Michael Perelman writes:
Since we have been discussing sports, I have a question about the distribution of income. Inequality is supposedly a reflection of the "human capital" of workers. CEOs are hundreds of times more productive than ordinary workers.
a lot of economists now reject this explanation, e.g., Krugman. It's really the Chicago school which clings to that view, redefining human capital in ways that make it close-to-tautological.
Here is my question: Looking at sports or entertainment figures you find a similar expansion of inequality. I doubt that the ratio of incomes of superstars of yesterday to that of the also rans was as as extreme as today. Has anybody looked at this?
look at Frank & Cook's THE WINNER-TAKE-ALL ECONOMY (which is mostly NC economics). It's all about that, with a lot of examples from sports. (It's a good description of capitalist competition, but I'd skip the last chapter of F&C.) CC writes:
Consider how many boys in Middle School must play football in order to
generate just one high-paid NFL player? Consider all the B Teams. The junior-high coaches. The Little Leagues. On & On. There is a hell of a lot of human labor congealed in every pro athlete today. There was far less in the past.< MP asks:
Carrol, you may be correct, but how will that affect the ratio between
the different levels?< in the winner-take-all market (which comes from Shewwin Rosen's "Economics of Superstars") suggests that there is a fixed number of "winners" in any market (e.g., the NFL players) and a large number of people struggling to get into the winners' circle. The income gap between the winners and the "losers" is gigantic (given a relatively small skill gap between the bottom winner and the top "loser"). The larger that gap, the more people struggle to get into the WC. (I haven't read Rosen, but F&C do a good job.) -- Jim Devine / "Capitalism has destroyed our belief in any effective power but that of self interest backed by force." -- George Bernard Shaw
