Much too little thought is given to fundamental ways of fixing society’s most pressing problem, which is massive inequality of wealth. Banking regulation is an important part of the problem. But to attack the root cause of corporatism, you need to look at the make-up of corporations.
Two simple measures can make a radical improvement. The first is share ownership by workers. This appears to have gone completely out of political discussion.
Whatever the legal basis of a company – private, public limited, partnership etc – a substantial share in it should be given to all those who work in it and actually create the wealth. This share should come with full voting and distribution rights. I would advocate that 40% of the ownership of every company should be given to those who work in it. The distribution of that 40% should be adjusted annually according to the number of man hours put in, on the basis that everyone’s man hours are equal. Retired and ex-employees would retain rights until death, with all hours ever worked in that company included.
Thus if Jane were one of four people working in a start-up and they all worked equal hours, after one year she would own ten percent of the company. If the next year four more staff joined, and they all continued to work the same hours, Jane’s share would fall but she would still own more than those who joined later. If eventually there were thousands of staff, her percentage would become very small, but of a very large company, and she would still own significantly more than people who had put in far less accumulated hours over the years. On retirement, in addition to her pension, she would still own a share in the company, but this would diminish as other people built up their own contribution to the enterprise.
It would make no difference if Jane were the cleaner or the MD, and if she owned or not other kinds of non-worker shares in the company,
The other major difficulty in society’s relationship to remuneration is the ludicrous over-valuation of “management” work. The gulf in salary and remuneration between higher and lower paid employees of a company has grown enormously in the last thirty years. This is an easy fix. There should be a limit on the multiple of total remuneration (including all benefits) between the highest and lowest paid person in a single company or other body, including government department, agency or authority. I should suggest a multiple of six as appropriate. So if the cleaner is on £18,000, the CEO can get no more than £108,000.
This measure would solve the low wage problem overnight, as the CEO’s prime drive becomes increasing the cleaner’s remuneration. Attempts to evade (ie management by separate consultancy company) should be a criminal offence.