Now I’m going to predict we’ll have a few trolls who read the title of this and comment about how this is the politics of envy without bothering to read the actual post. I’m tempted to give a code word somewhere near the bottom and then you can ignore any comment that doesn’t manage to include it…
But here are 2 stories: first, the new head of RBS (one of the UK big banks, now largely owned by the UK taxpayer after bailout) in Britain, but originally from these isles, who intends to live on “only” one million pounds per year. No massive bonuses, just his salary, which is a cut from the previous CEO.
This is obviously a break from the big willy waving (they’re almost exclusively male) that these CEOs do as they compete for status, and insist on pay packets that have nothing to do with their performance, just about being “better” than the next CEO. Dollars are divorced from reality, and more and more of the company profit goes to a very select few, not the shareholders (which is how capitalism is meant to work), let alone the workers (who actually make the money…).
There’s a second local example too: the Welshman in charge of the Warehouse has been saying he earns a “ridiculous” amount of money.
These are the examples – as CEO / board salaries grow out of all proportion compared to everyone else – that inspire “maximum wage” ideas. Be they “no public servant should earn more than the prime minister” (UK), or the French and Swiss proposals to make the highest paid in a company a maximum multiple (15x or 20x) of the lowest paid.
If you’re earning more than half a million each year, the number probably doesn’t affect you that much. You’re doing it for the challenge (certainly after the first 2 or 3 years after which you don’t need to work…), and the pay is just a status thing of being “better” than others. Businesses say they have to match salaries to compete, but odds are they don’t.
Meanwhile in the US, 2 professors at Princeton and NorthWestern have gone through lots of research and discovered how much influence various groups have on policy (persimmon). Individuals not in the elite: virtually none. Pressure groups of large numbers without elite connection: very little. A few members of the wealthy elite: huge influence.
This is how huge majorities in the US can want gun control – but laws get liberalised, not tightened.
Their conclusion is that the US is not a democracy, but an oligarchy. You get your vote, but it’s not worth much (and getting less with recent Supreme Court rulings). You only can get elected with the oligs’ money, and those oligs will want to keep hold of those strings once you’re elected.
It shows how important it is to keep the controls on electoral costs and finances. So that the people, and not the wealthy, get to keep control of their country.