It is fashionable today to bash Big Business. And there is one issue on which the many critics agree: CEO pay. We hear that CEOs are paid too much (or too much relative to workers), or that they rig others’ pay, or that their pay is insufficiently related to positive outcomes. But the more likely truth is CEO pay is largely caused by intense competition.

It is true that CEO pay has gone up—top ones may make 300 times the

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