The Rationale of Reward

Book II

Rewards Applied to Offices

Chapter V


Rule IV. The nominal and real amount of salaries ought to correspond.

In other words, no deduction ought to be made from the real value of a salary, without reducing its nominal amount. The practice which has frequently been adopted in England, of reducing the real value of salaries and pensions by taxes and other deductions, while the nominal amount of the salaries has remained unaltered, has given rise to this rule. In some instances, the deductions thus made have amounted to one-third of the nominal salary.

No advantage arises from this arrangement, but its inconveniences are numerous. In the first place, it is an evil. In so far as it spreads an exaggerated idea of the sacrifices made by the public, and the expense incurred under the head of salaries. With respect to the public functionaries, it is an evil to possess an income greater in appearance than reality. The erroneous conceptions hence entertained of their wealth, imposes upon them, in deference to public opinion, the necessity of keeping up a correspondent establishment: under the penalty of being considered niggardly, they are compelled to be extravagant. It is true, the public are aware in general, that salaries and pensions are subject to deductions; but they are oftentimes only acquainted with a part of the deductions, and they seldom in such cases enter into minute calculations.[1]

In this manner, the difference between the nominal and real value of a salary tends to produce an increase in the wants of the individual employed. Call the amount of his salary what it really is, and be will be at ease, but every nominal addition will prove a costly ornament. If the opportunity of illicit profit be presented to him, such nominal addition will be an incentive to corruption; and should he not be dishonest, it will prove a cause of distress.

The remedy is simple as efficacious: the change need only be in words.

[RR, Book II, Chapter IV] [RR, Book II, Chapter VI]