"He earned it..."

[_krose]

Why does Madonna make so much money, Gad?

Some possibilities:
1) Madonna deserves money 5000 times more than Droopy (The Market has spoken)
2) Madonna worked 5000 times harder in life than Droopy. (Thus spake the Market)
3) God (as expressed in The Free Market) loves Madonna 5000 times more than he does Droopy.

The question would actually be better if it were Kim Kardashian (she makes around $20 million per year, and launched her "reality TV" career via a leaked sex video with a rapper).

[_Gadianton]

The reality is that no clerk gets paid several hundred an hour for being a clerk, so your extrapolation is absurd.

exactly.

But why? Why does no clerk get paid several hundred an hour for being a clerk?

So, the real question is, why does the CEO of the grocery store likely make so much more than a clerk?

That's not the question I'm asking here. I'm assuming there's a satisfactory answer for this, see my "bull moose" example. In nature, the alpha male may prosper significantly more than the beta male, even though their physiological differences may be subtle. That slight edge may be leveraged in the evolutionary scheme in order to keep nature highly competitive.

If the beta males are the clerks, you're telling me that it's stupid to suggest one is making 12$ an hour yet another is making several hundred an hour. But if the alpha males are the CEOs, or better, if they are the rich and the super rich, why does it make sense that some CEOs make several hundred an hour, and others make tens of thousands an hour, or even over a hundred thousand an hour? Does the alpha male of any herd mate with 1000 times as many females as the alpha male of any other herd?

[_Gadianton]

Gad's fundamental premise is the problem here. It isn't the distribution of core human attributes among the population that becomes entrepreneurs...

I've had a handful of conversations with MBAs on this subject and they tell me the same thing you do. This is the doctrine of the MBA. They tell me books have been written proving that any of the big entrepreneurs in the world would have been just as big of entrepreneurs no matter where or when they were born; though they might make an exception for some of the worst circumstances. It's an important doctrine to believe, because it means if they read the same book a million other MBAs are reading about the life of billionares, they can apply the lessons and reproduce the results. It's like you say -- and I agree -- the attributes for success are a mixed bag and hard to quantify.

But we've seen some very unique combination of attributes and sheer spirit and drive lumped together is supicious ways. Paul Allen and Bill Gates were classmates. Several of their classmates went on to become incredibly rich, working for their companies. Had these two been born 20 years later, would they have been multi-billionares? These MBAs know the answer is "yes". But where they change tactics is in explaining their peers who are also in an upper sub-pecentantile of the 1%. Would all of these multi-millionares have also been multi-millionares if the were born, say, 20 miles away in an equally or more affluent neighborhood?

[_Analytics]

I've had a handful of conversations with MBAs on this subject and they tell me the same thing you do. This is the doctrine of the MBA. They tell me books have been written proving that any of the big entrepreneurs in the world would have been just as big of entrepreneurs no matter where or when they were born...

This reminds me of the corollary in the sports world—if you have a certain measure of innate ability and apply yourself just as your favorite sports hero did, then you will have similar success and will win a commensurate number of sporting competitions, set a commensurate number of records, and “earn” a commensurate amount of money.

A logical proof that this thinking is a fallacy can be summed up in three words: winner takes all. Regardless of how hard individuals work, the system is rigged so that there are a limited number of winners.

[_subgenius]

The reality is that no clerk gets paid several hundred an hour for being a clerk, so your extrapolation is absurd.

exactly.

But why? Why does no clerk get paid several hundred an hour for being a clerk?

you would need to ask the clerk's employer and the clerk for that answer. But the easy answer is because that is what the employer is willing to pay for what the clerk does and that is what the clerk is willing to accept for what the clerk does.

So, the real question is, why does the CEO of the grocery store likely make so much more than a clerk?

That's not the question I'm asking here. I'm assuming there's a satisfactory answer for this, see my "bull moose" example. In nature, the alpha male may prosper significantly more than the beta male, even though their physiological differences may be subtle. That slight edge may be leveraged in the evolutionary scheme in order to keep nature highly competitive.

what is this imaginary "leverage" of the bull moose ?
The "slight edge" is not slight at all...just because you think all bull moose look alike does not mean that the alpha only has a slight edge....nor does it mean he has a tremendous edge.

If the beta males are the clerks, you're telling me that it's stupid to suggest one is making 12$ an hour yet another is making several hundred an hour. But if the alpha males are the CEOs, or better, if they are the rich and the super rich, why does it make sense that some CEOs make several hundred an hour, and others make tens of thousands an hour, or even over a hundred thousand an hour? Does the alpha male of any herd mate with 1000 times as many females as the alpha male of any other herd?

depends on the size of the herd, does it not? as well as the fact that a female moose (cow) may or may not reject a suitor.
http://www.mooseworld.com/mooseman/index.htm

"The bull digs a hole (wallow/pit) about 5 times a day with his forelegs and antlers and urinates into it - a pretty strong smell. Then he strikes with the forelegs into the wallow and turns the head closer to "parfume" himself and his bell. Finally he lays down completely in the wallow. If the cow is close, she also puts herself inside and even protects it against other cows. It's not silent that time either - the cow utters nasal mating calls like a long, wailing moan, the bulls tends more to a caughing like barking.

Younger bulls do not smell that strong and are therefore not that attractive to cows, so they and often use wallows of larger bulls to cheat."

[_Gadianton]

sub,

Now you're trying to do what Droopy tells us we can't do, quantify market agents, in this case, you're trying to tell me that a Bull Moose might not be bigger, but have a nicer smell, or pleasing personality. I've never said anything about Moose fundamentals, only about the distribution of attributes and rewards. I'm advocating the New Classical, libertarian idea of perfect competition. If returns are highly skewed, then the perfection of competition is called into question, and, in Droopy's terms, the size of the economic pie will be smallar than it should be. The fact that Droopy is allowed to geometrically "quantify" society's output by a "pie-shape" (maximal area efficiency) and I choose a a bell curve, is a matter of instructive preference. It's rather, Droopy's world that tries to quantify people. The same insights from behavioral finanance and economics at work in books geared toward the aspiring MBA billionare are behind the latest arguments for leftism: people are irrational, here's a book on how to manipulate them. For the business student, the ideas are geared toward taking advantage of the irrationality of others for one's own personal gain. For the leftist, the same ideas are used to drive policy to prevent the weaker from being taken advantage of by the strong. In either world, the underlying thesis is market failure, that free markets do not produce the optimal result for society as a whole.

Austrians are oblivious to this, for some reason. Frank Shostack, a hedge fund manager, has written several articles for the Austrian Review promoting the idea that fantastic rewards await the savvy fundamental analyst. He's on Droopy's side, that the super rich are in some way the best of the breed who have earned every penny of their billions, in the sense that their winnings are attributed to skill. He's used arguments that derive from behavioral economics, particularily from Joseph Stiglitz of Columbia University, who won a Nibel Prize for essentially arguing that markets are one big failure.

http://www.economist.com/node/813705

Well, you can see from reading the article that ideas like this can serve either the ends of the business business opportunist or the government interventionist; again, either way, free market ideology in the form of "maximizing the size of the economic pie for society as a whole" is explicitly out the window. Take your pick. The liberals are at least consistent here.