Many in business deny that there is any morality in taxation.
They go further: they claim there is no morality in markets. They quote Adam Smith and his invisible hand in support of their contention not realising that his 'Wealth of Nations' in which this idea made a very small appearance was itself but a footnote to his more important 'Theory of Moral Sentiments'. In other words they are wrong.
The Living Wage Commission, founded by Compass under the leadership of Neal Lawson, and funded by the Joseph Rowntree Charitable Trust who also fund part of my work, challenges this perception that there is no morality in markets. It is quite clear that low pay cannot be morally justified, most especially when it is used to help generate large profits that are little taxed and are used to fuel inequality.
I warmly welcome this Commission. And I cannot say better than the Observer did this morning in an editorial on the issue:
There are strong economic reasons for a living wage. And there are even stronger moral ones. It is unjust that workers at the bottom of this country's pay scale suffer so egregiously while executives, CEOs and shareholders help themselves to a disproportionate share of the spoils.
These spoils are often built on the back of the lowest paid workers. This is unjust and unfair. And, ultimately, that unfairness will build tensions and frictions that will become unbearable. A strong and healthy society is one where everyone feels appreciated and fairly remunerated. A living wage would benefit us all in creating a stronger and happier nation.
I wish the Commission well in its essential work.
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Unfortunately the government are unlikely to do anything about the commission’s conclusions.
For the neo-liberals to use Smith’s phrase, the ‘invisible hand is the ultimate in fraudulence and hypocrisy. It is well known that their ‘hand’ is far from invisible and that prices are controlled by ‘wash trading’ and similar activities. If a truly invisible hand were at work we might well have proper price discovery and affordable rents. Smith would have been aghast at what we have at present.
Michael Hudson sum’s up the appropriation of Smith by the neo-libs:
Adam Smith (1723-90): Campaigner against public debts and the wars that gave birth to the taxes to carry their interest charges. In a typical if bitter irony of history, Smith’s opposition to war taxes has led neoliberal economists to appropriate him as the patron saint of free markets. Yet he accused landlords of reaping where they had not sown, and business men of forming predatory schemes wherever they were able. The moral is that if one is to select a patron saint, it is wise to co-opt a well-known icon so as to forestall opponents from citing his authority. (He criticized Dutch finance and applied the term Invisible Hand to the workings of laissez faire.)
See: http://michael-hudson.com/2013/07/the-insiders-economicdictionary-part-a/
Quite so
I would not want to see living wage drown out demands for a much higher enforceable minimum wage. We should support a higher NMW.
A voluntary living wage is a campaign, and worse than useless as a policy for Government. (“Please can we have living wage, Mr Employer?”, “No, I’d rather buy another mansion; what are you going to do about it?” “errr…”)
However there will be a point when NMW raises will provoke whining from small businesses (crying wolf long before there might be any truth) about job losses that will make further increases too politically courageous.
There is scope here for an enforceable living wage. One applying to the public sector would need to cover sub-contractors and privatisers as well or else it could lead to even more workers being sold down the river.
The proposals in Washington DC for a compulsory living wage to be paid by the biggest retailers are intriguing.
I would suggest that there should also be a statutory, enforceable living wage for all labour providers. They charge the end user of labour over £10 per hour for workers paid £6.19 per hour already. The answer then for the business threatening job losses is that they could consider taking responsibility for their own workforce rather than relying on a gangmaster to exploit them on their behalf
Agreed
I want this to be about statutory action
“They quote Adam Smith and his invisible hand in support of their contention not realising that his ‘Wealth of Nations’ in which this idea made a very small appearance ”
Indeed, the only mention of “invisible hand” in WoN is talking about how people will still invest domestically, at least some of them will, even if capital is entirely mobile and foreign profits are higher than domestic. The modern implication of which is that at least some of the incidence of corporate taxation will be upon domestic shareholders.
But not all of it because it is only some who will still invest domestically…..
Respectfully Tim – to claim that’s an argument is, to put it nicely, mildly absurd