What We Refuse to Count

The Voluntary Settlement, Part 2

There is one belief that the executive defending his pay package and the activist denouncing it both hold, and hold so firmly that neither notices he is holding it. It is that pay tracks value, and that some people are simply worth many times what others are worth. The two sides argue ferociously about the number. Is the chief executive worth three hundred times the man who cleans his office, or thirty, or three? What they do not argue about is the frame, which is that there is a true multiple out there, a real ratio of human worth, and the only question is whether the market has read it correctly. I want to argue that the frame is the error. The multiple is far smaller and far stranger than either side believes, and the way we get it wrong is not random. We overvalue what is easy to see and refuse to count what is not, and a society that does that to itself ends up quietly destroying the things that hold it together.

Start with the honest part, because there is one. If you want to know what a person’s work is worth, the real test is the counterfactual: how much is lost if this exact person does not do this exact thing, and how far below is the next person who could. By that test a few roles genuinely do tower over the rest. The engineer who writes the code that ten million people use. The researcher whose one insight becomes a medicine. The founder whose bet on a market is the reason five thousand people have jobs at all. These are real, and they share a particular shape. Their work is scalable, it copies or leverages across enormous reach, and the best are dramatically better than the merely good. Where that shape holds, one person really can be worth a hundred of another, and no amount of moralizing makes it untrue. Hold onto that, because it is the strongest case against everything that follows, and it deserves to be stated at full strength.

Now notice how narrow that shape is, and how little of the economy actually has it. Most work neither scales nor leverages. And once you step outside the thin band of genuine convexity, the claim that the high multiples reflect real differences in value comes apart in three separate ways.

The first is that the pay at the top is not measuring value at all. It is measuring power. The chief executive paid three hundred times the floor was not weighed on some scale of contribution and found to be worth that. His pay was set by a compensation committee of people much like him, benchmarked against other executives whose pay was set the same way, in a closed market of a few thousand people who all hold the credible option of walking. That is not a price discovered by competition. It is a rent extracted from a position, and the difference matters enormously. A price reflects what you added. A rent reflects what you could hold up. Much of what looks like the market valuing the man at the top is just the man at the top being well placed to name his own number, which is the same unearned capture this site has written about before in the case of land. The label on the check says earnings. A good deal of it is rent.

The second way the claim comes apart is the one that should bother us most, because it is about the people at the bottom, and it is your janitor. His value is real and it is large, but it is structurally invisible, because of how it is shaped. The executive’s contribution arrives as an event with his name on it: the deal, the launch, the quarter, a number you can point at. The janitor’s contribution arrives as the absence of events. Nothing leaks, nothing stinks, nothing breaks, no one slips, and five hundred people have a slightly better day and never once wonder why. His value is diffuse, spread thin across everyone, and preventive, visible only when it is gone, and our entire apparatus for measuring worth is built to see the legible and to miss the diffuse. We mistake “I can put a number on it” for “this is where the value is.” The two are not the same, and the space between them is exactly where the most important work in any society tends to hide. The people who keep the thing from breaking are paid as though keeping the thing from breaking were worth nothing, because a disaster that does not happen appears on no one’s ledger.

The third is that the whole exercise of assigning a number to one person assumes you can separate his contribution from everyone else’s, and in most real work you cannot. Output is produced jointly. The star trader makes nothing in a building that is filthy, with the systems down and no one settling his trades. The surgeon saves no one without the nurse, the anesthetist, the person who sterilized the instruments, and the people who built them. When production is a team, there is no clean way to measure what any single member added, because none of them added anything alone. Economists have understood this for half a century. What fills the gap where measurement fails is not some hidden truth about individual worth. It is bargaining power. We do not pay people what they are worth, because we mostly cannot know what they are worth. We pay them what they can negotiate, and then tell ourselves the number was a measurement.

Put those three together and the supposed ratio of human worth dissolves into something much closer to a ratio of visibility and power. But there is a final move, and it is the one that turns a point about pay into a point about the world we actually live in. When a firm decides the janitor is low value and races his wage to the bottom, it does not really make the cleaning cheaper. It moves the cost. The building gets a little dirtier, the equipment fails a little more often, the people inside are a little more worn down, the customers notice the grime and think a little less of the place, and the whole standard of the shared environment drops by a degree. The firm pocketed the saving. Everyone else pays the cost, in a world that works slightly worse, and not one line of it shows up on the spreadsheet that proved the cheap contract was smart, because the firm does not pay that bill. We do.

This is not new, and it has an old structure. It is the commons being enclosed. It is exactly the move this site described in the case of land, where a person privatizes a gain that was never only his and offloads the cost onto an inheritance we all share. The race to the bottom on the work we have labeled low value is the slow enshittification of the common world, the reason the building, the service, the street, the whole texture of ordinary life seems to degrade a notch at a time while every individual decision that caused it looked, on paper, like prudent cost control. “Low value” is not a finding. It is an accounting trick, the thing you say about work whose worth is real but diffuse, so that you can capture the saving from cutting it and let the cost fall on people who never agreed to pay it.

None of this means there are no differences in contribution. It means the true differences are far smaller than the income differences, because the income differences are inflated at the top by rent and at the bottom by our refusal to count what we cannot easily see. The honest ratio of created value, in most enterprises, is compressed into a band a fraction as wide as the band of pay. That is worth holding onto, because a later essay in this series is about what to do with it, about ceilings and floors and why a cap on the spread is not the suppression of real value it gets accused of being, but a correction to a measurement that was broken in our favor at one end and against the quiet people at the other. And the genuinely scalable exception, the rare person who really is worth a hundred, has an answer of its own, which is to let him own a share of what he builds rather than draw an unbounded wage, so that he carries the downside as well as the up. But that is for later.

For now the point is only this, and it is larger than payroll. A society does not value what it cannot measure, and it cannot easily measure the diffuse, the preventive, and the shared. So it overpays the legible and underpays the load-bearing, lavishes its rewards on the people whose work makes a number and withholds them from the people whose work keeps the number from falling to zero, and then mistakes the resulting spread for the natural order of human worth. The cost of that mistake is not only unfair pay. It is a world that comes apart at exactly the seams nobody was watching, because the people who held those seams together were told, in the language of the spreadsheet, that what they did was worth almost nothing. How we measure value decides what we build and what we let rot. We have been measuring it badly, and you can see the result everywhere you look, in every shared thing that used to work and now only mostly does.