Piketty actually hit the crazytalk salary thing as well. He made the point that it evolved in the United States because our economy wasn't annihilated by WWII and we had no landed gentry sitting around. However, he also makes the point that there's no correlation between crazy f'in salaries and value or performance, and that crazy f'in salaries are more of a social divider than anything else. In other words, crazy f'in salaries exist to signify royalty, pure and simple. They need the extra incentive so that the world knows that we're serfs and they're nobles.
Funny how that works. Ariely doesn't seem to get into that social aspect, but when you look at the bonus experiment and how the large bonus resulted in poor performance from "average", off the street people who are unaccustomed to such a thing, I can see how that can act as a division. Can I just say that I picked this up today and am already through the first chapter and could keep going if I felt like it? This book has really piqued my interest....there's no correlation between crazy f'in salaries and value or performance, and that crazy f'in salaries are more of a social divider than anything else.