Productive
and constructive competition - among scientists, innovators, managers,
actors, lawyers, politicians, and the members of just about every other
profession - is driven by jealousy.
The eminent Nobel prize winning British economist and philosopher of
Austrian descent, Friedrich Hayek, suggested in "The Constitution of
Liberty" that innovation and progress in living standards are the
outcomes of class envy. The wealthy are early adopters of expensive and
unproven technologies. The rich finance with their conspicuous
consumption the research and development phase of new products. The
poor, driven by jealousy, imitate them and thus create a mass market
which allows manufacturers to lower prices.
But jealousy is premised on the twin beliefs of equality and a level
playing field. "I am as good, as skilled, and as talented as the object
of my jealousy." - goes the subtext - "Given equal opportunities,
equitable treatment, and a bit of luck, I can accomplish the same or
more."
Jealousy is easily transformed to outrage when its presumptions -
equality, honesty, and fairness - prove wrong. In a paper recently
published by Harvard University's John M. Olin Center for Law and
titled "Executive Compensation in America: Optimal Contracting or
Extraction of Rents?", the authors argue that executive malfeasance is
most effectively regulated by this "outrage constraint":
"Directors (and non-executive directors) would be reluctant to approve,
and executives would be hesitant to seek, compensation arrangements
that might be viewed by observers as outrageous.
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