Another thought, maybe democracies are pretty good at calculating the right salary for it's 'managers'. Whereas companies are less competent at this process. In a world where management is overvalued it's quite natural that there are richer pickings in the boardroom. OTOH companies are probably pretty good at estimating the wage of a burger flipper, I'm less sure collectivists are. Maybe unions would be better off and more popular by concentrating on the salaries of the management rather than the workers.

You're absolutely right that incentives require other conditions. Noting that technology is not just about replacing human capital but provides other efficiencies too, whether that is producing higher value goods or enabling construction projects which would not be possible or affordable otherwise. In the case of the industrial revolution if there was a larger demand for technology to be used (for labour saving), it follows that a larger number of creators of that technology would be needed too. Critical mass is very important for developing innovative technology, although there are exceptions most technology companies are concentrated in a relatively small number of locations, think Silicon Valley etc.

On the other hand the situation maybe evidence that manager as a leader can be a good thing. At least in terms of perception. Investigative journalism like many endeavours will always involve a risk of failure, also there is a chance of a disproportional reaction when the failure occurs. Perhaps it is better for the boss to get shit canned rather than more drastic alternatives.

I always enjoy your blog. One niggle is that when you have talked in the past about the effect of various cognitive biases in the business environment. But doesn't it seem that trade unions (in particular their leaders) are susceptible to exactly the same biases?

Your first theory is the most plausible, and so now the major factor deciding the result of modern elections based on the perceived performance of the current government which is largely determined by the state of the economy and general well-being. Arguably these performance factors are largely out of the hands of governments. There are rare occasions where governments do something to win future elections, but most often these are right wing activities, e.g. exploiting council house sales and public flotation of utilities. On the left the only major popular success appears to be the NHS, hasn't this blog mentioned before that the left has a problem making leftist government policies popular? In the public at large, who misses The New Deal or even remembers what it was? Now the low hanging fruit of right-wing government policy has gone there is little incentive to generate new policies other than say that any failings are down to the concept of national government. This is where US politics is at, and explains why the right is becoming more extreme.

@Martin, I've rarely (fortunately) found that programmers in a position to have a choice are that cynical - usually because the net effect will hit them. Manager's and marketeers are a different matter :)

Don't underestimate the conditions of an interview process. If you think that's similar to the pressure of a deadline by proxy, I disagree. I've worked with very good programmers who I think disintegrate under the scrutiny of someone who looks quizically at them when they've been used to (for years) people trusting their judgement. Hell there are even psychological experiments which can coerce people into non-natural behaviour (think the Milgram experiment as an extreme example). The most difficult thing to evaluate and the most important aspect of a candidate is how hard they work. You can hire someone who can recite an algorithm or do The Times crossword in ten minutes but if you only get ten minutes of work out of them a day then they're fucking useless. Another thing I've noticed is how poorly people are trained to interview potential candidates. How many companies track the ability of an interviewer? The fact is, is that in most cases people hire people who are like them.