One of the themes that came up at the talk I gave in Hebden Bridge last night was pay rates, and in particular pay differentials.
The opinion was quite firmly expressed by some in the audience that high pay needs to be addressed. What was clear was that high pay was considered to be what many in the South East think of as middle incomes.
I admit I do not have problems with senior public servants being fairly rewarded, although I do have major problems with council chief executives and others being paid a great deal more than cabinet ministers. I agree that issue needs to be addressed, and the tax system could be used to suppress market rates of pay at the higher end.
One way to do that is to make employer's NIC progressive i.e. the rate increases with pay. Over £100,000 rates could increase, significantly, for example. The cost of high pay would be increased.
Another way would be to remove corporation tax relief on the payment of salaries above a fixed level. I have long suggested that no tax relief should be given on a salary payment over around £250,000 a year, which is about ten times median pay.
But I also think it vital action also be focussed at the lower end of pay scales because change is really needed there. The living wage is not high enough. And it is not mandatory. Britain really does need a pay rise - as the unions have been saying for a long time. It would have the curious and welcome benefit of reducing many social security claims as well.
So action is needed - but across the board, and not just at one end. And I do think we would be a wealthier society if we took such action. Including at the top end of income earning. The truth is that there pay is all about status and not worth. And status envy is really destructive for all engaged in it. Those who raised the questions were not. They were looking for justice.
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Addressing the problems of low pay on the one hand and extraordinary remuneration at the other is a gulf almost impossible to bridge, I’ve found. The knee-jerk reaction of ‘politics of envy’ is immediately trotted out in one discussion and in the other the, largely spurious, canard of ‘lack of skills’ is rolled out.
That’s why I’ve become more interested in ways to tie them together and strengthen the link that exists between top and bottom by using pay ratios. They can be a remarkably flexible way of reinforcing the basic interconnection of the boardroom and the front line so long as total remuneration is taken into account.
There are some useful introductions to the topic around;
http://www.ethicalconsumer.org/commentanalysis/ethicaleconomics/payratios.aspx
http://www.equalitytrust.org.uk/news/why-pay-ratios-are-key-tackling-uk-inequality-five-things-worth-knowing
There is some sound research on the benefits;
http://www.equalitytrust.org.uk/sites/default/files/A%20Third%20Of%20A%20Percent_0.pdf
http://www.epi.org/publication/ceo-pay-231-times-greater-average-worker/
http://www.timeshighereducation.co.uk/news/pay-ratios-point-to-massive-inequality/2008207.article
The topic is rising up the list of items to be addressed;
http://www.busman.qmul.ac.uk/newsandevents/events/items/119437.html
http://blogs.law.harvard.edu/corpgov/2011/08/11/why-ceo-to-worker-pay-ratios-matter-to-investors/
http://fas.org/sgp/crs/misc/R43262.pdf
http://www.neweconomics.org/publications/entry/the-ratio
And there are some practical initiatives aiming to use the research;
http://www.washingtonpost.com/business/economy/sec-narrowly-votes-to-require-firms-to-disclose-ceo-pay-ratios/2013/09/18/a2a4aab8-2078-11e3-b7d1-7153ad47b549_story.html
http://www.paycompare.org.uk/
http://toomuchonline.org/defining-a-bold-new-standard-for-fair-pay/
http://www.cbc.ca/news/business/small-businesses-try-out-wagemark-certification-dianne-buckner-1.1861113
Many thanks
Thank you for this AllanW – very interesting and reasonable.
I’ve been thinking about this topic a lot recently and have started to think in terms of the return of incomes policy – this was a tool that was used a lot in the UK in the 1960s and 1970s to restrain wages in the face of rising inflation. It strikes me that what the economy currently needs is the reverse – statutory *increases* in wages, particularly in the lower half of the income distribution, in the face of incipient *deflation*. Whether this is workable or not I’m not sure. But I would like to do some research after the election on this.
Agreed Howard
Worth looking at
Your proposals would not, of course, affect those employed by the Government which does not need corporation tax relief and where employers’ NIC is simply moving money from one part of government to another.
Charities also do not need CT relief. They would be less affected.
Partnerships, LLPs and the self-employed would be unaffected. Someone running a hugely successful business, creating jobs and boosting the economy decides to incorporate and suddenly it is ‘justice’ that his wages must be ‘suppressed’?
As often with your proposals, your tinkering would create a complicated and distorted market where tax planning would be encouraged and the UK a less attractive and more expensive place to employ people.
It is not ‘justice’ that success must be punished. It is pandering to ‘fat cat envy’ where every ‘bash the rich’ tax proposal is greeted with a chorus of braying approval.
This is not success being punished
It is rent seeking andxploitation being considered unsuitable for state aid
Anyone committed to proper markets should welcome that
Monopoly rent seeking abuse is anti-market activity
You are just trotting out phrases like some sixth former who discovered Marxism a few weeks ago!
‘Not’ imposing penal taxes is now redefined as ‘state aid’!
It is not a ‘proper market’ if is distorted and I clearly showed the distortion between public sector, charities, the self-employed and those employed in private industry. You failed to answer any of those issues.
And you are seeking to redefine ‘rent seeking’ as “anyone in a job I don’t like earning a salary I don’t approve of”. Tidjane Thiam guides a succesful business and is rewarded for doing so, a Premier League footballer helps his team win a trophy and is rewarded for doings so but this is ‘rent seeking’. GPs get more money for doing the same job and this is OK because your wife is/was a GP. Trade Union leaders get 10 or 20 times the salary of their members and this is fine because they give you grants.
Do you have an argument?
Or just prejudice?
As one other poster has mentioned, I don’t see how allowing someone to only pay tax at 45% can possibly be classed as “State aid”? Unless you think all money belongs to the State and it allows you to keep some via the “Aid” of not charging you 100% tax.
Subsidising their excessive pay with tax relief is what I was referring to
It jas nothing to do with their personal tax rate, which would still be due
I have arguments that you have simply ignored. Anyone following this conversation will see that.
You began using the term ‘rent seeking’ only a few months back, I guess you must have stumbled upon it somewhere, however you apply the term ‘rent seeking’ wholly inappropriately and do not really understand the concept.
You just apply the term to any job or wage you don’t like and ignore similar situations where the individual has your sympathy.
You talk of wanting ‘proper markets’ yet want changes to the tax system that would distort markets for the reasons I have set out and which you have not dealt with.
Over a long time I have dealt with the issues you raise
And I have been referring to rent seeking for many years
Youy just haven’t been here to notice
Alan “a more expensive place to employ people”
I saw this in the Independent yesterday. It would seem we could be more expensive and still be ‘competitive’ -according to this.
http://i100.independent.co.uk/article/this-is-how-much-it-costs-to-hire-a-worker-across-europe–xkF5UnqnCe
I don’t tend to envy people who earn more than me especially if I know that they earned it. In fact I tend to admire such people – so this is not about jealousy for me, it is about proportion but also tangibles – what value does the manager bring?
When you consider that in the finance sector, many of the those highly paid CEO’s ran their companies into the ground (think of Lehmans and others) you have to ask if the pay contributed to the excessive risk taking – it did and will again.
Far too much emphasis is placed on the value of management yet there is loads of evidence to suggest that high pay distorts human behaviour and perspectives and actually leads to poorer performance.
Most of the high pay is to remind bosses that they work for the stock holders – not for the staff or company or even the customers – but for those who want a return and if that means pauperising the staff and leaving customers to hang about on phones to ‘self-serve’ – so what?
High pay is a bribe to managers to produce a crap service and a poorly motivated and under-valued work force. The latter is tragedy because most of the value added work is actually in the delivery of any service to the customer – and this is where a firm’s competitive edge and USP often lies – yet as I say it is commonly undervalued in today’s race to the bottom in order to compete for shareholder funds.
NI paid by government departments is simply a money merry go round though it does impact on the department. They have a budget and an increase in NI to be paid means a decrease elsewhere to stay within budget.
This failure to see beyond the money merry go round and Departmental focus on their single budget leads to all sorts of crazy scenarios within government. It becomes ‘sensible’ at the departmental level to maximise your budget by pursuing tax minimisation strategies as regards personnel and procurement etc.
As an international example of such practice, the Dutch state owned railway has recently faced heavy criticism for using Irish financing arrangements to avoid paying taxes of around €200m. I am sure many such examples also exist in the UK.
They do
But it has remarkably little to do with the issue under discussion here on which steps have been taken to prevent abuse
How much should Tidjane Thiam be paid? Is it right that he is rewarded generously for the very substantial improvement in the business performance of Prudential while he was CEO? Shareholders seem to think he is responsible for their shares increasing in value much faster than the market, and they collectively lost about £1 billion when the price dipped after the news of his departure broke. Credit Suisse hope he can do a similar thing for them. Is he worth it?
A) he is not worth it – I guarantee that
B) I am not suggesting pay caps
Talking of high pay, I see that the person in charge of restructuring the Co-op is being paid £3.4 million. This involves closing branches and making lots of people unemployed.
I ask you, just how much skill is needed to close branches? Can’t this be done ‘in house’? I refuse to believe that this can’t be done without the ridiculous pay package that they are paying this man.
On another point, I have always wondered why those over £88,000 only pay 2% NIC’s while everybody else pays around 12%
Is there a good reason for this? I do not see any.
I see no reason for the reduced NIC rate either
I don’t agree with you on point A. He has done a tremendous amount for the share holders of the Pru. He is an asset for the UK business community which we have now lost. He wasn’t the highest paid person at that company.
But did he earn that much? I repeat the points I have made to another commentator
You seem to have a remarkable belief in your certainty of what people are worth.
How much should Thiam have been paid then as CEO of Prudential? Not asking for an exact number, a ballpark figure will do.
A couple of hundred thousand or so
Little more
Tell me why he earned more
Not because he could
But the economic justification
And don’t claim market rates. There is no such market
Andrew -you speak as if these people do it ON THEIR OWN. There are often hugely supportive mechanisms around them. Remember Bob Diamond-he didn’t seem to know what was going on around him! Vast reward is based on a myth that people do it alone.
Shareholders controlling an economy to the extent that they do now is manifestly undemocratic given that about 15% of the UK population are share holders (2009 figure).
Precisely
The myth of the employed genius is just that – a myth
“The myth of the employed genius is just that — a myth”
You have clearly never watched Lionel Messi play football.
I have
And he is not worth what he is paid which exploits millions of people
Lots more people are shareholders via their pensions.
Agreed
So?
Why should they be exploited by those abusing their companies?
This argument amuses me, the inherent contradiction is just great!
When a company with a high paid CEO does badly then he is to blame alone and why should he be paid millions?…..he does not deserve it!
However when a company with a high paid CEO does well then it is due to the workforce alone, he is irrelevant and the success is down to the workers…..therefore why should he be paid millions etc!
Talk about have your cake and eat it….
No one made that argument
You made it up
Like all the nonsense you post here
Alan-the pay of footballers is a deliberate asset bubble which is still being forced up and manipulated in order to make otherwise insolvent clubs look viable…it is a form of financial engineering. If you think the market is free you have been living in a dense cloud cuckoo land for the last 35 years.
@Alan – how many goals would Lionel Messi score surrounded by colleagues who earn 60 times less than him ? You could not have picked a worse example to make your point if you tried. You can add football, as well social justice to the list of things you don’t understand. And yes, he is overpaid, as are most elite footballers.
Also, seeing as you brought up football, shall we talk about Rule 34 ? Football is a prime example of the rent seekers paradise. Shall we talk about ticket prices ? Shall we talk about having supporters make a 600 mile round trip on a Monday night because the sport has sold its soul to the devil (television) ? Who benefits from this, because it isn’t the ordinary supporter anymore and that’s just the way the Premier League and the club owners like it.
Well said Jeff
Neat
“how many goals would Lionel Messi score surrounded by colleagues who earn 60 times less than him ? …
Football is a prime example of the rent seekers paradise. Shall we talk about ticket prices ? Shall we talk about having supporters make a 600 mile round trip on a Monday night because the sport has sold its soul to the devil (television) ? Who benefits from this, because it isn’t the ordinary supporter anymore and that’s just the way the Premier League and the club owners like it.”
Football is clearly a team sport, but some players are demonstrably more capable than others. A more capable players is going to be in a better position to command a higher salary than his less able team-mate, and the greater the differential in ability, the greater the differential in remuneration. This seems to me a statement of the blindingly obvious. Barcelona don’t pay him a euro more than they have to. If they could they would reduce the amount paid to him (but he would simply move elsewhere I imagine).
Ticket prices are high because that’s what people are prepared to pay for tickets. No is one forcing people to go to football matches. Similarly, people aren’t being rounded up and marched into making 600 mile round trips. They do it because they value the spectacle of football highly. In the Premier League, they are seeing the world’s best players. Seeing the skill involved at the top level of any art or sport is often enthralling and breath-taking, so paying £80 to see 22 of the greatest footballers on the planet playing at their peak is probably a bargain.
There’s only one problem with all of this – which is that it is seeking to exploit the rent from TV franchises that has created this situation
And it is there that all your argument falls down
@Jeff
Football supporters are perfectly free to not go to games and to not buy TV subscriptions. They could go to the local park and watch a Sunday league amatuer game instead. some freely choose to do so. When some fans of Manchester United were disgruntled with the Glassier’s ownership of that club they stopped following them and formed United FC. This they freely did of their own free will and were free to do so.
If people stopped watching and going, the money would dry up so where then is the ‘ransom’ element required in rent seeking?
Football supporters enjoy their support and following of their clubs, the joy and agony of winning and losing. The TV companies make money. Even the premier league has returned to profit this year. So how can you claim that the footballers are adding nothing (as is required of rent seeking)?
(This is unlike the river travellers in the example of actual rent seeking I gave elsewhere in this debate. The river travellers HAVE to use the river, the landowner adds nothing to a journey that could be undertaken in exactly the same way if the landowener did not charge, so he has added nothing).
Lionel Messi is free to seek employment with any football club and Barcelona are free to seek to employ any footballer in the world.
Messi is surrounded by talented players who Barcelona have freely contracted and who were free to contract with any club.
Barcelona, incidently, is owned by its fans. You cannot buy shares in Barcelona only membership of the club and there are 150,000+ members. The club’s highest authority is an assembly of delegates.
That’s a collective of fans freely arranging the affairs of the club which operates in a free market.
See how many times I (deliberately) used the word free above? It’s not rent seeking. You talking a load of nonsense in support of Richard’s misunderstanding of the term doesn’t change that.
Richard is just trying to hijack another term and turn the concept of rent seeking into ‘anyone getting paid more than I think they should be’.
No, Richard is using the term entirely appropriately because the excess payments relate to rent seeking in football franchise markets
If we believe that great footballers like Messi are born, not made (in the sense that genetics plays a v large role in whether someone is a top-class footballer or not) then Messi is largely where he is because he is a lottery winner ( the genetic lottery) – not through his own efforts. That’s not to say that a lot of practice, training etc isn’t required as well, but essentially at that level you’ve either got a special genetic talent or you haven’t. The conclusion I draw from that is that football talent is largely a windfall gain and should accordingly be taxed very heavily. Plus, Richard’s contention about rent-seeking in the football industry is correct – a large slice of its income comes from TV rights and TV is an oligopoly dominated by a few big companies. Plus, football clubs themselves don’t conform to the textbook competitive model because fans mainly sprint shop around – if I’m a Spurs fan I’m not going to start buying tickets for Arsenal instead just because Arsenal’s ticket price is £5 less than Spurs. And yet that is the kind of price-sensitive behaviour that would be required to make football approximate a competitive market. As it is an imperfectly competitive market then there is huge scope for rent seeking (as Richard has pointed out). It makes me laugh when commentators come onto this blog accusing Richard of being economically illiterate and then proceed to make basic economic errors themselves. Hoist by their own petards!
Thanks Howard
That should be “fans mainly don’t shop around” not “fans mainly sprint shop around”. Bloody ipad!
Similarly, great authors are more likely than not born rather than made and also a good chunk of the income arises from a few publishing houses and film production companies buying the movie rights. Personally I don’t see either activity to be rent seeking, but just trying to see a consistent approach adopted.
In light of your post earlier today about posts only being allowed if they develop the themes you are trying to promote, I hope you don’t see this as contrary to that message. However, as someone who agrees with some of what you put forward in respect of tax policies but not all, I feel that from time to time it is healthy to have posts that challenge your statements as long as they are not seeking to be offensive.
It always amuses me to see the right-wing neoliberals engaged in prolific doublespeak when defending the status quo.
According to them, it is important that:
1)CEOs are paid millions to ensure that they remain in the business to help maximise profits
2)Everyone else must be paid as little as possible to ensure they help the business maximise profits.
Any suggestion of reducing excessive executive pay is met with arguments that they would leave the company/country, which must be avoided, just as any suggestion that other employees should be paid a fair wage is met with arguments that it would cause mass redundancies!
doesn’t anyone who works deserve, in a developed Rich economy like ours the chance to have a life where they could have a roof over their heads and bring a child of theirs into the world. What planet do the right live on, not everyone can succeed and even if everyone could we would still need people to do mundane jobs, and don’t those that do deserve the basics life can offer
I haven’t read all your article, yet. Its been a busy morning.
However I agree and am pleased you have noticed that CEOS of councils are very well paid. I think too much. With services been cut, yet their pay goes up.
Really why?? Its a public service role with no sales. I can see how some normal companies are selling to people and they are sometimes rewarded with success.
Does a council CEO need to be an Aston Martin driver. All they seem to need to be are accountants.
Services down pay up. Its not fair to society especially with pay caps to the needy.
I feel this is different to a company whilst we choose to pay services we cant choose which council to pay or provide our services.
Sorry this is one of the things that upsets me. The same with non doms.
I agree. We have a CEO and several senior executives in my local authority who earn more than the prime minister, that should never be.
I like the idea of pay ratios, whereby the most senior individuals pay cannot be more than a ratio of say 10:1 higher than the most low paid member of staff and every time the senior executive gets a pay rise, those at the bottom of the scale get one of equal proportion too automatically.
I would tolerate more than 10:1
But beyond 20: 1 I have real issues
“I would tolerate more than 10:1
But beyond 20: 1 I have real issues”
So if J K Rowling set up a company to publish her books and employed herself and a cleaner, which would you expect, the author to be paid a tiny fraction of the worth she was adding to the company or the cleaner to be paid hundreds of times the market rate?
She would be p[aid a dividend based on her entrepreneurial activity to reflect the massive risks she took
The paid employees of large companies are clueless as to what that means
“She would be paid a dividend based on her entrepreneurial activity to reflect the massive risks she took”
The returns she gets from her books appear to me to be pure income (as opposed to being in the nature of dividends/gains etc). What massive risks did she take? Being an author involves putting up literally no risk capital at all – all you need is a computer.
As far as I am aware she started out with virtually nothing. She had nothing to lose.
So time has no value?
Just out of interest, do you consider JK Rowling to be a rent seeker?
I have explained why not
There appears some issue over the man at the Pru. An investment company that has done better than the coop.
His basic salary of £1.06m. In Mr Thiam’s final year at the Pru he earned £2.12m as an annual bonus, £8.25m in vested share awards and £265,000 in pension payments.
So his basic was just £1m. His performance in share price and targets set earned him a bonus.
And you think the bonus was ‘really tough’ do you?
And did he make it simply by his business handling a great deal of money, of which he raked off a bit?
That’s how the rentier economy works
Smell the coffee and stop pretending you’re pro- market when you’re defending market abuse
You still don’t get ‘rent seeking’ do you?
It’s when an individual exploits an advantage in a market to profit without adding to the entity from which it profits.
The classic example being a landowner charging a fee for river traffic through his/her land. They add nothing to the river traffic but profit from it.
Lionel Messi and Tidjane Thiam have done no exploiting as their contracts have been agreed in a free market. Neither The Pru nor Barcelonia have been held to ransom as have the river travellers. Both The Pru and Barcelona belief they have benefited.
As regards Messi it is only you who believes he is exploiting millions of people. The idea is laughable. No one is forced to pay his wages or to pay to sponsor him or to pay to watch him.
This is another economic principle you just don’t understand.
I assure you, quite a lot of academic economists do seem to think I have a very good grasp of it
But they’re dedicated to stopping the abuse of it as well
And you seem very keen on that abuse
Alan is right. Messi and Thiam are not rent seeking in economic terms, and nor are the companies they work for. They have to compete in a free market for customers who can move their support to other companies.
What you, Richard, are really saying, is that you don’t like certain highly paid people, and you don’t think they add value. No proof. Which isn’t really an economic definition. I doubt any academic economists would agree with you on you definition, though some might also dislike high pay – but that’s not an economic argument, it’s a political one.
Football is a free market?
When it is funded by rent seeking franchise operators?
Oh please, pull the other one and learn something about markets and how they work
I really have difficult with you right wing Stalinists
It is pretty clear you have no idea what “rent seeking” actually means. Your definition seems to basically be “people who earn lots money who I don’t like”.
People are not forced to watch football, pay for it on TV or go to matches. If they do choose to watch football, they can support any club and they pay for the services they want. Likewise, football clubs are free to choose and pay for the players they want.
It is a free market.
Rent seeking would involve somehow forcing people to pay more, or who otherwise would not want to pay/receive the service at all to do so via a monopolistic advantage.
It’s pretty clear you don’t know the first thing about markets.
A great many economists would suggest otherwise to me
I discuss such issues with them
I am entirely happy that my suggestion that rent seeking behaviour explains almost all high pay – including in football – is right – even if you have to look at the franchise market for the rights to show it
The definition of ‘economic rent’ is any payment to a factor of production over and above the level of payment necessary to bring that factor into production.
Let’s stick with the Lionel Messi example. He earns millions of pounds a year. But how low would his pay have to be before he decided to quit football because it wasn’t economically viable for him to stay in the job? That depends on his best job offer outside football. Now let’s assume that Lionel is a football genius but average on other characteristics which might be valuable to employers. That means that his best outside offer is probably the average wage across the economy – let’s be generous and say £30,000 per year. The implication of this is that everything Messi earns above £30k per year is rent. In other words we could apply a 99% tax to all his earnings above that level and he’d still stay in the job. There is some evidence for this from the early 1960s where the Football League in England had a maximum wage – higher than average earnings at the time but still v low by modern standards. All the players in the 1966 World Cup winning England squad entered professional football when that maximum wage was in place, and presumably they were world class players (otherwise they wouldn’t have won the World Cup!) what this means is that the vast majority of payment to footballers is economic rent.
Neatly put
“Pay details of selected FTSE 100 CEOs who signed the letter, and are compelled to disclose their pay in their companies’ annual reports, are as follows”:
http://voxpoliticalonline.com/2015/04/01/why-we-should-all-ignore-that-letter-in-the-telegraph/
Let us have a moment of silence, in memory of those who may well have sent a letter of their own. Particularly the many charities forbidden by law from so doing.
Hallelujah!
In respect of the April Fool comment made by troll “Richard” at 3.49, regarding inherent contradictions – these supposed poles of the narrative are just forms of expression of the real processes involved in production’s undemocratic ownership, power and control structures. One day we’ll have democracy in politics and industry – and both will look very, very different.
“The problem is to change it…”
Can you tell me what risk JK Rowling is taking to justify a huge dividend as per your example? Sue she writes the books and makes the publisher the money, but what RISKS is she taking?
You assess the chance of this not working when she set out top write those books
It was enormous
I thought that you considered such company structures to be disguised self employment, with the payment of ddividends the being avoidance?
I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up, to have proper roots in a culture as old and magnificent as Britain’s; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles.
A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major’s Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism. On the available evidence, I suspect that it is Lord Ashcroft’s idea of being a mug.
– J.K Rowling
I was just thinking of the British Nobel Prize winners this century, and their pay. I wonder if they all would have done far better with another zero on their salaries. But perhaps, foolishly, they only cared about their work.
Maybe excess money should be thought of as an addiction. We try to discourage smokers or alcoholics, but we cheer money addicts on to greater and greater excess.
Why not consider Richard’s proposals as the equivalent of a tax on cigarettes?
I’m sure VS Naipaul, Harold Pinter (when he was alive), and Doris Lessing (when she was alive) probably wouldn’t notice if another zero was added to their net worth.
Peter Higgs won’t be short of cash either. Although not Nobel Laureates, people like Stephen Hawking and Richard Dawkins are easily multi-millionaires.
OK, you’ll say these people didn’t start out to make money, but nor I imagine did Lionel Messi. What all these people have is ability. And as I said before, the people at the very top of any field in life (art, science, sport, business) are going to be rewarded very handsomely.
And once you start advocating taxation on the basis of what you believe to be the motives of the person involved (which frankly most people know nothing about), as opposed to what the other side of the party judges them to be worth, then you’re into very awkward territory.
I am delighted there are people of real ability
The fact is most of them are not paid very well
And many who are paid very well have only mediocre ability bar that to exploit
That is my whole point
You assume pay and ability can be equated. If that was true 2008 would not have happened
Now stop wasting my time
I will feel free to delete your nonsense in future
I have known a fair number of outstanding scientists. (I once applied for the same job as a future Nobel Prize winner, neither of us got it.) They cared passionately about the funding of their research, not about their salary.
I never met an entrepreneur who worried about money either, by the way
Those who did failed
They did not have their eye on the necessary ball if money was their focus
It is patently clear that those equating the free market with football do not understand football one iota.
@Douglas – you sir are a prime example.
Believe it or not, people were going to watch football matches in much greater numbers than today way before the marketisation and commodification of the game by Sky TV and the Premier League. 99% of all football clubs do not have the worlds best players, and 90% of football matches are neither enthralling nor breathtaking. That you swallow marketing whole speaks volumes about you. The truth is the vast vast majority of supporters go to the games to support *their* team through thin and usually thinner. As Howard rightly points out, why go to Arsenal for £60 if its only £50 down the road at Spurs(or vice versa) ? Or why not just support the club who are the most successful (to maximise the return on your investment of time and money)? Why doesn’t everybody in a free market do this? It’s not ‘rational’ behaviour ! Clubs, players and agents simply exploit the system the Premier League has created. Rule 34 prevented some of these abuses but no longer. The regulation of the game is not fit for purpose (in truth it never was) – yet we still have the charade of the fit and proper person test – laughable. We’ve had owners accused (and guilty) of genocide, fraud, and much more besides. None of it seems to impede their ownership though. In that sense elite football is not analogous to a free market – its analogous to the banking sector. Unregulated, overpaid and liable to exploit the people its meant to serve (the supporters !). Rather apt that Barclays sponsors the Premier League………….
@Alan – when you’re in a hole stop digging.
To restate Howard’s point once more – football is not price sensitive. You’re reducing it to the vagaries of the free market – that it’s nothing more than a mere transaction between business and the customer who is free to seek out a better deal down the road, is the spin of your logic. Really ? A free market? Just a business? OK, how many customers of Tesco wish to have their ashes spread across the car park ? How many customers of the Prudential will be naming their sons Tidjane ? Your analogy is a nonsense.
A rent seeker called the Premier League is seeking to commodify and sell back to us at greatly increased cost what was either once affordable or free and part of the social fabric to enrich themselves and their hangers on, *that* is rent seeking.