The Cost Of Talent: How Executives And Professionals Are Paid And How It Affects America

Derek C. Bok
New York: Free Press, 1993
342 pp., $22.95 hc

Leonard Antal
Independent Scholar

Derek Bok, past President of Harvard University, has dedicated his first year of retirement to pondering the discrepancies between paychecks. Are some professionals paid too much? Too little? Do the differences in how professions reward their members allocate talent effectively?

Bok focuses on six professions--corporate executives, doctors, lawyers, federal officials, secondary teachers, and college professors. Thanks to a number of factors, the level of compensation in the first three professions has soared to almost unconscionable heights while the level of compensation in the last three professions has lagged far behind. Bok suggests that one reason for this disparity is that talented people who might have gone into any of the last three "helping" professions were instead lured into one of the first three professions. No wonder federal officials, secondary teachers, and college professors get paid less than others--the really smart people have abandoned these professions and are earning more money elsewhere.

Bok believes that this siphoning off of the best talent from education and government is socially perilous. America must husband its valuable intellectual resources to maintain its technological advantage, now challenged as never before by an increasingly competitive global economy. But if talent is being drained away from education and government, this society will not have the shrewd and competent leadership it will need to survive the challenges ahead.

The situation is made all the more urgent and insidious by the increasing intellectual incompetence of college students. Not only does it take more energy and resources to prepare these students to compete in their global economy, but since future educators are recruited from these ranks, it will become more and more difficult to stop and reverse this intellectual decline. Bok predicts certain disaster five years from now when the children of the baby-boom generation enter college. This generation will be 40 per cent more numerous, and the dismal product of under-staffed and under-financed secondary schools. Universities must begin now to prepare themselves, or face a calamity.

In Bok's view, the decline in the intellectual quality of teachers is beyond dispute. Studies show that through the 1970s and 1980s, the average SAT score of the college graduate who chose a teaching career has declined steadily and steeply, so that it now is in the lowest SAT percentile.

Bok sees in these figures a sign that the brightest students are no longer going into education or government service. And no wonder. The salaries offered by these professions are simply too low to any longer attract talented college graduates. Instead, the top talent goes into business, medicine, or law, thus avoiding a life of marginal comfort and elusive economic security--and jeopardizing the future of America.

To correct this problem, Bok proposes several radical remedies. He urges that public opinion should be mobilized (by whom?) against "excessive" executive compensation. Lawyers should cut their "costs" (and perhaps incomes) by offering legal-insurance plans. The compensation of doctors should be regulated through managed competition and HMO plans.

Readers of The Montana Professor will be pleased to learn that Bok also proposes that the salaries of teachers should be raised to whatever level necessary to reverse the trend that those hired as teachers have declining SAT scores. Universities should offer higher salaries to attract new Ph.D.s who might otherwise go into business, or even government. Government itself should offer academic grants and salary increases through a steeply progressive income tax, which would raise, Bok believes, over $20 million annually.

But these proposals are overkill. Even if everyone were sure that Bok's forecast of pedagogic disaster is accurate, it seems overwrought to re-structure several other professions so that teachers get paid more in order to lure talented students into becoming teachers.

And I can't help but feel that Bok's outrage at the salaries earned by private professionals smacks of envy. Bok spends a lot of his time in this book stirring up egalitarian resentments against vast wage differences. Too often what poses for argument is an appeal to the reader's presumably shared view that the differences between salaries is inherently inequitable. Nowhere does Bok demonstrate that the remuneration paid to these professions actually diminishes the supply of money with which to pay persons in the intellectual professions or in government service.

Moreover, if a decent living standard and the promise of economic security would induce the top talent among college graduates to opt for teaching careers, then simply making those careers more remuneratively attractive, rather than restructuring the pay difference among all professions, seems a much more obvious and workable reform, one specifically tailored to the perceived problem.

All in all, Bok does not make a convincing case that the practitioners of some professions are paid too much and those of other professions are paid too little. How would one establish independent standards for measuring such things? Nor does he make a convincing case that some professions are brain-draining talent from other professions with potentially disastrous consequences. After all, this society needs outstanding heart surgeons, international lawyers, and entrepreneurs as much as it needs outstanding teachers and bureaucrats. Indeed, maybe it needs them more, and that's why it pays them more. If the school system is decaying because more educationally challenged people are going into it as teachers and administrators, the task of educating people to compete successfully in the national and international marketplaces may be taken over even more by corporations. A number of educators, of course, are already teaching in them.

The issue that Bok probes in this thin book is an intriguing and important one, but it will continue to remain painfully elusive until it receives a far more exhaustive, and methodologically rigorous, treatment.


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