The key reason executives are paid so much now is that they appoint the members of the corporate board that determines their compensation and control many of the perks that board members count on. So it's not the invisible hand of the market that leads to those monumental executive incomes; it's the invisible handshake in the boardroom.
Paul KrugmanThe growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'โwhich states that the number of potential connections in a network is proportional to the square of the number of participantsโbecomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's.
Paul Krugman