Q. Is it fair for Wall Street traders to be making tens of millions of dollars a year?

A. Last week we discussed whether traders are engaging in socially worthwhile work, as opposed to some kind of rip-off. Based on the evidence I am aware of, I wrote that traders seem to be engaged in a job like any other, earning a salary based on performance which results from a combination of skill and luck.

Some people may be willing to grant this point, but still feel that at some stage salaries become "obscene" or "excessive." In the US, there is legislation limiting how much salary can be considered a legitimate business expense. (Ironically, this supposedly "salary limiting" legislation is partially responsible for the compensation system of traders, who get a low base salary partially for this reason.)

It is interesting that no one has tried to limit how much money can be made from a business, or by an athlete. For some reason, people don't have a problem with the fact that people like Bill Gates of Microsoft or Sam Walton of Walmart can make billions of dollars from the firms they founded, or with the hundred million dollars earned in a good year by outstanding sports talents like Tiger Woods. Yet it disturbs them that a "regular" salaried worker like Andrew Hall can earn a hundred million dollars a year. Perhaps it is because a salaried worker is working with "other people's money" and not risking his own.

I think we can find a precedent for this attitude in the Torah. The patriarch Yaakov begins working for Lavan as an impoverished hand. But his management of the flock is so successful that soon his salary (a percentage arrangement worked out with Lavan) makes him a wealthy man in his own right. Lavan's sons became jealous: "And he heard the words of the sons of Lavan, saying: 'Yaakov has taken everything belonging to our father, and from what belongs to our father he obtained all this honor" (Genesis 31:1). Yaakov after all was merely a hired hand; it didn't seem right for him to become a wealthy householder in his own right from a mere salary. But Lavan's daughters, who are Yaakov's wives, recognize the truth: "All the wealth that God saved from our father, it is ours and our sons'" (Genesis 31:16).

Later on we find a similar story with Yaakov's son, Yosef. Yosef is acquired as a slave in the household of Potiphar. There, he makes shrewd use of his master's possessions. "And it happened, since he appointed him on his house and on all that was his, that the Lord blessed the house of the Egyptian because of Yosef." Yosef, despite being a slave, was allowed to enjoy a standard of living commensurate with the profits he brought his master, as he says to Potiphar's wife (Genesis 39:9), "and he hasn't denied me anything except for you, seeing that you are his wife." It is likely that jealousy towards Yosef's success also played a role in the enmity borne him, which resulted in his imprisonment, but certainly we do not find any condemnation of Yosef's generous remuneration merely because he was managing "other people's money."

To sum up, I don't find that there is any reason to condemn someone for making a lot of money merely because they are managing and risking someone else's money and not their own. If any person, such as Yaakov or Yosef, lacks funds of their own but shows a unique talent for effectively managing the funds of others, there is no reason they shouldn't enjoy a fair return, up to an including making them independently wealthy like Yaakov or enjoying the lifestyle of a lord like Yosef.