An article in the New York Times explains how superstars tend to dominate the markets they cater to. Starting with sports legends like Pele, who earned $150,000 when he was at his peak, there now athletes, actors, TV anchors and bankers who earn the lion’s share of the cake. While this works wonderfully for the persons getting it, it tends to squeeze all those down the line. Take the cost of a Tamil film – one in which a superstar or any top draw actor is involved. The economics of that film take on risk proportions far greater than those involving lesser actors. Look at the production costs as well. The greatest slice in that budget is the superstar’s pay, not any of the other aspects involved.
Take the IPL auction where the top 10 players get amounts far greater than any of the other. The other 80 players get a better deal but nothing close to what the ones on top command. Is the difference in ability substantial? Is original talent not valuable? That capitalism rewards inequalities is common knowledge. What is lesser known is the way it skews markets towards those who dominate it. So is communism any better? I hardly think so. One just has to look at China where communism fuses with capitalism. And those who dominate the system are those at the top. So there’s no point in blaming the political system
Anyone who controls a resource will set up the rules to benefit themselves. Whether it is political parties, game administrators or bankers. They hold the lifelines and the paths to power. Until someone creates a new resource. Or a new market. Then the new status quo will kick in and stay as long as it benefits the leader.