Sunday, 29 January 2012

Public Say No to Porker Capitalism

Everything has its price - capitalism eats itself!
The last week has seen executive pay high in the headlines in Britain again as we saw first the damp squib of the Con Dem government's supposed assault on overpaid corporate bosses followed by the same Government's decision to allow a bonus of nearly £1 million to be paid to Stephen Hester, the head of struggling state-owned bank, RBS. With both their report and Hester's pay, they resorted to their faux calls for responsible capitalism and for him to "do the decent thing" and hand the money back. Needless to say, there is no sign of either on the horizon.

Repeatedly, all three main parties have taken part in a mindnumbing dance of twisting and turning on executive pay. They all condemn the huge disparities in pay awards - nearly 50% increases for directors and senior managers in the FTSE 100 this last year in spite of the same bosses insistence on pay restraint among "ordinary" employees. They rail against the soaring ratios of 500:1 and higher in the top to bottom pay in some companies - a far cry from the 10 to 1 ratio seen as the "acceptable face of capitalism" back in the 1950s, not that that face showed itself quite as often as some apologists of reformist capitalism like to fondly remember.

And yet when it comes to action, they all baulk at anything effective. The furthest the Government has gone has been to propose an exceedingly modest increase in shareholder control over executive pay; but nothing on punitive taxation of bonuses; nothing on giving workers a say on the remuneration boards of big companies; nothing on squeezing down the immoral and outrageous inequalities in pay in spite of the spiralling social misery and potential disorder this is creating. In spite of their failure to pay fair or even any tax and their track record of business failure and short-sighted greed, these people, the politicians argue, are too valuable to risk them leaving Britain.

Fortunately, the public do not agree.

An opinion poll published by ICM today shows that only 7% of the public believe any executive should be paid more than £1 million. Just 1% - one per cent - of the 2,003 people surveyed agreed that the very top executives currently earning £4 million per year are worth it. Two thirds want to see workers on remuneration committees - an option ruled out last week by Business Secretary Vince Cable on the bizarre grounds that where companies have employees working overseas, it would be too difficult for them to elect representatives to sit on these bodies. Risible to say the least.

So in spite of the clear antipathy of the public to the eye watering inequalities in pay, none of the main parties offer any political action to tackle these effectively. Meanwhile, of the parties "bubbling under" in national opinion polls, only the Green Party commits itself to taking mandatory action on pay.

Three years back, I was involved in a Green Left proposal to the Green Party of England & Wales conference to set a maximum pay rate as well as the current minimum wage rate. At that time, we suggested £150,000 p.a. - roughly ten times the living wage rate. The proposal received significant support but fell short of being passed. The following year, however, the Greens adopted a policy that commits them to statutory measures to enforce a ratio of ten to one between the highest and lowest wages within any company or organisation; and the party is committed to higher tax rates for higher earners, with an emphatic endorsement of progressive taxation.

So for progressives, there is a genuine option for action on pay inequality. And as "The Spirit Level" report by Wilkinson and Pickett showed, a more equal society is one where there is much less crime, better health, stronger communities and higher levels of happiness. It also paves the way to a more sustainable fostering and use of resources at a time when many of the most basic are under increasing pressure. So everyone would benefit.

Meantime, under the Old Grey Parties, Britain remains firmly set on a course towards social disintegration. Austerity and authoritarianism are the watchwords of our gradually more and more embattled elite as it seeks to suppress rather than resolve the despair of the squeezed majority. Like the ancient Spartiate nobility in its decline, terrified by the growing resentment of its helot underclass, British capitalism is teetering over the abyss between chaotic collapse and social fascism.

Another news item today, on the BBC website, highlights that in Papua New Guinea, the price of a bride is four pigs. Checking the current price of adult saddleback pigs in Britain, the monthly pay of someone on the national minimum wage is worth less than two pigs - and of course that falls to zero when compared to the cost of the greedy porkers sitting in the boardrooms of "broken Britain."

Trickle down economics - from The ConDem Effect


  1. Adrian, surely bankers bonuses would be equal to a Gadarene swine herd, not zero. ;-)
    Amanda x

  2. Amanda, "Gaderene swine herd" - love it! With added demons!