Fear of Finance II
I wound up being quite unhappy with my "fear of finance" piece, because it completely ducked one of the most important questions: why the extraordinarily outsized pay packets of the high financiers? Why doesn't competition--which sorta works elsewhere in the economy--cause us to see greatly reduced earnings? We understand, we think, why celebrities get paid so much--a combination of increasing returns in distribution, being the genuinely best in the world, and being well-known for your well-known-ness. But why financiers?
What is it that blocks effective entry and competition, exactly?
