Egalitarianism 107


I have no excuse for not blogging the last couple of days, other than that I have been taking long walks over the beach and cliffs with my family. I feel wonderful for it.

There has been much well deserved publicity for the report of the Low Pay Commission, which stated that we are fast returning to Victorian levels of inequality as the gap between rich and poor grows wider at an extraordinary pace. The reaction of talking heads all over the broadcast media has been that it must be for shareholders to set executive remuneration.

Plainly this does not work. Thomas Cook is going under, and it paid its chief executive, who resigned last year, £7 million in four years.

JJB Sports is also going under. It has huge debts, but these are less than its founder, the appalling Dave Whelan, took out of the company himself. Whelan characterised a brief strike against terrible labour conditions at the company’s depot as “communism”. He is a big donor to the Tory party. He is chairman of Wigan Athletic, and his view on racial abuse on the pitch is that “black players have just got to get on with it”.

I am not a fan of Polly Toynbee. She supported Blair tirelessly, appearing not to notice that it was in fact the Blair years, not the Thatcher years, that saw the huge acceleration in the gap between rich and poor. She continued to support New Labour war criminals on the grounds that a tiny improvement in the conditions of poor children in the UK was more important than the lives of hundreds of thousands of children killed or mutilated abroad in Blair’s Wars – a view tantamount, in my view, to racism.

But the blinkered old bat got something right when she scathingly dismissed the notion that it was shareholders who should control excessive wages. The shareholders of major corporations, she said, are often many thousands of miles away, and are fund managers who hold and dump shares fleetingly as short term speculation. They have no more say in running the company than a punter who bets on a racehorse has in running the stable. An excellent analogy.

Governmental regulation is needed to stop ridiculous inequality. Transparency is important, as the government seems prepared to admit, but will not solve the problem. Nor will employee representation on remuneration committees. These employees will be senior “trusties”, and if not, will be subject to all the threat implicit in the government drive – the most energetically pursued of all government policies – to end employees’ rights and protection from unfair dismissal. That loss of employee rights will undoubtedly increase the wealth gap. If you make it easier to sack people, it is a lie that companies will hire more people. They will sack more people.

I maintain that the law should state that net total reward for the highest earner in a company or organisation should not be more than four times the rate of reward per hour for the lowest paid employee. So if a cleaner gets £320 per week for a 40 hour week, the boss should be able to get up to £2240 per week if he works a 70 hour week.

This would have one very good effect – you would in short time find the cleaners getting paid a lot more so the boss can get more. It would need to be plain that agency or sub-contractors working within the company count – so Goldman Sachs can’t just get someone else to clean their toilets. The idea would work particularly well in the public sector, where a whole new raft of super-rich public employees were deliberately created by New Labour.


107 thoughts on “Egalitarianism

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  • Jives

    @ David

    “those crazy people chucking stuff at the japanese wailers.”

    Leave Yoko out of this :.)

  • Fedup

    Glenn,
    David is not a business person, he is talking out of his elbow. Credit crunch means banks not lending, ie no overdraft, and no loans of any sorts, for anyone specifically the small business sector. This genius firstly holds; he is paying 30k to his lowest paid employee, then he calculates an average of 20k wages for his staff! Whilst arguing against any limits on his own takings, although he admits ….. in the good year, and bad year and could it be….. and wouldn’t it be ……. This is a wannabe tosser living in hope with no idea about how to run a business.
    ,
    So far as Adam Smith goes, as ever anyone can interpret any text to any ends, and validate any contentions. After the first twelve pages of Wealth of the Nations which everyone seems to have read, towards the end Smith contends that his theory does not hold much water pass the most rudimentary levels of its applications.
    ,
    To put a market price on the breast feeding of a mother, and or a market value on every nappy changes after the feeding, somehow cannot be achieved. The simplistic reductionist notions adduced based on the initial fifteen pages are solely designed to maintain the status quo, and are the stock in trade of those bent on obfuscation of the horrible realities.
    ,
    Jobs migration what a load of bollocks, there are no jobs migration but behind the closed door deals, and under the table transactions bartering on the macro specialisation dependent on the ratios of returns sought. ie we stop mining coal in UK, stop making steel, plus many other sectoral run downs, you the johnny forefinger stop building up a financial sector. In turn the interest rates levied on the same based on arbitrary rankings and ratings render the various foreign operators to higher rates of unemployment and austerity, which creates pressures for the population to migrate, that in turn is for ever vilified, and ranted about, that in turn reduce the expectations of the migrants; to accept less pay, and more hardship to escape the hunger, and the cold. The pressures born upon the migrant poor, are further compounded by making escape goats of these, and heaping all the ills of the society on the roving poor, which leaves the politicians to get on with their business of serving the Plutocrats, and the Oligarchs.
    ,
    However, since when reason has had anything to do with economics, and politics? Both these sectors rely on fashion and hearsay long on bullshit, and short on sense, at times resorting to mathematics with little or no understanding of the subject.

  • CanSpeccy

    “I can see a big difference between Lenin, Hitler, and Robert Owen”
    .
    No doubt, John, you can. But it was the “autocratic visionary” you seemed to advocate that I was comparing with the great dictators.
    .
    Mondragon, incidentally is off-shoring jobs too, they operate on five continents. Yet between 2006 and 2010 their work force fell from 83,601 (the vid you linked to) to 83,859 according to Trikipedia. So I don’t think a cooperative style of management is going to solve the current European employment crisis. Certainly, it isn’t working in Spain.

  • Jives

    Capitalism? Communism? …Pffft!

    It doesn’t matter which system,in either the scum always rises,so to speak.

    This Manichean and polarising guff is part of the problem.The idealogues and their dogmatic interpretations enable the very worst in any rigid system or doctrine to wreak havoc at the little guys expense.

    Same old same old.

    What we need is flexibility and realism,particularly when the shit is falling apart.The problem with ideology is it becomes entrenched and hubristic.A stupid kids game where nobody can be seen to blink first-even as we’re all going to hell in a handcart and we all know it.

  • CanSpeccy

    “My worry is we’re in danger of jeopardising and stigmatising many genuinely hard-working and worthy small businesses”
    .
    That’s actually what is being done here. Not that it matters. The oligopolists, the people who control the 146 corporations that control the majority of all of the World’s multinational business are working night and day to screw small business competitors, so what anyone here says won’t make any real difference.
    .
    “when we all know the real problem is the obscene practices of the oligarch class. I refuse to call them the elite btw.”
    .
    I think the “oligarch class” is not a good alternative to “elite” defined by Merriam Webster as “a group of persons who by virtue of position or education exercise much power or influence.”
    .
    The point is, you don’t have to be a member of the oligarchy to be a member of the elite. An ex-ambassador is a member of the elite — unless he’s a renegade ambassador, in which case he’s not allowed to appear on the BBC and so is not a member of the elite.

  • Jives

    @ CanSpeccy

    “Vidal was a CIA asset”

    Interesting.I’m a fan of his writing,his essays in particular.
    In the wilderness of mirrors it’s entirely possible he’s a CIa asset of course and it wouldn’t surprise me in the least.

    Do you have definitive proof or are you just guessing?

  • Jives

    @ CanSpeccy

    “That’s actually what is being done here. Not that it matters. The oligopolists, the people who control the 146 corporations that control the majority of all of the World’s multinational business are working night and day to screw small business competitors, so what anyone here says won’t make any real difference.”

    Agreed that it’s being done here which is why i’m genuinely worried that we should be doing the bastards work for them here.

    “The point is, you don’t have to be a member of the oligarchy to be a member of the elite.”

    Agreed and understood.However they remain fixers and stooges,albeit as bottom-feeders of the oligarchs.I still consider them part of the class.

  • Canspeccy

    “Capitalism? Communism? …Pffft!

    It doesn’t matter which system …”
    .
    Don’t be absurd. The fact that the scum always rises — if it is an invariable reality, doesn’t mean that the damage they do is unrelated to the political and economic system within which they operate.
    .
    What we have now is an oligopolistic system not much different from the system of cartels established in Germany under Hitler and extended to France, to the delight of French industrialists, during the occupation.
    .
    But it is surely the case that a competitive system, tempered by measures to provide jobs at a living wage for all those able to work, would be better than what we have now and better than what the Russians had under the Soviet regime.

  • glenn

    My posts have all shown up, about 8 hours late, so now there’s loads of duplicates! How embarrassing. I wonder how many posts are overlooked because when they finally appear, they’re before the point at which new posts are expected.

  • Canspeccy

    “we should[nt] be doing the bastards work”
    .
    Agreed on that!
    .
    But let’s do something practical about it. I never did get a clear message from the Occupy people as to what they wanted. They should have created a manifesto. Probably it would have been nonsense and everybody would have been against them instead of generally for them. But if they got it right, an economically sound set of proposals for full employment, jailing of politicians who take money as friends of foreign governments, corporations etc., then we might now be further forward.

  • CanSpeccy

    “My posts have all shown up, about 8 hours late, so now there’s loads of duplicates! How embarrassing.”
    .
    Don’t worry. Everyone’s used to this crap blog software buggering everything up.

  • Jives

    @ Canspeccy

    “But it is surely the case that a competitive system, tempered by measures to provide jobs at a living wage for all those able to work, would be better than what we have now and better than what the Russians had under the Soviet regime.”

    I don’t feel i’m being absurd.My point is simply that in any system invariably the bastards who run the show play the same games in order to feather their own nests best.Your last paragraph is an extension of my point.Yes,i agree,if “tempered by measures ” etc had been practiced it would be reasonable.Clearly there has been no tempering of measures in either system.The goal posts simply get moved,at will,to suit the ones at the top.

  • Barbacana

    Setting a limit for CEO pay as a multiple of the lowest pay or the median pay is sensible, but making the multiple as low as four is silly, and will prevent anyone from taking the suggestion seriously.

    In the ‘robber baron’ days at the end of the last century, capitalists like Andrew Carnegie and Henry Frick paid themselves about 40 times the median salary of their employees. Today, CEOs pay themselves 100 (or more) times as much as the median salary. Going back to ratios of the robber-baron days would actually be a huge leap forwards. In time, a ratio of 20 or so might be a reasonable aim.

    But it is simply a fact that some people’s work is worth much more than others’, as a result of ability, education, experience, effort, or some combination of those. As long as ratios are kept within reasonable bounds, we all gain when people have incentives to do their best.

  • Jives

    @ Canspeccy

    “They should have created a manifesto. Probably it would have been nonsense and everybody would have been against them instead of generally for them. But if they got it right, an economically sound set of proposals for full employment, jailing of politicians who take money as friends of foreign governments, corporations etc., then we might now be further forward.”

    Agreed again.I do have a sense,sadly,that what we’re seeing with the Occupy movement is more a genuine but scattergunned expression of understandable anger.They may not,however,have the necessary brains/experience to posit articulate and coherent economic arguments.I wish they did though.

    Right,i’ll catch you all later,i’m off for a pint.

  • John Goss

    Canspeccy, Father José Mª Arizmendiarrieta was an industrial autocratic visionary, like Owen in his own way, both believing in social progress. The basic model enshrined in the vision of Mondragon still caters for workers within the group long after the death of the priest who started it. The Mondragon Group still operates successfully in Spain even though the Spanish economy in general is in a bad shape. And because it has to trade with the rest of industry it is likely to feel the effects of the economic climate too. But just because an alternative industrial experiment works it is no reason to look too closely at what faults it may have, unless you are a worker and have a vote and share in the company.

  • CanSpeccy

    “Do you have definitive proof or are you just guessing?”
    .
    Like you, I have enjoyed much of Vidal’s prose. However, in his memoir, written at a time of some apparent mental decline, he let it be known that he had it on good authority that it was the Mafia that hit JFK. That seems an absurd claim and most likely a piece of intentional misdirection in view of the admitted cover up by the Warren Commission, the relation between Oswald and FBI- and CIA-connected individuals such as de Morenschildt (spelling?), a friend of George H. W. Bush, his role in the phony Fair Play for Cuba movement, his double defection — to the USSR and back to the US, the testimony of John Connolly who was hit by one of the bullets fired in the direction of JFK, the house committee on assassinations report, and much, much more. (but see Peter Dale Scott today: The Doomsday Project and Deep Events: JFK, Watergate, Iran-Contra, and 9/11)

    Off for a pint seems like a good idea. But it’s only 2.00 PM here. Still, I will be off.

  • CanSpeccy

    But, John, I have no objection to co-ops provided they can hack it within a competitive free market system. I’m just dead against the denial of freedom in the economic domain, provided that freedom is within a framework of laws that maintain competition, prevent inhumane exploitation of workers, punish the corrupt application of political influence for economic gain, and force everyone to cover the external costs of their activities. These conditions are not met now, but achieving an economic system within such a framework of laws seems to me the best hope for a free, creative, and prosperous society. But anything else that is compatible with such an arrangement, is fine with me.
    .
    Co-ops initiated by very smart highly committed individuals probably work very well — for a time. But they tend to become seedy and inefficient, like the British Coop stores which at one time accounted for 10% of national retail trade, but then just faded away.

  • glenn

    CanSpeccy says, “I never did get a clear message from the Occupy people as to what they wanted. They should have created a manifesto.”
    .
    That’s precisely why there is no leader and no manifesto – put forward, it would be have the corporate media all over it like a cheap suit. There are already outfits offering to dish the dirt on anyone who can be identified as a labour, to smear them off the stage.
    .
    It’s pretty obvious what they want – the 1% have had their noses in the trough for long enough, and government has to stop coddling them.

  • wall of controversy

    Okay then, let me put it another way – “the free market” is an illusion and always was, and the reason is straightforward. It is that money correlates to power. Thus, simply having more money automatically gives you an unfair competitive advantage in any market, and so any essentially free market system will inevitably create and sustain a vast gulf between the richest and the poorest in a society. Not only in terms of personal wealth but also in terms of political influence.

    Smith wrote (as CanSpeccy quotes): “They [the rich] are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.” But it simply isn’t true – wealth doesn’t trickle down in this way and never has done. There is no such thing as any “invisible hand” and Smith’s just clutching at “invisible straws”.

    “Adam Smith was a giant” perhaps, but then so was Newton – the difference being however that Newton’s ideas, although still very useful, have nevertheless been superseded by better ones. Smith economic ideas are about solving ‘the economic problem’, which is not the problem we face any more. In fact simply producing more and more stuff just for the sake of it is really the last thing we need. Instead what’s required is some way of stopping one set of people (the rich) from crushing the rest of us – simply relying on the free market will achieve only the reverse.

  • John Goss

    Giles, I voted for Tony Blair – once. Forgive me. Forgive Craig. Or have you never done anything you regretted?

  • Camelotty

    I’d love to see someone fund opinion polls to find out what people generally think about equality and inequality in the workplace. About 30/ 40 years ago I vaguely remember a survey which showed that there was a real and remarkable consensus among the population as to what the pay differentials should be in a workplace.

  • giles

    John Goss,

    I would place Murray’s cheer-leading for the lib dems in the same category as those who initially supported the Iraq War (vociferously), but later decided it was a bad idea: a serious lack of judgment, worthy of a ten-year-old. We’ve all made mistakes politically, but few as serious as trying to persuade people to vote lib dem. My greatest mistake was thinking about voting lib dem – thankfully an idea that was arrested early on. Frankly, Craig ought to have known better, but I remain an interested reader and will give him the benefit of the doubt.

  • Jives

    @ Giles

    “You will never live down the fact that you implored everyone to vote lib dem, Craig Murray.”

    Aint you ever fucked somebody with the best intentions but it never panned out?

    Stop being so postscriptive.

  • K.R.

    Well, we already have this in Poland. All public sector jobs, including ministers, are paid hardly anything above minimum national wage.

    And that can also explain why Poland fares so badly on the corruption perception index…

    😉

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