Tributum Newsletter #87
Hello
A lot has been said about SA’s unemployment, its lack of competitiveness due to innovation, minimum wage and calls for wealth taxes etc. As a capitalist I tend to look at these items with some scepticism and on the basis that the open market determines price, supply and demand etc.
However, when I see from a study by the Labour Research Service that the top paid CEO in SA earns 6009 times the national minimum wage I have cause to ponder. Can a single individual really be that valuable? Is there a solution to that disparity?
But then US economist Thomas Sewell’s words come to mind that there are really no cost-free solutions to complex socio-economic problems. There are just trade-offs. He suggests that the following three questions should be asked to cut through political rhetoric and emotion:
- What is the realistic alternative?
- What is the cost of that alternative?
- What evidence do you have? I suppose here it’s the evidence for all alternatives.
Take for example “Net Zero” or “going green” in all we do. The climate change debate is as much emotive as it is scientific (visible rise in see levels and temperature) or unscientific (how do we know what the earth’s average surface temperature was 100 000 years ago?). At the heart of it we have oil – present in most everything we use or touch. There is a cost involved, monetary and environmentally and there is evidence of that. So OK, now what is the realistic alternative?
Wind? Solar? Nuclear power? Can these methods produce what we need? How will we replace oil in things like computer components? What is the cost of these alternative methods -monetary and non-monetary (anyone who has watched the limited series Chernobyl will understand the non-monetary cost of nuclear). What evidence do we have that these alternatives are actually better?
Here I want to add another question. Who will implement and do the alternatives? What is the point of Europe going net zero but China and India still burn coal and oil? I am by no means anti green and just use it as a practical example of Sewell’s words. Coming back to the pay gap – the question is what is the alternative? Raise minimum wages and possibly increase unemployment? Cap executive pay and then risk a further brain drain? No solutions – just alternatives with their own costs.
On a lighter note, these questions can also be applied to individual real-life situations like should I go to gym? Should I quit my job? Should I buy that new car? There is no solution – you just need to pick the advantages and disadvantages that you are prepared to live with.
After 7 years Tributum Consulting is rebranding. Same name, same quality and service, just a more modern look and hopefully more modern approach. So, look out for the new logo and Tributum Consulting SA ‘s LinkedIn business page.
Until next month, keep breathing.