In an effort to inject (other people's) common sense into the bankers' bonus debate, I recommend this paper by Jens Beckert Where Do Prices Come From: Sociological approaches to price formation [pdf]. In this paper, Beckert writes:
My starting point is the price theory developed by Emile Durkheim. In several of his works (Durkheim 1947, 1992) Durkheim deals with the issue of prices by asserting that prices are social facts. By this he means two things: first, that price is an external feature confronting market actors from the outside. Market participants are in this sense price takers. Very much in line with the economic reasoning of his contemporary Léon Walras, Durkheim considers prices to be outside the reach of economic actors, something the individual demander or supplier on markets cannot influence (Steiner 1992). Second, and here Durkheim diverges from economic price theory, he considers prices under “normal” circumstances as reflecting public opinion on the value of a good; prices correspond to the normative principles of society for a just allocation of goods. Durkheim deviates from economic reasoning by seeing the objectivity of prices as emerging not from an aggregation of individual preferences but from social norms, thus following his dictum to explain social facts by social facts.
Clearly public opinion regarding bankers' bonuses has recently changed, only to discover that the price of a banker can't be as easily altered as people might have liked to think. Debates about who technically has 'earned' or 'deserved' what are futile, as they only end up in clashes between rival moral worldviews, which cannot be settled by economics. Considerable work has gone into hiding the moral character of banker remuneration, but the prices themselves were scarcely a secret (even if you weren't aware of what went on in banks themselves, as few were, you might have thought to question why house prices were six or seven times average salaries or why London was filling up with lapdancing clubs).
This is the issue of moral pluralism with which so much economic sociology of valuation and 'worth' is now preoccupied. In a sense there are two forms of evaluative pluralism. There are 'synchronic' forms, in which people inhabit rival spheres of worth simultaneously (e.g. bankers believe they are 'worth' £5m a year, but others disagree). This is what is explored in Boltanski and Thevenot's On Justification or Stark's The Sense of Dissonance. Then there are 'diachronic' forms, in which one sphere of worth succeeds another (e.g. bankers used to be 'worth' £5m a year, but no longer are). This is what is explored in more Marxian approaches to regulation, and also in Boltanski and Chiapello's The New Spirit of Capitalism.
Synchronic pluralism is a little more fun, because it enables villains to be identified and criticised in real time, in the media: bankers are scum! Diachronic pluralism is far less fun, and indeed uncomfortable, as it reminds us that we too once adhered to a moral worldview, which we now find despicable: financial manipulation is no longer a legitimate basis for reward. This makes for lousy entertainment, and painful honesty (as I tried to describe here).
Far be it from me to disrupt the banker bashing, which I'm enjoying as much as anyone. In truth, there is probably an element of both synchronic and diachronic pluralism going on: we were never quite in the same moral world as the bankers pre-2008, but we've only now discovered how little our's overlapped with their's. But until there is a more politically explicit basis on which to value things than the prices that happen to be offered (which can always be validated as correct and efficient if enough depends on it being so), or an alternative way of establishing what a price should be, it is scarcely a banker's fault if he takes home what the system says he's worth. An alternative notion of worth needs embedding in institutions, not simply rhetorically thrown about for fun.