You go up to someone on one of those street corners down by Wall Street. And you ask him or her in a quiet moment, how do you justify this frenzied way of life that you're engaged in? I suspect they would give you in a reflective moment an answer something like this: "By pursuing gain and engaging in risk, we are providing the lubricant for the financial system and therefore for the economic system as a whole. And we are helping contribute to allocating capital to those projects and innovations in the economy that will make everybody better off."
Pretty good. I do have a nit to pick at another point though.
The chief justice of the U.S. Supreme Court, Justice Roberts, makes about $220,000 a year. There's another judge, Judge Judy, a television judge, you know how much she makes? . . . Twenty-five million [dollars] a year. Now that's the result of markets, market supply and demand. Television program people like to watch. Is there any reason to assume that simply because the market has delivered that outcome, that Judge Judy deserves to make 100 times more than Chief Justice Roberts? I would say not.
Please define terms. What do you mean by "deserves?" Chief Justice Roberts also receives the prestige of being Chief Justice while Judge Judy gets the disdain of being a TV judge. Is this deserved too? Unless there is an identifiable market failure (perhaps more likely for Roberts than Judy), I assume that each are generating value in excess of their compensation. Regardless of what they deserve, we third parties receive the excess value that they generate (whether we deserve it or not).
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