Robert Frank and Philip J. Cook have written a most interesting book that explains why the salary of a typical American executive today is 120 times that of the average manufacturing worker when it was 35 times that in 1974; why "the incomes of the top 1 percent more than doubled in real terms between 1979 and 1989, a period during which the median income was roughly stable and in which the bottom 20 percent saw their income actually fall by 10 percent." The authors reject the arguments that these horrifying statistics result from productivity increases, or the failure of tho se at the bottom to take advantage of opportunities, lack of education (Robert Reich), or genetic inferiority (Charles Murray). They blame what they call the "Star System," which has become common in many fields (OJ. Simpson's attorneys, corporation raiding of big name executives, etc.); a "reward structure common in entertainment and sports - where thousands compete for a handful of prizes at the top .... "
They argue this distorts society by diverting talented people into competitions almost all will lose. "Winner- Take-All markets attract too many contestants in part because of a common human frailty with respect to gambling - namely, our tendency to overestimate our chances of winning," i.e., the "Lake Wobegon Effect," where all the men are good-looking and all the children are above-average.
