by Stephen Tall on August 25, 2009
Catching up on what happened in British domestic politics while I was sojourning on the continent, I came across Vince Cable’s Guardian article, The rich must be reined in, in which our deputy leader advocated the establishment of a high pay commission ‘to measure the claims of top earners that their rewards are justified and necessary, even if they offend natural justice and our sense of fairness.’
It seems to have evaded the LDV Collective’s radar (tsk, I go away for two weeks, see what happens), so here’s an excerpt:
There is nothing intrinsically offensive to most people about talented inventors, entrepreneurs, performers or sports stars benefiting substantially from unique talents that enrich or protect or entertain the rest of us. Even if Bill Gates didn’t give away a lot of his fortune, most of us wouldn’t quarrel with his being a very rich man.
There are, however, two things that do cause offence: one is reward without merit, or reward for failure; the other is tax-dodging. We have plenty of both. If a £25,000-a-week footballer is lazy or useless, the crowd provides a public exercise in market-testing. Other talents are less public. That is why all high pay should be publicly declared in a way that directors’ pay already is. …
The lazy assumption that the market sets pay rates is at best only partly true of bankers whose institutions are underpinned by state guarantees, or publicly owned after collapsing. Indeed, many industries depend on public contracts. Highly paid public-sector employees are sheltered in varying degrees. We are often told that highly paid talent might emigrate, but immigration controls operate in an opposite sense. I suspect that the number of well paid dentists GPs, media executives and finance directors would shrink rapidly in a fully competitive international market.
Both Mark Littlewood at Liberal Vision and Giles Wilkes at Centre Forum’s FreeThink covered the issue here and here, with Mark’s critical article of Vince’s intervention in particular provoking a good discussion thread.