So long as the good times rolled, argues Michael Prest in an essay for our latest edition, most people didn’t complain that a banker got paid 100 times more than a nurse. At least, there was a grudging consensus that this set-up “worked,” in that bankers were out there creating credit and driving the economy onwards and upwards—and were paying a hefty amount of tax into the national purse in the process. Hindsight now suggests something rather different: that that which seemed ridiculous, was ridiculous. The system didn’t work. The bankers didn’t work. So, what should we do now—and what should, or shouldn’t, people within the banking industry actually be able or allowed to earn in the first place?
Part of the problem, Prest argues, is the incentive-distorting phenomenon of banker bonuses, which are addressed in a separate short essay by a former head of strategy at an investment bank. But there is also a larger philosophical question at stake: can and should we bring an end to the era of “vertiginous pay”—and, if we do, what might replace it? Let us know your own thoughts below.