News Reviews from 2012

Is our greed to blame?

Pay Restraint and Low Ambitions

by Simon Belt


Is society losing its historic drive to create more wealth? From Radio 4 and her Majesty's loyal opposition, to the front benches of the Conservative-Liberal government, there seems be widespread support for restraining bonus payments to top executives. It may sound radical and fair on behalf of working people, but coming alongside campaigns to increase the prices of low cost food items - the high point being demands by Ed Milliband to see W H Smith increase the prices of chocolate oranges. Giving up chocolate for lent may have been a personal test of faith once, but to impose it on ordinary people for their own good is another thing altogether. Are we all becoming too meek and mild as we approach Easter?


The renumeration of top executives is clearly a hot topic at the moment, and although it has often been a source of anger for many working people, it never usually bothered the establishment. Things have definitely changed on that front though. Over the last couple of decades, since Thatcher summed up the collapse of any opposition to the free market with the phrase There Is No Alternative, popular opposition to what could be regarded as premium reward for top executives has been muted from the mainstream left. Since the onset of the recent financial crisis though, demands for restraint of pay and rewards in the boardroom have been widespread, and prominent from establishment figures. So why such a change of heart?


Fred Goodwin, a greedy bankerThe decision to strip Fred Goodwin, the former chief executive of the Royal Bank of Scotland, of his knighthood, is rather odd at first glance, given that in spite of his errors, he appears to have committed no criminal offences. It comes hot on the heels of demands for various other bankers to give up their salary bonuses, or have them rescinded by shareholders. Some of the bonuses under fire are worth around £1m each. RBS chairman Sir Philip Hampton has 'given up' his bonus payment this year worth over £1m as he didn't think it appropriate.


The bankers may have been in the spotlight over executive bonus payments, which are in effect part of their overal salary package, but the angst over high value financial rewards isn't simply directed at bankers. There are plans to derail the payouts to bosses of Network Rail, as the fervour to limit rewards looks for new and wider targets. How long before footballers and celebreties (currently flavour of the month with Lord Leveson) come under the spotlight for their payments. How long before Capello, or the England manager's job at least, falls foul to the financial political correctness sweeping the nation?


Occupying the moral high groundWhat's behind the trend for banker bashing extending to anyone with a decent financial renumeration, and one being led by theiir pals who largely gave them their jobs and signed away on their contracts? And the thing that I'm trying to work out is where are the links between the trends to attack executive pay and what's happening in wider political debates? The Occupy Everything message that found sanctuary and commonality of purpose outside St Paul's express the disdain for bankers' renumeration very well. Some may explain the largely middle class angst giving rise the people chosing to camp it up outside St Paul's, at least to make a point for the cameras and before it got too cold anyway, as expressing the alienation we all feel.


The clamour for restraint isn't a collective political campaign by ordinary people though, it's largely a minority sport driven by those who are looking for scapegoats and clearly bereft of solutions for the economic crisis being blamed on the actions of a few individuals. The middle class blame game is well under way, but not only does it clearly distract attention from the causes and more importantly the solutions for society's problems, it is creating a moral framework, a comforting moral tale to very properly read to ones children about the moral failings of those weak people who give in to their temptations.


The charge sheet currently being levelled against the greedy bankers, ends up, always ends up, being used to police the ambitions of ordinary people, and the morality of greed is today's sin under the spotlight. Campaigns to name and shame reward packages for being too generous are not sweet and fruity, but pious and condescending. The contemporary trend to save us from ourselves always requires a missionary in position to thrust home the point. And so it is that we end up with Ed Milliband campaigning for the price of Chocolate Oranges to be increased at W H Smiths.


Let them NOT eat cake!As Tim Black points out on spiked, writing in Executive pay and the assault on aspiration:

'The implication of this moralistic criticism of our social and economic situation is clear. If greed is the problem, then enforced restraint is the solution. We need to stop wanting so much. We need to lower our material aspirations. We need to want less and refrain from consuming far more. And you can rest assured that there are plenty in the political and media class who are all too keen to help us on the road to salvation.'


The old slogan of let them eat cake may come across as somewhat detached and contemptuous of the poor people on the receiving end, but the updated version of don't let them eat cake is surely worse. Well off bankers may be getting it in the neck at the moment, but using greed as the weapon to do so, shows a profound lack of ambition and ends with those less well off experiencing the bitter taste of contempt by having what we can put down our own necks restricted, and taxes on sugar is only the latest attempt to save us from our own greed.


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