a he new men aloe ±icz tend to have wealth - simply because their
largo in come enable then to save a lot. However, to r wealth is
not e s urce of their income and ist will in genral bo
snail as comparedwith the wealth they would have to have in
or or to get fron it alsone the income they actually avo.
In order to take account of the e relations we should have
o wcrS out a process in wealth and incone, with allthe
feed-backs between the two.
One night- purely formally- calculate a fictici us capital
resulting fron the application of the return rate real wealth
to the incone f ho mana or. Then formally all income would
bo shown as return fwealth. lie proporti n of real w alth in
ho total would be the lower the newer the men would he.
II.Simon gives an exolanaii n f the earnings of managers
w ich i s based on the hi erarchy measured by scale f
o er tions, and on the relati n between tho grade and the
payment? there are again two exponential on tho face .f it
geonetr cal)listribu;i ns involved. Tho theory night bo
g noral.se to aoply to stars, specialists. :ro is one
fa it in tIt is not a no el of a Pr cess, rosooabligi this
the the ri.os of Roy etc. To he satisfactory, the hiora chy
f oyncats would have to be shown to evolve fron a historical
recess which c m i ues.
See .bimon, Hie c>®.' ensati n ox Executives. Socio ©try 1)57*
based on v ircal i veotigations by fioboz*to,-
A general theory ol executive con sensation based m
statistically tented propositions. Qu.J.E.1956
Bases of a historic a explana in would that tho
scale f cr-o.r ti ns i creases in time, or rather that there s
a diffusi n of the schale of operations in the course f ti e.
hi f:.oi n vo* tho space f income :.yno ts.
Reason for the iiff uoion is si:.ply the pro imp cor lexity of
the noon ’ ic system.
1q£ ro tho • orn ovrl aments we have already he* iclal ly tho
sane pattern i ' t o classic ! di isi n o ' l.aour which
i creased the mars et f the producer (craftsmen) ar .l ere- ed
i: one rifferentials.
The payments h : erarchy is full f irra i nal factors
and bo explained by soci logical factors, as <in rightly argues.
(Tni of the engineers in Austria !
