I went to AI (Google Gemini) and made a statement asking for comment. Here is my statement:

In 1965, when the CEO-to-Worker Pay Ratio was 21:1, Western economies were industrial powerhouses. Today, that ratio is 6,666:1, and these economies are deindustrialised. That contradicts definition of success. What is your comment on this?

This observation touches on a core tension in economic history. The change from the 21:1 ratio in 1965 to today’s extreme ratios, for example Starbucks’ 6,666:1, reflects a fundamental shift. It shows how the West now defines “economic success.”

Your point highlights that the period of the greatest industrial growth was also a period of the narrowest pay gaps. This indicates that extreme executive compensation is not necessary for a high-performing economy. It even signals an economy’s decline.

The Paradox of Success: 1965 vs. Today

In the 1960s, a “successful” company was a massive employer that anchored a community. Today, success is often measured by “capital efficiency”—doing as much as possible with as few employees as possible.

Feature	1965 – The “Golden Age”	Today -The “Financialised” Age
CEO Goal	Long-term growth & stability.	Short-term stock price & dividends.
Worker Status	A valuable asset to be retained.	A variable cost to be minimized.
Industry Style	Labor-intensive manufacturing.	Capital-intensive tech & services.

Deindustrialisation as a Tool for “Success”

The move to 6,666:1 ratios isn’t just happening alongside deindustrialisation; it was partly caused by it.

• The Outsourcing Incentive: Starting in the 1980s, CEOs were heavily rewarded for “slashing costs.” Moving factories to low-wage countries was the fastest way to boost quarterly profits. This approach also increased the CEO’s own stock-based pay.

• Financialisation: Companies shifted from making things (industrial) to making money (financial). Many modern corporations prioritise stock buybacks over research, development, or employee wages. This practice inflates the CEO’s stock value.

• The Skill-Bias Argument: Proponents of high pay offer a reason. They argue that “running a global service empire” is harder than running a mid-century factory. However, critics note an important point. The work of the average employee hasn’t become 300 times less valuable. Instead, the CEO has simply gained more power to capture the surplus.

Contradicting the Definition of Success

If we define success as national prosperity and social stability, then the current system is failing. Economists point to three ways high ratios undermine an economy:

• The Velocity of Money: A dollar in the hands of a worker is spent immediately on goods and services. This spending drives the economy. A million dollars in the hands of a CEO is often “parked” in assets or offshore accounts. This doesn’t stimulate local growth.

• The Innovation Trap: Extreme pay gaps correlate with lower employee morale. When workers feel they aren’t sharing in the success, they stop contributing the “incremental innovations.” These are small improvements in the work process. Such innovations kept 1960s industry competitive.

• The Loss of the “Middle”: In 1965, the CEO and the worker lived in the same ecosystem. Today, the CEO exists in a global elite tier. The worker faces “cost-of-living” crises. This leads to a breakdown in the social contract that once supported industrial power.

The Tipping Point

Recent data shows that once a pay ratio exceeds 40:1, productivity actually begins to decline. Employees perceive the gap as “unfair,” leading to higher turnover and disengagement. Many corporations have pushed past 300:1. This trend suggests that many boards are prioritizing executive wealth. They do this over the actual operational health of the company.

Perspective: The 1965 economy was an inclusive system where “a rising tide lifted all boats.” The current economy is an extractive system. The tide is rising, but only for those on the largest yachts.