Would that be the same market that thought they could accurately predict the risk of securitized mortgage instruments?
The same market that produces for more failing companies that successful ones?
The Market, is not some omnipotent, omniscient force. Much like the forces of natural selection, you actually don't have to be "the best" to survive, just "good enough", and most of the time organizations and organizations survive despite themselves rather than because of themselves.
Or said most succinctly, I think you may have bit too much faith in both the accuracy of market forces and our ability to correctly qualify and quantify such forces.
Securitized mortgages were priced "accurately" to the extent that there was strong, almost inexhaustible, demand for assets with the right rating from paid ratings agencies. This had unpleasant consequences for many of us.
Markets will never magically produce the socially beneficial outcome. They efficiently allocate resources along lines imposed by incentives on market actors, and the resulting supply and demand. If the demand is insane, so are the market-allocated outcomes.
I didn't make the argument that our current structure is "the best" or that the status quo is perfect. Only that sufficient supply/demand for managers exists vis a vis engineering staff to drive management wages up.
In short: it's clear that managers are more highly-valued.
Comments
Would that be the same market that thought they could accurately predict the risk of securitized mortgage instruments?
The same market that produces for more failing companies that successful ones?
The Market, is not some omnipotent, omniscient force. Much like the forces of natural selection, you actually don't have to be "the best" to survive, just "good enough", and most of the time organizations and organizations survive despite themselves rather than because of themselves.
Or said most succinctly, I think you may have bit too much faith in both the accuracy of market forces and our ability to correctly qualify and quantify such forces.
Securitized mortgages were priced "accurately" to the extent that there was strong, almost inexhaustible, demand for assets with the right rating from paid ratings agencies. This had unpleasant consequences for many of us.
Markets will never magically produce the socially beneficial outcome. They efficiently allocate resources along lines imposed by incentives on market actors, and the resulting supply and demand. If the demand is insane, so are the market-allocated outcomes.
I didn't make the argument that our current structure is "the best" or that the status quo is perfect. Only that sufficient supply/demand for managers exists vis a vis engineering staff to drive management wages up.
In short: it's clear that managers are more highly-valued.