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MBM Principal Sources

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07 March 2007



Maybe I'm missing something, but don't you think inflated CEO salaries or corruption are more a question of incentives? Even if you're focused on creating genuine value for customers, you still have a little thing called "self-interest." I would imagine that companies whose employees personally benefit from making the company profitable would be less likely to violate the law.


I'd separate the notion of inflated CEO salaries from corruption, because while the former is a subjective evaluation, usually based on unsystematic, anecdotal evidence, the latter clearly, objectively connotes wrongdoing.

So, isolating our conversation to corruption, certainly self-interest drives bad behavior, but it also drives good behavior, in the right system and culture. My point was that when most people are making money the proper way, they have neither time for, nor interest in, making it the improper way. Profit, in other words, is not inherently linked to bad behavior; quite the contrary.

Your basic point, however, I agree with, which is that a system in which people can benefit from the value they create is the best alignment of incentives.


Have you been turned down by other lenders?


Thanks a lot for this simple yet very very useful solution.

new balance

Power invariably means both responsibility and danger.

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