Superstars Are Replaceable

Greg MankiwI have long argued against the idea that we must pay successful people excessive amounts of money because they would otherwise just sit on their duffs and produce nothing. There are many things wrong with this way of thinking. The main thing is that the argument can only be made by non-creative people. When Steve Jobs started Apple, he didn’t do it to great rich. He may have had dreams of being rich, but I’m sure at the time he would have been more than happy with a successful small company. That is the dream of every creative person: to do what you love and make a living at it.

But my main argument has always been that there are a whole lot more creative people than is generally understood. For every J. K. Rowling, there are literally thousands of others with comparable abilities. I’m sure that Rowling would admit that herself. She combined talent with the most limited resource there is: luck. And the same thing goes for Steven Spielberg.

I’ve mentioned these three creative people, because these are the three that Gregory Mankiw highlights to justify inequality in his paper, Defending the 1 Percent. According to him, if we didn’t have ridiculous levels of inequality, we wouldn’t have smartphones, fantasy books, and blockbuster movies. As I’ve argued for a very long time, Einstein’s contributions to our knowledge of the universe are arguably the greatest ever. Yet it is madness to think that if Einstein hadn’t ever been born that we would still be scratching our heads about the photoelectric effect.

Earlier this month, Matt Steinglass of The Economist took Mankiw to task for this very reason. He wrote:

Let’s go along with Mr Mankiw’s thought experiment: Steve Jobs, J.K. Rowling and Steven Spielberg are about to create their staggeringly popular products, which will increase inequality because everyone wants to buy them. But now let’s imagine that just before these geniuses are able to bring their creations into the world, they die. No iPod, no Harry Potter, no Jaws. What happens then?

Here’s what happens then. Instead of Apple dominating the market for MP3 players in the early 2000s, Sony and Samsung do; a little later, when smartphones come along, the battle for mobile operating ecosystems revolves around BlackBerry, Samsung/Google and Nokia/Microsoft. Instead of Harry Potter, some other children’s fantasy book becomes the dominant franchise of the 2000s. And instead of Jaws, some other movie becomes the first immense blockbuster of the 1970s, and a different brilliant director’s career is launched. All of the money that was spent over the past few decades to make Mr Jobs, Ms Rowling and Mr Spielberg immensely wealthy would instead have gone to three other hard-working creative geniuses, of which the world has no shortage. There would be just as much inequality as there is now.

Everyone knows the adage, “Build a better mousetrap, and the world will beat a path to your door.” But it isn’t true. People have invented literally thousands of better mousetraps and no one cared. The standard mousetrap is good enough for the job. So we can’t even say that without Steve Jobs we wouldn’t have better MP3 players; without J. K. Rowling we wouldn’t have better fantasy books; without Steven Spielberg we wouldn’t have better summer blockbusters.

The take home of all this is not that we shouldn’t incentivize creative success. It is just that there are limits to it. Steven Spielberg is worth about $3 billion. Does anyone really think that he would be less creative if he only had $1 billion? What’s more, I think that he would have worked harder his whole career if he had had just $3 million. But that’s a discussion for another time.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

0 thoughts on “Superstars Are Replaceable

  1. The exceptional online journal "Too Much" linked to an OK commentary on the Mankiw article:

    http://org2.salsalabs.com/dia/track.jsp?v=2&c=dutG4LxMkU%2BO9KAgWKz%2FQtuweJKpW6Tr

    What I liked best is that the commentary had approximately the same reaction I did; this is nothing you won’t hear from 21-year-old B-school undergrads who just started internalizing right-wing sacred texts and cliches. Although I never encountered a community-college B-school student who proposed that rich people have better genes the way Mankiw did. (I’ve met rich kids who felt that way, of course.)

    The name Mankiw strikes me as odd. What’s the cultural derivation? It made me think of Mankiewicz, as in Joseph (who directed the diabolically entertaining "All About Eve"), his brother Herman (who co-wrote "Citizen Kane") or Frank (Herman’s son, who ran McGovern’s 1972 campaign.) Does Mankiw come from a Jewish background that tried to shod its once-unpopular ethnic heritage? Not that it matters in the slightest — but, fuck it, this guy came off in that paper like a royal suckup of the highest order.

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