meaningful life:
- Scott Sumner, Meaning in Life,
- Our Rage for Order and Coherence,
- Personality, understanding, and anxiety as the driver of cultural evolution [Tech Evol],
- Fear of death as a driving force in human (cultural) life
Our visions of the future are not coupled with, do not emerge from, a belief in living a meaningful life. Absent such a belief, billionaires going into space collapses into self-regarding joy-riding. These seem to be people unconnected with the world, holding themselves above and outside the world. They are hollow men.
But how does the human mind, the human spirit, find itself at home in the world? For that’s what’s at stake. In a post about Mark Moffett’s The Human Swarm I made some observations about identity that are relevant to the question of meaning:
The argument that needs to be made is that our nervous system affords us open-ended awareness of the world. I suspect that’s a joint product of the active nature of the nervous system and the emergence of language. On that active nature, the nervous system doesn’t passively take the world in, but rather actively probes the world through continuously projecting expectations – think, for example, of the model William Powers developed almost a half century ago in Behavior: The Control of Perception (1973). Thus perception is a process of verifying those projections (or, to use a more current language, updating Baysian priors).
The emergence of language leads to an endless curiosity about everything: What’s that? How does it work? Where’d it come from? Living becomes thus becomes a dialog with the world. And the question, Where did WE come from? will arise in that process. The answer initially takes the form of myth, of stories about origins. And those stories, in effect, establish the link between a society and world. That too is a matter of identity.
Those same myths and stories direct our search for meaning in life. Where do stories of billionaires joy-riding in space direct that search for meaning?
Inequality, executive pay, and stagnation
Back in 2019 Tyler Cowen published a short article in Time, Why CEOs Actually Deserve Their Gazillion-Dollar Salaries, which was excerpted from his recent book, Big Business: A Love Letter to an American Anti-Hero. After acknowledging that that top CEOs make 300 times as much as the average worker, Cowen argues:
While individual cases of overpayment definitely exist, in general, the determinants of CEO pay are not so mysterious and not so mired in corruption. In fact, overall CEO compensation for the top companies rises pretty much in lockstep with the value of those companies on the stock market.
The best model for understanding the growth of CEO pay, though, is that of limited CEO talent in a world where business opportunities for the top firms are growing rapidly. The efforts of America’s highest-earning 1% have been one of the more dynamic elements of the global economy. It’s not popular to say, but one reason their pay has gone up so much is that CEOs really have upped their game relative to many other workers in the U.S. economy.
Today’s CEO, at least for major American firms, must have many more skills than simply being able to “run the company.” CEOs must have a good sense of financial markets and maybe even how the company should trade in them. They also need better public relations skills than their predecessors, as the costs of even a minor slipup can be significant.
And so forth and so on, “yada yada,” to quote various characters from Seinfeld. I’m willing to grant that these highly compensated executives get their jobs through honest labor, rather than some form of corruption, and that, on the whole, they are more competent than the next lower tier of executive talent.
What I question is that ratio between CEO pay and the pay of the average worker, 300-to-1. Is that necessary? Wouldn’t a 30-to-1 compensation ratio leave plenty of room for these (mostly) guys to play “mine is bigger than yours”? Where did that ratio come from?
We know roughly when it arose, after the 1960s. In August of 2020 the Economic Policy Institute reported:
In 2019, a CEO at one of the top 350 firms in the U.S. was paid $21.3 million on average (using a “realized” measure of CEO pay that counts stock awards when vested and stock options when cashed in rather than when granted). This 14% increase from 2018 occurred because of rapid growth in vested stock awards and exercised stock options tied to stock market growth. Using a different “granted” measure of CEO pay, average top CEO compensation was $14.5 million in 2019. In 2019, the ratio of CEO-to-typical-worker compensation was 320-to-1 under the realized measure of CEO pay; that is up from 293-to-1 in 2018 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989. CEOs are even making a lot more—about six times as much—as other very high earners (wage earners in the top 0.1%). From 1978 to 2019, CEO pay based on realized compensation grew by 1,167%, far outstripping S&P stock market growth (741%) and top 0.1% earnings growth (which was 337% between 1978 and 2018, the latest data year available). In contrast, compensation of the typical worker grew by just 13.7% from 1978 to 2019.
Cowen has also written about something he calls The Great Stagnation (2011), when America’s productivity started slumping. As I recall he sees stagnation as beginning in the 1970s. So CEO pay starting galloping upward at roughly the same time economic productivity started slowing down. Is there a connection there?
I’m not suggesting that one caused the other, though I must admit the correlation is tempting. However, the CEO compensation system is not a system that is isolated from and thus independent of the overall economy. They are two aspects of the same economic system.
