probably the first modern business leader whose face became as
recognizable as a film or rock star’s. Americans have always
tended to see their institutions as the lengthened shadows of
great men—a tendency that drove a genuinely collaborative
leader like John Adams to near madness—and we have tended
to reward such charismatic leaders out of proportion to their
contribution. But that tendency got completely out of hand in
the last years of the twentieth century.
The principal indicator of how out of sync the image and real-
ity of the typical corporate leader had become was executive
compensation. No one expects successful entrepreneurs or hard-
working heads of successful companies to take a vow of poverty,
but executive compensation spun out of control in the 1990s. In
1970, a CEO in America made forty-four times as much as the
average worker. By the year 2000, the average CEO was making
more than 300 times the average worker’s salary, according to
the AFL-CIO. BusinessWeek reported in 2002 that America’s top
executives had median annual compensation of $11 million, in a
nation where the median income is around $30,000 a year.
The most disturbing aspect of this grotesque disparity is that
it underlines the dangerous and growing gap between the 1
percent of Americans who control 50 percent of the wealth and
everyone else—namely, the vanishing middle class and a bur-
geoning underclass that lacks hope and health insurance. The
rise of the middle class was the great economic success story of
the second half of the twentieth century. The disappearance of
that middle class, made up of people who had come to believe
that loyalty and hard work would bring security and a comfort-
able standard of living, may well turn out to be the most im-
portant economic story of the new century. And unless the
current trend toward more and more wealth in fewer and fewer
hands is reversed, it could be a very grim story indeed.Introduction to the Revised Edition, 2003xvii0465014088_fm.qxd:0738208175_fm.qxd 12/2/08 2:52 PM Page xvii