Why am I so troubled by this report about how much the directors of the biggest companies in the UK are being paid?
Two disturbing figures:
1. Directors pay in the biggest firms has gone up by 102.2% since 2000 while the average pay of their employees has risen 28.6%.
2. Half of FTSE350 directors earn more than £1million.
Do I have any liberal reason to be upset by this? Or should I just accept that my objection to greed on this scale is simply aesthetic, on a par with my dislike of, say, polystyrene, or certain shades of purple, so I’ve got no reason to advocate political action against it?
Two fairly sound liberal principles are that power should be dispersed, and it should be accountable.
There isn’t a simple equation of money = power, but wealth is certainly one of the forms that power can take. The financial power of individuals is always fairly unaccountable, for good reasons. But individuals or families with millions of pounds to invest inevitably wield considerable power over others, whatever they choose to do with their money. This is the case whether they exercise it directly (eg by owning a single firm), or indirectly (by spreading investments across the world).
I’ve not suddenly decided that we need a command economy, simply transferring power from businessmen to bureaucrats.
But my point here is that this concern about the rich getting richer shouldn’t be mistaken for a dowdy form of socialism. It’s not about class or envy or standardization for its own sake. (And its not just about poverty, either. In global terms most of the people employed by one of these companies continuously since 2000 are probably not destitute, even if their employment is not very life-affirming).
This is about power. That’s what makes it a liberal issue. I might almost say something to shout about.