Why I’m opposed to a maximum wage
It masquerades as progressive, but the campaign to cap big bonuses is really a moralistic critique of ambition.
‘The High Pay Commission.’ ‘A national maximum wage.’
These might sound like wannabe-Orwellianisms from a crude satire of the twentieth-century Labour Party, but they’re not. They are actually components of a bona fide campaign to clamp down on the UK’s super rich, coordinated by ‘democratic-left pressure group’ Compass and supported by, amongst others, Labour’s great red hope, MP Jon Cruddas, the general secretary of the Trades Union Congress, Brendan Barber, and possibly the only UK politician to have gained in credibility because of the recession, Liberal Democrat shadow chancellor Vince Cable.
In the words of the launch statement for the campaign, the point of the commission would be to curb ‘excessive… banking and executive remuneration packages’ (1). It’s not difficult to see from where the campaign is drawing its resentful inspiration. From the millions handed out to Fred Goodwin for overseeing the collapse of the Royal Bank of Scotland, to stories more recently of £4billion worth of bonuses paid out in the much-maligned financial sector, it does seem as if there are plenty of people doing very well out of failure. And understandably, much of the general public dislikes this fact. Such ‘reward without merit’, as Cable puts it, does ‘cause offence’ (2).
To compound such anger, there are also the numerous tax-dodging millionaires, multi-board-sitting directors and superstar execs with rockstar salaries. As the Compass statement points out, an employee working 40 hours a week on the minimum wage would have to work 226 years to receive the same remuneration as a FTSE 100 CEO does in a single year. Barber is clear: ‘The government can no longer afford to ignore this.’ (3)
And yet, the desire to curb pay is a pretty perplexing demand. While disputes over wages – shaped by powerful, often competing trade unions and their political wing, the Labour Party – were a defining feature of British political life during the twentieth century, the aim, generally speaking, was to increase wages, not limit them. The ‘winter of discontent’ in 1978-79, a wave of strike action that brought Britain to a standstill, was prompted by the refusal of the unions to accede to the then Labour government’s plan to introduce a wage cap. Yet now we have the curious spectacle of leading trade unionists, Labour left-wingers and a Lib Dem luminary actively campaigning for just that: a limit on how much certain people can earn. For those in search of a new political raison d’être, overpaid, it seems, is the new underpaid.
Of course it’s the undeserving rich who are the ostensible target here, not workers. Indeed, those at the forefront of the campaign actively see themselves on the side of poorly paid, hence the deliberate attempt to frame the campaign’s proposals in terms of New Labour’s Low Pay Commission, the body responsible for instigating the national minimum wage in 1998. So convinced is one campaign supporter of the rightness of the National Minimum Wage that he writes: ‘Now even the Tories would not dare touch it.’ (4) To those supporting calls for a High Pay Commission, it is just the next, correct step on from the Low Pay Commission. History, apparently, will show that those who doubted the wisdom of the maximum wage were as wrong-headed as those who doubted the installation of a minimum wage.
What this army of the anti-affluent seems to forget, however, is that a minimum wage is not an unambiguously progressive thing. If anything, it turned what was always a potentially political conflict between workers, unions and employers into an issue of state accountancy. And in doing so, it turned a poor wage into an acceptable wage, if not for the political class themselves, then for those in whose name they spoke.
But there is something still more regressive about the new anti-high pay campaign. Although it appears to be taking a shot at the easy target of the fat cat, the impulse behind the campaign is born of a criticism of society in general. ‘The crisis we find ourselves in is one significantly caused by greed’, says the campaign statement (5). What we have here is not an economic critique, but a moral one. The problem identified is principally one of immoral behaviour, of greed, of wanting more for its own sake. A moral criticism such as this transforms the significance of its apparent targets. CEOs on exorbitant salaries, bankers with astronomical bonuses: they are criticised not in terms of their economic role, but as symbols of a society wide pathology: greed.
Masquerading as an assault on the super-rich, the real target is the potential proclivities of everybody. As Compass says of the campaign: ‘We can’t all ride first class, the planet cannot sustain this level of consumption; to pretend otherwise is dishonest.’ (6) That is, for everyday people to aspire to the same living standards as the rich is both impractical and immoral. It is greed, a species of base materialism, that is the problem; well-paid execs, bankers, directors and so on simply serve as convenient symbols.
This attempt to put a limit on earnings, or better still to stigmatise the pursuit of wealth, simply serves to inhibit an aspiration to better oneself in general. This is no attempt to go beyond reckless, business-as-usual capitalism, as Barber claims; it simply serves to reconcile people to wrecked, little-business-at-all capitalism. Rather than see the lack of genuine wealth creation as the problem, this ragged assortment of progressives seems content to fiddle around on the margins of wealth distribution.
Tim Black is senior writer at spiked.
Previously on spiked
Brendan O’Neill explained that the attack on Fred Goodwin’s home was the result of an elite blame game. Rob Lyons looked at the cynical witch-hunting of Fred Goodwin. Daniel Ben-Ami argued that blaming bankers glosses over long-term economic decline. Tim Black praised London Underground workers for demanding more and attacked those who wanted to scapegoat the spivs. Or read more at spiked issues Economy or Financial crisis.
(1) Compass launch campaign for a High Pay Commission, Compass, 17 August 2009
(2) The rich must be reined in, Guardian, 16 August 2009
(3) Compass launch campaign for a High Pay Commission, Compass, 17 August 2009
(4) An end to dizzying pay, New Statesman, 18 August 2009
(5) Compass launch campaign for a High Pay Commission, Compass, 17 August 2009
(6) Compass points the progressive way, argues Neal Lawson, Compass, 22 August 2009