Book review for Financial Times

This is the text of my latest book review for the Financial Times. It is the first time I have covered anything to do with classical antiquity in my writing.

Is there any way of escaping the terrible rut into which the debate about executive pay has fallen? As things stand, discussions of the subject generate huge amounts of moral indignation but conspicuously fail to indicate any way out of the quagmire.

Most of the public debate follows a depressingly familiar pattern. First, it emerges in the news that a top executive has received compensation that is many times the average income. Typically the package will include a large performance-related bonus on top of a substantial basic salary.

Next, both sides of the argument spring into action. The critics maintain that it is outrageous, especially in these austere times, for anyone to be paid so much.

Then the company’s defenders insist the exceptional rewards are merited by performance and, in any case, they are the market rate for the job. Both camps genuinely believe they have fairness on their side.

Ultimately there may prove to be no way out of the quandary, but it is worth investigating the possibility of resolution. The Ajax Dilemma by Paul Woodruff, a classical scholar at the University of Texas at Austin, provides intriguing insights into the question.

To those unschooled in the classics, which include this reviewer, ancient Greece may seem a perverse place to start. It is not immediately apparent how those who lived in pre-modern times can provide insights to complex contemporary issues.

But it turns out there are at least two reasons why it is worth going back to the ancients. Most importantly it provides a way of focusing on first principles in relation to many thorny debates. Ancient Greece was, as far as is known, the first place where many important topics were systematically discussed.

A secondary benefit is that moving away from heated contemporary debates makes it easier to identify the fundamental questions involved.

Woodruff’s approach is to outline the myth of Ajax, the Greek hero of the Trojan war, before drawing more general conclusions from the tragic tale. In the story, adapted from Sophocles’ play, the Greek army is camped outside Troy after the two sides have fought nine years of war.

Agamemnon, the Greek king, decides he should give the armour of the recently slain Achilles to his most valuable soldier. The choice is between Ajax, extraordinary large and brave, and Odysseus, a skilled orator and cunning strategist. Agamemnon lets both soldiers argue their case in front of a jury; a procedure that gives Odysseus, with his rhetorical skills, an inherent advantage. Eventually Ajax kills himself after being dishonoured by the decision to award the prize to Odysseus.

It is impossible to do justice to the subtlety of Woodruff’s work in such a short space but some of the main themes can be highlighted. It should be apparent that there are many contemporary Ajaxes, loyal and hardworking employees, who can feel slighted by the rewards lavished on certain colleagues.

The difficulty of making meaningful comparisons of performance is also apparent. Brave soldiers and clever strategists are both vital to an army’s success, but have different types of skills.

Most contemporary managers would argue that the answer is to have a transparent set of rules to ensure fair decisions. But Woodruff argues against such an approach as rigid and unlikely to lead to satisfactory outcomes.

His alternative to fairness is justice. In Woodruff’s view these are fundamentally different concepts as justice involves the exercise of discretion rather than the mechanical application of rules. Justice demands true leadership rather than the mere management exemplified by Agamemnon.

Ultimately the Ajax dilemma cannot be resolved on its own terms. By the time Ajax and Odysseus were set against each other in competition the outcome was always likely to be tragic.

Tackling such conflicts means first developing a system of shared meaning that is widely accepted across society, and then reaching a social consensus by debating shared basic values.

Solving such dilemmas also demands the development of true leadership through cultivating individuals who have the wisdom to exercise judgment, rather than hiding behind procedures.

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‘The Ajax Dilemma: Justice, Fairness and Rewards’, Paul Woodruff (Oxford University Press, 2011; $19.95)