George Stigler stubbornly insisted that regulations be judged by their actual results, not their intended results.
Dennis Lillee was paid £1,200 to tour England in 1972 for five months. He was paid the same to tour for three months in 1975. Now a world-class fast bowling coach, he would probably not get out for bed for £1,200
When Kerry Packer bid for the Australian cricket rights in the 1970s, he offered $500,000 per year. That was about ten times what the ABC was paying at the time
The Australian cricket TV rights sold for over $500 million in 2013 for a 5-year deal.
Today’s international cricketers are millionaires – widely respected and beloved members of the top 1% of income earners. Most think it is great that top sports people make millions over their career. No plans for the Occupy Wall Street crowd to occupy the MCG, Wimbledon or the Olympics to complain about superstar sports salaries and prizes.
Lillee and other top athletes, celebrities, actors, musicians and entertainers are all paid much more for much the same reason that CEOs, money market managers, top lawyers and tech entrepreneurs are paid much more than in the past.
They are superstars who are able to leverage their talent through communications technology advances on a national and global level. They can apply ‘their talent to greater pools of resources and reach[ing] larger numbers of people thus becoming more productive and higher paid’.
- Why is there envy over the pay of businessmen but not for superstar entertainers and athletes?
- Did people boo World Series Cricket in 1977 because those cricketers could now make a decent living?
- Do people complain when musicians and actors make it big?
Why is Steve Jobs strangely immune from top 1% envy despite his cheapness and meanness to others while Bill Gates is reviled as some sort of monopolist despite his giving most of his wealth away?
Was Jobs worth his pay? Apple shares went up and down in billions on news of Steve Jobs’s health.
When Hewlett Packard’s CEO Mark Hurd resigned unexpectedly, the value of HP shares dropped by about $10 billion! This makes his $30 million in annual compensation a bargain for his shareholders. Oracle’s shares rose 6% on word of Mr. Hurd’s hiring as co-president on an annual base salary of $950,000 and being eligible for up to a $10 million annual bonus. Perhaps he is under-paid?
See Kaplan, Steven N., and Joshua Rauh. 2013. It’s the Market: The Broad-Based Rise in the Return to Top Talent, Journal of Economic Perspectives 2013 for more.