Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 10

Discuss the following statement in relationship to (a) the tournament theory of executive pay and (b) the "World of Work" 7.2 on faculty tenure: "The new economics of personnel rationalizes whatever exists. If a compensation structure prevails, so goes this view, it must be efficient. The policy implication therefore is to 'let it be' (laissez faire). Thus what poses as economic analysis is actually political conservatism."