Harvard Trust Loses Billions, Executive Compensation

re: Harvard’s trust.

Remember that the trust was forced to publish salaries of its employees in the early 00s. The professors the objected to those (mere technicians) traders making more than they did (they likely would have kept quiet if they weren’t embarrassed by the publicity). There was a major exodus of very able people who were well connected. Then the trust lost billions.

Salaries are "just" another product of the market, and more than fair if there’s any competition. Either you trust the market or you don’t.

Remember that when IBM brought in the first tabulating machine they priced it at half the salaries of the 100 bookkeepers it replaced. Same happened in the executive office when corporations downsized headquarters’ staff in the 70s-80s as automation and networks made 80-90% of those below-the-line paper-pushers redundant. They either found jobs in the money-making part of their organization or they left the companies. The Boards of the time rewarded the remaining executives with some of the cost savings and salaries went up 10 fold or more. We should do the same with Federal agencies. They’ve yet to do the same headcount recovery.

The only valid question (if we believe a market is at its best when left unconstrained to maximize the good, even with some bad) is if there is good competition, locally or internationally that will discipline these prices (salaries). If there is competition, we should trust the salaries are just compensation.

Note that when Japan constrained salaries the business leaders were compensated (at times outrageously) in other ways. Salaries have the great advantage of being transparent.

I suspect what the left is really complaining about is the implicit sharing of power (money) by the government. It takes a great deal of trust for a government to allow its citizens to have this kind of power. In the American system, we believe the government power flows from the people, so, just like taxes, “it’s not their money” (nor is it their power).

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