The Bottom Line / Limits to state power
The state of executive salaries is a catastrophe.
The state of executive salaries is a catastrophe. A moral, social and economic catastrophe all thrown together.
The financial crisis on Wall Street briefly revealed the danger inherent in excessive salaries, which have no connection whatsoever to the good of the shareholders.
But we still have to admit sadly that in the debate between the Justice Ministry and MK Shelly Yachimovich, the former is most likely right.
It is impossible to address executive salaries via legislation. There is a limit to what the state can - or should - do, and intervention in wages at private companies is beyond that limit. This would be a crude infringement on the rules of a free market, even potentially evoking the freedom of the economy.
But that does not mean it is the free market that sets these excessive salaries. What really determines the wages of the top one-thousandth of the population is their greed. They think they have everything coming to them, and the public's poor means of supervision and control have failed.