Saturday, December 9, 2017

Dee Gordon's 68 Steals: Speedsters, Sluggers, and a New Approach to Batting Order

Much as he is often praised for stealing bases (and for many other aspects of his game), Dee Gordon is also often disparaged for failing to steal bases. His 60 steals in 2017 led the major leagues—but so did the sixteen times he was caught stealing. Most baseball authorities in recent years have been of the view that, for base stealing to be worthwhile, a runner must be successful at least 70-75% of the time; by those standards (and I don’t say I agree with them), Dee’s 2017 percentage of 78% rates as good rather than great.

But Dee’s base stealing in 2017 didn’t result in just 60 extra bases; it resulted in 68. Eight times during the season the catcher’s throw to second was sufficiently wild that Dee ended up taking an extra base in the error. Those extra bases, of course, are scored as errors, not credited to the runner. I’m not aware of such errors being recorded anywhere as a statistic in connection with individual runners (though I wish such statistics existed). To get the number in Dee’s case, you have to watch a reel of all 60 of his steals on YouTube, and count the number of times it happens; 13% of the time, Dee gets to third base when he steals second. You can also see how often the catcher fumbles with the ball and never gets off a throw. There are a lot of those too; clearly having Dee on the base paths makes catchers nervous.

What’s particularly interesting about those 8 extra bases is how they compare with Billy Hamilton’s numbers. Hamilton stole 59 bases—but only twice did he reach third on an error after stealing second. Why so many more errors when Dee was running? Might there be slight differences in their styles—feints or distractions that Dee has perfected, which have the effect of making catchers more jittery? Perhaps, but it seems to me that the answer is more likely to be found by looking at who was batting behind Gordon and Hamilton.

In 2017 Hamilton batted ahead of various players, many of them towards the bottom of the batting order; the most imposing hitter to bat behind him with any frequency was Zack Cozart (63 runs batted in, 24 home runs). Solid numbers, but they pale beside Giancarlo Stanton’s 132 RBIs and 59 home runs; in a managing stroke of genius, Don Mattingly moved then-slumping slugger Stanton to second in the batting order June 11, and he batted behind Gordon for most of the season. It’s hard not to think that the combination of tremendous speed at first and tremendous power at the plate made catchers particularly nervous, and hard not to conclude that such nervousness would lead to more errors when the catcher has to make a quick throw to second. Having Stanton bat behind him almost certainly worked to Gordon’s advantage, both when he stole and when he took an extra base on those errors.

But that’s only the half of it. It’s not just the catcher who’s likely to be made nervous by the combination of great speedster on base and great slugger at the plate. Nervous pitchers are more likely to miss the plate, and that means hitters are more likely to get ahead in the count, and then get a fat pitch to hit. Moreover, pitchers are likely to throw more fastballs when a speedster such as Gordon is on base; fastballs give the catcher a better chance than would a curve ball to throw the runner out at second. But a slugger such as Stanton loves to hit fastballs; in this way too, having Gordon on base makes it more likely Stanton will get a pitch he can hit out of the park. (I’m indebted to my son Dominic for these points about pitchers and batters.)

What will happen to Stanton’s numbers next season? Stanton hit a homer every 2.69 games this year; previously that number was one homer every 3.69 games. As Neil Payne has pointed out today in his post on Five Thirty Eight (https://fivethirtyeight.com/features/how-much-should-we-fear-giancarlo-stanton-in-pinstripes/), simply on the basis of the regress-to-the-mean principle one would have to expect a 2018 less spectacular than Stanton’s 2017 season (even given that Yankee Stadium is a more hitter-friendly park than Marlins’ Park). But there are other factors involved too. For a change, Stanton enjoyed an injury-free season in 2017. He also changed his stance. But batting behind speedster Gordon may well have played as big a part as anything. Before the change Stanton was batting .262; he had hit 11 homers in 62 games—an average of one every 5.6 games. After the switch he hit 47 homers—an average of one every 2.1 games. Just as Stanton helped Gordon get further on the base paths, Gordon helped Stanton get more hits, and more homers.

As of now, the Yankees don’t have a speedster in their lineup; there is no one they could slot into their batting order ahead of Stanton who would have anywhere near the same effect as Gordon. Unless they acquire such a player (and there are not many of them out there), it’s hard not to think there’s one more reason a decline in Stanton’s performance in 2018 is likely. The Mariners, on the other hand—alone of all major league clubs—now have two speedsters and two sluggers in their everyday lineup. Jean Segura has averaged 29 stolen bases the past five seasons. And Robinson Cano and Nelson Cruz are of course among the game’s top sluggers. Conventional baseball wisdom would suggest batting Cano and Cruz one behind the other at 3 and 4 in the order (as they were in 2017). The Stanton-Gordon story of 2017, however, suggests that the Mariners might do much better by alternating speedster and slugger: Gordon-Cano-Segura-Cruz (or Segura-Cano-Gordon-Cruz).

One thing is sure: there was just a one-in-29 chance that my favorite baseball player would be traded to the team nearest me geographically, and it happened this week. I’m a happy baseball fan, and I’ll be making a trip or three from Nanaimo to Seattle next season!

Monday, October 2, 2017

Experimenting with Humans: Scientific Research and The Moral Imagination

A great many of the foundational ethical principles that humans have set out for themselves have involved an imaginative component.* Involving the imagination can be of obvious assistance if we are trying to figure out (or to remind ourselves) how we should treat other individuals, or other groups of humans. But what if entire species are involved? It’s a lot less easy to involve the imagination in figuring out how we should treat chimpanzees and bonobos, or rhesus monkeys—let alone cows, pigs, and chickens.

It may help to imagine a species that doesn’t exist—or, at least, that is not known to us. Let’s imagine a species that’s smarter than we are—imagine the smartest person you know, and then imagine a species in which that person is far from the sharpest tack in the drawer. But let’s imagine that the habits of moral reasoning among members of that species aren’t that much different from our own habits of moral reasoning. Let’s imagine that they arrive on earth, and decide to stay. We’re allowed to stay too—they don’t wipe us out—but they’re clearly the more intelligent species, and they’re more powerful too; they’re in charge.

Let's further imagine that that the members of this other species are similar to us physically, and in many genetic respects—including in their propensity to die from various diseases. Understandably, when it comes to trying out prospective new treatments or new drugs, they decide to use us as we have used chimpanzees and rhesus monkeys. They try the drugs on various human populations, with various control groups. Of course, the humans in question have to be given the diseases first—and of course, the norm is for all experimental subjects to be killed at the end of each experiment. That’s unfortunate, but any reasonable person would have to understand that it’s justifiable—necessary, even. Any reasonable person would understand too that, within the scientific community in this species, different groups would compete to see who could develop the best means of infecting human subjects with these diseases or debilitating medical conditions—even of genetically engineering human subjects so that they would be bound to develop those diseases and conditions. We can hardly fail to understand the rationales that would be provided as justification for all this; we use the same justifications ourselves:
Some may find it especially objectionable that the primates are genetically engineered to mimic the symptoms of human brain diseases. That adds a new dimension to the debate, but existing standards ought to be able to deal with any welfare issues.

The bald fact is that Japan and China are going to do this research anyway. It is surely better for it to be part of a global scientific program – accompanied by a welfare debate – so we can all benefit from the research as ethically as possible. (“Monkey experiments are a necessary evil for better medicine,” New Scientist, 15 June, 2016)
“As ethically as possible”—given that the subjects will have to be made to suffer, and then killed.

It’s worth looking closely at the language we use to help us justify these killings. “Culling” is a word that occurs frequently; animals aren’t described as having been killed at the end of the experiments we subject them to; they are described as being “culled” or “euthanized.” “Sacrifice” is another word you run into a lot: the subtitle of the article quoted above runs as follows: “Like it or not, primates are an essential part of biomedical research. But we must ensure the sacrifice is worthwhile…”

But for many scientists, there is not even a show of regret at using innocent beings in this way; the Canadian Broadcasting Corporation’s Sunday Edition radio program, for example, carried an interview yesterday with a neuroscientist who lauded the discovery that “you could mimic a disease” such as Parkinson’s “in an animal model.” Imagine again that other species subjecting us to experiments, and scientists belonging to that species marveling at the wondrous discovery that you could mimic in human subjects the diseases that their species suffered from; what tremendous scientific advances such discoveries make possible!

There are plenty of practical reasons why we shouldn’t be basing human biomedical research on experimenting with other species; it turns out that relatively few important scientific advances have been dependent on research conducted on non-human subjects—and that such research has not infrequently brought with it costs for humans as well as for non-humans. (See, for example, https://www.peta.org/issues/animals-used-for-experimentation/animal-testing-bad-science/). But just as important as the practical arguments are the arguments from first principles—as a little exercise of our moral imagination may help us to see.

*Religions ask us to Imagine how we would feel if another were doing the same thing to you. Immanuel Kant advised that, if we can imagine an action justified as a universal law, then we may be confident it is ethical in particular circumstances. John Rawls asks us to imagine ourselves behind a veil of ignorance, unable to know whether the persons affected by a possible action are rich or poor, black or brown or white, male or female; behind such a veil we can discern whether a given action is right or wrong in itself.

Wednesday, July 19, 2017

What Humans Do To Other Animals Before Eating Them--and What a New Government Can Do to Make Things Better

Maureen and I today sent some variant of the message below to every NDP and Green MLA in British Columbia. In the long term we have both believed for some years now that the best solution to these sorts of issues is for we human animals to give up eating non-human animals. But given that such an outcome will almost certainly not come in our lifetimes, it is surely imperative for vegans to join with concerned omnivores in trying to do everything we can to reduce the cruelty that has grown and grown over the past half century with the spread of "intensive" farming methods. If you agree, please join us in encouraging the new government to take meaningful action to improve the lives of animals, to improve human health, and to improve the environment too.
Dear [MLA]

First of all, congratulations to you; it’s great to see a change of government!

We’re writing you about an issue that involves human health, the health of the environment, and the welfare of animals. When a Mercy for Animals video in 2014 (http://www.cbc.ca/news/canada/british-columbia/3-men-in-chilliwack-cattle-abuse-scandal-get-jail-time-1.4121997) exposed what was really going on behind the doors of BC’s largest dairy farm, the government responded (at the recommendation of the SPCA) by incorporating national guidelines (from the Dairy Code of Canada) as to what constitutes “generally accepted practice” into the BC Prevention of Cruelty to Animals Act.

This spring, a Mercy for Animals video (http://www.cbc.ca/news/canada/british-columbia/fraser-valley-chickens-spca-1.4157891) has exposed what is really going on in an important segment of BC’s broiler chicken industry—and again, it’s been suggested that the SPCA will work with the government towards incorporating national guidelines (this time regarding the treatment of broiler chickens) into the BC Prevention of Cruelty to Animals Act.

That’s not nearly enough.

Such a move might remove any possible doubt that pulling the legs off a live chicken is not generally accepted practice. But it would further entrench into our laws the systemic cruelty that currently is generally accepted practice.

Take the issue of overcrowding on chicken farms. The Code of Practice for the National Farm Animal Care Council has lovely words in it. Here is how the “Stocking Density” section opens: “Birds must have enough space to move freely…” It sounds pretty good. But what does it actually mean? You need to look at the numbers, not the words. The requirements are that “stocking densities for broiler chickens must not normally exceed 31 kg/m2 at any time.” That phrasing (“must not…at any time”) makes it sounds like quite a stiff restriction—until you do the math. The average broiler chicken is slaughtered at 2.4kg. live weight; translate that into inches and you realize that, in the view of the “Care Council,” each bird need have no more “space to move freely” than an 8.5 x 11 inch sheet of paper. Not quite that much actually—you need to shave an inch or so off the side. It works out to almost 17 birds per square metre. Imagine a five-pound bird living in less space than an 8.5x11 sheet of paper for her entire life.

Numbers matter too with the National Farm Animal Care Council. Much as they welcome among their members “any national or provincial association that accepts the use of animals in agriculture (e.g. Canadian Federation of Humane Societies),” a voting majority always rests with the vested interests of industrial farming, as represented by the “National Farmed Animal Associations.” Such a group cannot be expected to strike any sort of humane balance that gives adequate weight to the welfare of non-human animals—or to the importance of environmental concerns, or to the importance of human health.

The “Raising and Handling Broiler Chickens” guidelines of the BCSPCA (on which the BC Liberal government has largely relied for setting standards in such matters) are already virtually identical to those of the National Farm Animal Care Council: the BCSPCA’s recommended maximum density is 30 kg/m2; the BCSPCA also specifies “no more than 17 birds per square metre.” A density level of 30/m2 is not the world’s worst (the unspeakable cruelty allowed by some jurisdictions entails densities of 40 or more kg/m2), but it’s considerably worse than the “Freedom Food” recommendations of the RSPCA in Britain (no more than 12 birds per square metre), and it’s almost unimaginably worse than the sort of environment in which truly happy chickens can be raised; the Happy Chicken Coop website recommends a density of less than one bird per square metre—about 15 square feet (1.4 square metres) for each bird.

With a new government, British Columbia has an opportunity to become a world leader in limiting cruelty in animal farming, in limiting the damage that poorly regulated industrial farming does to the environment—and in limiting the damage that industrial farming does to human health.

More than that, we have an opportunity to provide an unanswerable response to Donald Trump’s demands over agricultural trade. If here in British Columbia we create a renewed agricultural sector based on taking animal welfare seriously and on mandating strict environmental and health standards for all agricultural products, we will prevent a flood of low-cost, low quality animal food products from swamping our markets—at the same time as we are improving our own lives and those of the animals on which we depend. If BC regulations mandate standards that other jurisdictions can’t meet, we will have an unprecedented opportunity to become exporters of products that are high value in every conceivable respect. Much as some businesses are sure to resist such a path, in the end, the long-term profitability of BC’s agricultural sector will be protected just as much as will be our animals, our environment, and our own health.*

We ask the new government to think of the birds in BC, the cows in BC, the other farm animals in British Columbia—but also of our environment, and of our own health. We ask the government to design a new system, from the ground up. British Columbians deserve nothing less.

Don LePan, CEO and Company Founder, Broadview Press Inc.

Prof. Maureen Okun, Chair, Liberal Studies Dept., Vancouver Island University

* There is one negative to seriously addressing animal welfare, human health, and the environment in this way, and it should be faced squarely: such an approach would inevitably mean some increases in the cost of food from animals. Such costs have, in real terms, decreased by more than half over the past half century as industrial farming methods have ratcheted down costs and ratcheted up cruelty; it’s not unreasonable to ask those with good incomes to pay a bit more now for a system that will improve the environment, their own health, and the lives of animals. But in the case of those with low incomes, it would surely be appropriate to provide some financial consideration to compensate for increased prices.

Monday, July 17, 2017

The Strategy Behind Tonight's Walk-Off Win by Dee Gordon and the Marlins

Baseball is a game of strategy, but if you always stick with the same strategy you become predictable—and your team loses. A textbook example of the importance of flexibility in forming strategy occurred today in extra innings in Miami. With the game tied in the bottom of the ninth the Marlins had had the bases loaded, and couldn’t score. In the top of the tenth the Phillies had had the bases loaded, and couldn’t score. Now, in the bottom of the tenth, and with two out, the Marlins again had the bases loaded. My baseball hero, Dee Gordon, was coming to the plate. Dee is a poster boy of small ball; his game is beating out the throw to first, and then stealing a base, and then when the throw from the catcher or the pitcher goes astray, taking another base on the error.* But infield hits are harder to come by when the bases are loaded with two out and the defense is playing five infielders.

That’s where you need strategy—and, if I may be immodest for a moment, that’s where I come into the picture. For weeks I’ve been fine-tuning strategy with my two Miami Marlins hats; I wore the beige hat with the bright red and yellow and blue logo when I saw the Marlins play two games in Milwaukee a couple of weeks ago; they lost, so for a few days I switched to the dark grey/light grey hat. When that strategy backfired I went back to the beige hat—and the Marlins responded with a string of wins going into the All-Star break. I had to switch again when the Dodgers beat the Marlins last Friday—but the switch proved ineffective. I switched to the beige again on Sunday; that wasn’t working either.

Back to tonight. I had put the grey hat on as the game went to the bottom of the ninth. But that hadn’t done the trick in the ninth; how best to deal with this crucially important opportunity now, in the bottom of the tenth? Dee was down a strike after the first pitch—and that’s when it came to me. I grabbed the beige Marlins hat and put it on—right on top of my double grey Marlins hat. And presto—on the very next pitch Dee lined a run-scoring single to right. Walk off win for the Fish!

Now I don’t want to take all the credit for this; many events have more than one cause, and I have to believe this was one of them. The quality of the pitch, the placement of the Phillies outfielders, the strategy of Don Mattingly and of the Marlins’ coaching staff—all these probably played a part. Dee’s own skill may have had something to do with it. But it would be absurd to claim that the hat strategy wasn’t also in this case a contributing cause. I’m waiting now for Don and for Dee to be in touch—to say thanks, of course, but also to advise me on how often I should resort to the two-hat strategy in the future. Should it be reserved for these sorts of game-on-the line crisis moments? Or should there be a place for it in everyday strategy?

* * *

As a nine-year old I’m sure something close to one half of my mind was persuaded that I really could influence the outcome of far-away hockey games by putting on a Montreal Canadiens jersey. The equivalent percentage now is down to—what? Perhaps an eighth or a tenth of my mind? But like so many humans, I’m loath to give up that 1/8th or 1/10th. It would be like letting go completely of the child within. And who wants to do that—even at the ripe old ago of 63? Go Fish Go! I’ll do what I can to help.

*Fans love stolen bases (and bunt singles, and going first to third on a another player’s single, and scoring from first on another player’s double, and all the other manifestations of speed on the base-paths), but for many years now baseball’s conventional wisdom has underrated the value of speed—in large part, I would suggest, because it’s difficult for statistics to capture its disruptive impact; when a Dee Gordon or a Billy Hamilton is on base, pitchers are distracted, fielders tense up—and the defense makes mistakes (many of which are not egregious enough to show up in the box score as errors, but can still cost a base or a run).

Sunday, June 11, 2017

Why Plato and Ed Schreyer Were Right: Those at the Top Should Be Paid No More than Three or Four Times What We Pay Those at the Bottom

Through the 1950s and early 1960s—considered by many to be a golden age of corporate well being and of growth for the economy generally—CEOs of large businesses typically made about 20 times what the average worker in those organizations made. But the seeds for the explosion in executive pay that followed had already been sown. In 1951 Arch Patton, an executive at the management consultant firm McKinsey & Company, had developed a survey of executive compensation that compared executive pay not with the pay of others lower down in an organization, but with executives at other organizations. Understandably, the survey came to be closely followed by executives, and the results were published annually in The Harvard Business Review. Patton expanded on the ideas underlying the survey in an influential 1961 book, Men, Money and Motivation, arguing that corporations would be well served by knowing how the pay of their top people compared with the pay of other corporations; “when compensation of executives is above the industry average, above-average demands can be made on the executive group.” Boards of Directors listened, and compensation levels for those at the top increased significantly through the 1970s and 1980s. Much of that compensation, though, was opaque; it was difficult to assign a monetary value to deferred payment schemes and complicated stock option plans. The 1992 decision by the US Securities and Exchange Commission to require full and transparent disclosure by corporations of the compensation paid to their top five officers changed all that. Often described as an attempt to “help investors keep compensation in line” (as The Globe and Mail put it in a 5 December 2015 article), the move was in fact designed merely to increase transparency, with no judgement made as to the desirability of reining in executive wages. The previous system of providing information as to what companies were actually paying their top people was described by SEC Chair Richard Breedon described as “impenetrable”; he complained that it “insulated management from accountability to shareholders.”

Whatever its intent, the introduction of the new system became a landmark in the history of inequality. Suddenly boards and shareholders could see clearly the value of total compensation packages, and compare them to the packages other companies were offering. Far from choosing to rein in compensation, boards became ever more determined to ensure that compensation for their organization’s top people was “above the industry average.” With everyone continually striving to be above the average, the result was not hard to foresee. Average executive levels soared ever further beyond those of the average worker, and further still beyond those of workers at the bottom of the wage scale. We are now faced with unprecedented levels of inequality—inequality that is not only unfair in itself, but also undermines the cohesiveness of society, and undermines the economy itself, as more and more capital is devoted to savings socked away by the rich, and less and less to expenditures that drive further economic activity. (That such expenditures have continued at relatively high rates is largely attributable to many people carrying debt loads that are, in the long run, unsustainable.)

In such circumstances it seems obvious that we should return to measuring compensation for people at the top by comparing them to people in the middle or at the bottom of their own organizations—and that we should aim to set maximum multiples. But just where should those maximums be set?

In the fourth century BCE Plato suggested than in human societies governments should “permit a man to acquire double or triple, or as much as four times the amount [that is deemed to be at poverty levels]” (Plato, Laws V, sect 744). In the early twentieth century the financier J.P. Morgan—the epitome of American business establishment values of the day—is said to have recommended that those at the top should be paid no more than twenty times what the average worker made. In 1940 George Orwell called for “limitation of incomes, on a scale that the highest tax-free income in Britain does not exceed the lowest by more than ten to one” (“The Lion and the Unicorn,” Part 3, Section 2). In the 1970s management guru Peter Drucker argued in The Wall Street Journal for “a published corporate policy that fixes the maximum compensation of all corporate executives…as a multiple…of the lowest paid regular full-time employee,” and suggested maximum multiples ranging from 15 to 1 for smaller businesses to 25 to 1 for large multinationals. Also in the 1970s, Manitoba premier Ed Schreyer (later to become Canada’s Governor General) aimed “to bring about greater equality…and reward the dignity of work,” proposing that the ratio of incomes for those at the top of the income scale to the incomes of rank-and-file workers be no more than 2.5 to 1. (Errol Black and Jim Silver, “Manitoba's NDP: time to return to its social democratic roots, Canadian Centre for Policy Alternatives, 15 August 2012).

A proposed multiple of 2.5 between the highest and the average might translate into a multiple of 3.5 or 4 to 1 between the highest and lowest paid—or, after tax, a multiple perhaps closer to 3:1. That range has always felt intuitively appropriate to me, but I’ve never seen any attempt to present an extended argument for the appropriateness of that or of any other multiple. That’s what I want to do here.

I should preface the argument by making clear that such multiples should, to my mind, apply to all organizations—not just to corporations. Given the extraordinary multiples at many large corporations, it’s understandable that they have been the focus of most discussions. University professors or hospital administrators may think of their organizations as being relatively free of inequality. Yet the levels of inequality in those organizations are now typically greater than were corporate levels of inequality in the 1950s and 1960s. A hospital cleaner in America makes $11.19 an hour or $22,380 a year, while an orthopedic surgeon working in the same hospital may make well over $400,000. A cleaner at an American university working 40 hours a week makes, on average, $10.76 an hour or $21,520 a year, and at some universities an adjunct instructor working full time (teaching 8 one-semester courses per year) will make barely more than that—$22,000-$28,000 at institutions where adjunct professors are paid $3,500 or less per course taught. Meanwhile, the average for American university presidents has reached $500,000 a year.

So why a multiple of 3? Why that number specifically?

Let’s start by thinking of a normal work day of 8 hours, and two salaried workers. Perhaps one of the two may worker harder than their colleague—perhaps even twice as hard. So to provide fair compensation, arguably, she should receive an additional eight hours worth of pay. Suppose on top of that she doesn’t just work harder; she also works longer. Let’s say she always works twelve hour days, compared to the eight hour days worked by her colleague. In my experience (now more than 40 years in the workplace), there are in fact very, very few people who actually put in twelve hour days as a regular practice—and most of the ones who actually do so are not working flat-out for the full twelve hours. But for the sake of argument let’s say this person is one of those very, very few; let’s allocate to her on that basis a further 4 hours worth of pay.

We’re now up to 2 ½ times the level of the fellow worker. But perhaps that’s still not enough. Maybe the person in question manages somehow to work more than twice as hard as her colleague, or somehow does manage to put in more than 12 hours of flat-out work per day. As compensation for this extraordinary individual, let’s arbitrarily allocate to her a further amount equivalent to 50% of her fellow worker’s pay, bringing her up to three times what the fellow worker makes.

But surely that’s still not enough, you may say. It’s not just that this person—let’s say she is the CEO or the President of the organization—it’s not just that she works much harder than others and much longer hours; it’s also that she bears much more responsibility. Another argument for paying more to heads of organizations is based on weight of responsibility: the larger the responsibility, according to this argument, the higher the rewards should be. Most of us feel intuitively that there is something to this argument, and to some extent I think so too; if I didn’t think so, I would not have felt it reasonable for the company that I have headed to pay me almost three times as much as our lowest paid employee when I am sure that I have not worked more than twice as hard, or more than a twelve hour day (an average of more like 9.5 is more like it). But there’s far less to the argument that greater responsibility deserves greater pay than is commonly assumed. The CEO or President of any organization bears substantial responsibility, of course—but that responsibility is arguably less than the responsibility borne by many ordinary workers in everyday occupations. Someone who heads up a company that manufactures Kleenex, or that processes accounting information shoulders important responsibilities—but are they an greater than those shouldered by a day care worker or a camp counsellor—let alone those shouldered by a pediatric nurse? People working in those sorts of capacities constantly shoulder life and death responsibilities involving small children. If weight of responsibility is to be the basis on which pay differentials are determined, surely a pediatric nurse should make far, far more than the CEOs of a great many companies. And let’s not just look to jobs with obviously important responsibilities. Consider for a moment the job of hospital cleaner. If these workers don’t do their jobs very thoroughly and very well, the consequences to human health are almost incalculable; the spread of c difficile and other deadly “superbugs” becomes far, far more likely. Yet these are among our lowest paid workers. (Over the past generation they’ve become even lower paid than they were, as hospitals have outsourced jobs such as cleaner to companies that will pay the workers less than the hospital would be obliged to; instead of being valued members of the hospital team, such workers are now as marginalized as they are poorly compensated.)

What about the unpleasantness of the job, and the stress? I think there’s a lot to be said for the idea of paying more to people whose jobs are very unpleasant to compensate for that. But again, if we truly believed in that principle, the extra rewards would go to those who clean the toilets in airports and hospitals, and who scrounge the garbage dumps of the developing world for a living—not to the CEOs of large corporations. And stress? Yes, it’s stressful to lead an organization—but numerous studies have shown that the sort of stress that damages health and shortens lives is far more common among those who struggle to make ends meet than it is for those who head large organizations.

But wait, many of you may say. Those who are paid large amounts often have far more education than the average worker. Surely they should be paid more in recognition of the level of education they have attained.

But should they? Let’s think the matter through from first principles. Higher levels of education typically enable the beneficiaries to have much more interesting jobs than do those with little education. Should they benefit from their education both by being able to obtain more interesting work and by being paid much more for doing it?

Doctors often argue that they deserve very high levels of pay because they suffered through (and paid for) so many years of school. But by far the greater part of the expense of their education is borne by the taxpayers—most of whom make no more than a fraction of what doctors make for the rest of their lives once they do finish their education. Does a doctor really deserve to make more than three times what the average taxpayer makes?

What, then, of one’s ability to do a job effectively? It’s fair to point out that those who are paid huge amounts often have huge talents—and as a result do indeed work more effectively than many others. But why, precisely, should humans be compensated for ability? No doubt some people are able to achieve considerably more than others, but let’s set to one side that part of their achievements that has resulted from their education and that part of their achievement that has resulted from working harder than others. What we’re left with are the abilities one is born with, and the opportunities one’s family was able to provide during one’s upbringing. To be sure, genetic difference and differences in family background create large differences in the levels of ability of different individuals. But such differences are surely a matter of good or bad luck, not of dessert. Does someone who has had the good luck to be born with an extraordinarily high level of intelligence (or with extraordinarily good hand-eye coordination, or with extraordinary talent of any other sort), or someone who has had the good luck to be born into a wealthy family that is able to provide for them a privileged upbringing, deserve to be paid more because of the higher level of ability that is the result of those genes and that upbringing? To pay such people more on those grounds amounts, in essence, to paying them more for having been lucky. What possible justification could there be for building luck money into our system of compensating workers? Arguably, it would be at least as fair in the other direction to compensate people for having been disadvantaged in the talent they were born with, or the upbringing they had—or the opportunities they never had.

What of what some will call the “practical argument”—that, regardless of the rights or wrongs of it, one will not be able to attract and keep top talent unless one pays top dollar?

Those who make this argument overrate three things. They overrate, first of all, the importance of financial incentives to human beings. There will always be many talented individuals willing to try for interesting and demanding jobs, even if at they are not paid astronomical sums for doing so; if that were not true, countries would have no one willing to serve in Cabinet positions, or in the senior levels of the bureaucracy (where most people make only a fraction of what they could make with large corporations). For most people—including most talented people—money is not everything. It’s not even the most important thing.

Those who make the so-called “practical argument” overrate too the degree to which talent is scarce; in any large organization there are almost always many individuals capable of filling the top jobs. Finally, they overrate the degree to which organizations owe their success or failure to one individual (or to a handful of individuals) at the top. During the start-up phase, to be sure, many organizations are disproportionately reliant on the abilities and the vision of the founder(s). But the evidence suggests that, in the case of large, established organizations, who the CEO is usually makes relatively little difference to how the organization performs.

Does a company, then, really need to pay its CEO tens of millions of dollars a year? The facts of the matter simply don’t bear that out. Many North American companies have done exceedingly well without ever paying their CEO at anything like the multiples that most large institutions offer their top people. And in the other direction there are many, many companies that have seen their fortunes decline drastically despite paying the CEO tens or even hundreds of millions of dollars. And again, North American corporations thrived in the 1950s and 1960s despite far, far lower multiples of CEO to average worker compensation.

One should also look to outside North America. American corporations may have gotten into the habit of paying their CEO a fortune every year, but that’s been much less the case in other countries. In Japan the head of a large organization can expect to make ten or twenty times more than what those lower down the ladder make—not four hundred times more, as in the United States. But no one I’m aware of has suggested that Honda or Toyota would be far more successful if those organizations paid their top people in the way that American companies pay their CEOs.

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Many of the above numbers are multiples of the average worker—not of the lowest paid. What is the rationale for referencing the lowest paid rather than the average? About that there can be no mystery. Western societies have become far too much in the habit of focusing on the incomes of the middle class—and far too little on the incomes (and the wealth, or lack thereof) of those at the bottom of the ladder. If we focus only on a comparison of the highest paid with those in the middle, it becomes ever easier for society as a whole to keep forgetting about its least fortunate members—and for inequality between the middle and the bottom to keep growing, even as inequality between the middle and the top begins to shrink.

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I have been trying to put forward a case for 3:1 being an appropriate multiple. Is it possible to prove that this is precisely the appropriate number? Of course not. By their very nature these issues will always involve a large subjective element. But I cannot believe that something in the range of three or four is not a more appropriate multiple than J.P. Morgan’s 20—let alone than the 350-400 that has become the average in large American corporations.

Apparently I’m not alone in my intuitions. Psychology professor Kevin Payne’s new book The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die (the subject of a 4 June 2017 Nicholas Kristof column in The New York Times) reports on surveys as to what members of the general public feel to be appropriate pay multiples. Interestingly, there is no great divide between left and right: “liberals said CEOs should be paid four times a much as the average worker, while conservatives said five times.”

A multiple of three (or four, or five) is still a very long way from Marx’s “from each according to his abilities, to each according to his needs.” A multiple of three or four does not eliminate inequality; it still accepts the value of monetary incentives for people to work hard, to strive to succeed. But a multiple of three or four would mean the end of “luck money” as a guiding principle of compensation. It would be the basis for a far fairer, far more livable society. Let’s go there.

CEO Compensation

(The following is the full version of a letter to The Globe and Mail that was published in slightly edited form on June 1. I have been developing a longer argument on this topic; I will post that shortly.)
I may be unusual among CEOs in entirely agreeing with Mark Roberts (letters, May 30) that CEO compensation should be limited to a certain multiple of the compensation of a corporation’s lowest-paid employee. I remember that many years ago a Manitoba premier suggested this idea—and suggested that three would be an appropriate multiple. That sounds about right to me—and it’s a multiple that I don’t think our corporation has ever exceeded in its 32 years. It’s just about impossible to work more than three times as hard as someone else; there are only 24 hours in a day. Should one be paid more for having more ability or education? Perhaps, but arguably it’s at least as fair in the other direction to compensate someone for having been disadvantaged in the talent they were born with, or the upbringing they had, or the educational opportunities they never had.

Saturday, May 6, 2017

A Party That Calls Itself Green

Where does the Green Party stand on the network of issues related to factory farming? An enormous body of evidence has shown that the consumption of animal products by humans is a huge contributor to global warming; that growth hormones, antibiotics and other drugs used in factory farming pose dangers to both human health and the non-human environment; that the ways in which factory farms use pesticides and herbicides (not to mention the issues surrounding excess manure) pose dangers to the water supply; and that many practices that have become routine on industrial scale farms are unspeakably cruel to farm animals. One would naturally expect the Green Party to take a strong stand on all these issues. And in Canada that's just what happens--at the federal level. The Green Party of Canada has adopted a long and highly specific list of good policies in these areas. (It’s largely for that reason that I’m seriously considering switching my allegiance to the Greens in federal politics.)

The Green Party of BC? Not so much.

Incredibly, the BC Green Party’s platform includes no mention whatsoever of these issues. Their agricultural policy does not even mention animal welfare. Their climate change policy does not even mention the damage done by agriculture devoted to the production of animal food.*

To my mind, such a party is simply masquerading as Green.

Is the BC NDP any better? On these issues, sadly, not one bit better. But given that, on other issues, the NDP is clearly more progressive (the New Democrats are committed to a $15 minimum wage, for example, whereas Andrew Weaver’s Greens are committed only to appointing a commission to study the issue), the best choice in BC on Tuesday seems to me to be clear.
*Both agriculture and the environment are areas of shared responsibility between federal and provincial governments.