News stories frequently focus on how a certain celebrity or sportsperson’s earnings have surpassed another amazingly high figure. With talented sports stars we are frequently left wondering why some sports seem to pay very high wages for those at the top of the sporting ladder while other sports seem to reward their best with relatively little in comparison. In some cases we may be outraged that a particular celebrity earns so much without any obvious source of talent.
Often accompanying these news stories are calls for the government to intervene to stop earnings rising so quickly. Whether it be the earnings of company bosses, celebrities or sportspeople, conclusions are often reached that ‘something’ should be done. Usually the solution seems easy — people shouldn’t be allowed to earn so much. Good economics students know that although it may be easy to decide that something is wrong with a particular market or outcome, it is another thing to believe that something can or even should be done about it.
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