There is a colloquial English expression that if you “pay peanuts you get monkeys.”  While In the United States it is more common to imagine that monkeys prefer bananas, the meaning is not lost over the Atlantic.  Namely, you get what you pay for.

I was reminded of this aphorism this past week in Singapore — a nation I have always admired for both its commitment to government service and its willingness to pay for it.  The Prime Minister of Singapore, Lee Hsien Loong, is paid an annual salary of $2.2 million Singapore Dollars or approximately $1.6m USD. Undoubtedly, a talented and experienced man such as Mr. Lee could earn substantially more in the private world, but his salary combined with the perks of office appear not too far off market to me. Contrast the case of Singapore with the UK, where the new PM, Liz Truss, will be paid £164,080 GBP per year or approximately $180k USD. For comparison, the US President is paid an annual salary of $400k.

I am perfectly aware that even the UK Prime Minister’s salary is far more than the average worker makes over several years and that it is elitist, non-woke and politically treacherous to suggest that these public servants should be paid more; however, my grasp of economics and human motivation drive me to this unpopular position.

While there are many cases of corporate boards and others showering senior executives with greater riches than may necessarily be required to attract and motivate the right talent and while the market for leadership talent is neither efficient nor transparent, nonetheless I firmly believe that if we seek to be governed by high quality leaders we should pay them something closer to market rates.

In economics as in hydraulics, water seeks its level.  If hypothetically we determine that the job of leading a given nation merits a salary of $1m but that there are applicants willing to do the job for $200k or less, there are several possible explanations. First,  and most optimistically, we have found a truly selfless soul willing to make a significant personal sacrifice for the benefit of her fellow citizens.  Second, and, unfortunately, more likely is that we have either hired (elected) an unqualified candidate or attracted a politician who will make up the missing $800k per year through other means.

How does a leader go about recouping his discount to market rates?  At worst, through direct corruption (Hint: think Trump via his hotel in Washington or Baby Doc in Haiti); at best by an implicit investment during his term in office to be recouped in later years through book deals, speeches, etc. (think Clinton, Obama, or Blair).  Alternatively, there is the model of the independently wealthy candidate (think FDR, Bush Sr. and Jr., or Bloomberg); in fact, members of Parliament were unpaid until 1911 in the belief they enjoyedindependent means. There is also the non-financial variant in which the candidate derives equivalent compensation by consuming fame to satisfy his narcissism or access to additional mating opportunities (think Trump, JFK or Clinton again).

The 2009 “expenses scandal” in the UK provides a good example of water seeking its level.  In addition to their then annual salary of £64,766 members of Parliament were entitled to claim the reimbursement of expenses “wholly, exclusively and necessarily incurred for the performance of a member’s parliamentary duties.” Needless to say, the creativity of parliamentarians knew no bounds: Second homes claimed as primary residences, nanny expenses, no-show family-member employees, etc.

I single out the UK experience not because I think it is the worst; to the contrary it is fortunately a country that still can muster appropriate public censure for such corruption.  Rather, I think it is an example that proves my point that Singapore has the better model.

There are differences among people — not their gender or color or religion, but their aptitude,  experience, qualifications for a given job, and commitment.

Better to pay our government leaders transparently something closer to what they could earn in the private markets than to pretend that money doesn’t matter and then be perennially surprised when water finds its level.