This is not, I think, about what they say it\’s about

Our anger over runaway top pay is more about merit than money

I have a suspicion, more strong than sneaking, that it isn\’t actually.

Ah, comes the reply, but these are the cream of the international crop, among the very best bankers in the world. The commission report blows a hole in that tired argument, revealing there\’s hardly any cross-border poaching of corporate talent. Not many of our monolingual high earners could work abroad and even fewer would want to. They like it here and do not have to be paid lottery jackpot money to stay.

That\’s one of the biggest lies (as in, misleading use of statistics) in the report. Some 46% of FTSE100 CEOs are not British. Some unknown but high percentage of those bankers are not British. It\’s not that we\’re trying to stop ours going there, we\’re in fact attracting them to here.

Strikingly, the commission found that even the mega-earners do not kid themselves they deserve their pay. They admitted that they had got lucky, that they worked no harder and risked no more than those earning much less.

As Mr. Dillow (pbuh) likes to point out, this is true of all of us. We all have a varied bundle of talents, likes and desires and some of us are lucky enough to be born into a time that values those specific bundles. Wayne Rooney would have been on a maximum £25 a week 60 years ago. Those of us who scribble for a part of our living might well have earned more 70, 80 years ago, given the profusion of papers that would pay for freelance work back then. Options traders would not have been paid much for that talent before the invention of options markets.

All of which is in fact entirely irrelevant. One of the things that markets really are good at is allocating resources to their highest value use. Sure, this is the highest value use as defined by those markets but so what? And what is a high value use clearly changes over time: footballers are more highly valued than they were, scribblers perhaps less so.

We need to revive the lost notion of merit and desert, to make those bagging huge, undeserved salaries feel a sense of shame or at least loss of reputation at such unwarranted rewards.

Which I think brings us to the heart of what is actually being whined about. What we\’ve really got is one part of the urban upper middle classes mightily pissed off at another part. The relative values assigned by the market to different traditional career paths has changed and we\’re seeing those relatively worse off as a consequence complaining.

It wasn\’t all that long ago that the graduates of the top schools and universities, the grammar boys made good who followed them, would find that whichever of the various career paths they took the financial rewards would be rather similar. Accounting, law, medicine, the professions, off into one of the crafts that were socially acceptable like journalistic punditry (but never actual journalism you understand) into banking or The City, perhaps into business (those last two being socially inferior as they were alarmingly close to \”trade\”)….but only business as a manager of course, to actually start your own was akin to running a market stall…. the cash at the end of it all would be quite similar.

A top solicitor or barrister (the 80s had barristers on £1 million  a year) would make about the same as a CEO or City man, top surgeons with their private practices much the same. The four bedder in the Home Counties with the wife, paddock and pony grooming daughters, the flat in town with the mistress, success in any of the various acceptable careers would provide these. And near success, being good but not great, in any of the careers would similarly provide a similar standard of income and living across those different careers. KBEs to those who made it to the top in any of them, CBEs to those who nearly did. It all rather came out in the wash whatever the career chosen.

This is no longer true. London is home to the world\’s international financial markets. Those in them, the bankers, those working alongside them, the lawyers and accountants, make multiples of what those writing Guardian columns do. Those running companies 50 times larger than those of old make multiples of what those writing the Indy do.

And that is what is driving this. The dorks who did sums are earning more than the intellectual people who worked at words and drama clubs. The nerds are getting more than the cool kids they went to school with. And that will never do, will it?

This is, as ever in England, a class thing. Just within a class rather than between them.

7 comments on “This is not, I think, about what they say it\’s about

  1. Peter Mansfield says somewhere that the Arabs states that had oil were more unstable than those that did not. I am not sure he is right or that the relationship is particularly strong, but presumably something similar was going on – poverty is tolerable in a way that random massive enrichment for the undeserving is not.

    For various definitions of undeserving of course.

  2. One significant way in which a good left wing public spirited social commentator should agree we might save money would be for the outrageous remuneration drained by doctors (such the likes of Mrs Richard Murphy GP) out of the NHS, thus affecting patient care to be halved or quartered so that they received the equivalent of doctors in say Scandinavian countries where income equality is so much less that in the UK.

    And on the merit argument, my experience of most recently qualified UK doctors is that they are perhaps on balance harmful to health. So, much like bankers, they are overpaid for being worse than useless.

  3. I think you’re right on the big picture but not so much on the smaller. Yes, some middle class occupations are pulling down less than they used to, but this is not a neutral shift from group A to group B, the pool of people pulling down big money is shrinking and lots of the smaller fish are flapping about.

    Once upon a time useless items like Will Hutton could have been slotted into the private sector somewhere, but now he, and many well connected idiots like him, have to be kept on the public tit because there isn’t anywhere else that could afford them.

  4. I’d pay to see the pony grooming daughters. (Cue campaign by the ‘Sun’ against paedo ponies.) There are hyphens in compound adjectives for a reason, as any man eating tiger will tell you.

  5. Time was when priests, doctors and social reformers were paid peanuts because these were vocations.
    Now these same professions want to be paid banker wages for moralising at us.
    O tempora! O mores!

  6. This argument would hold if it were only those involved in the financial services whose earnings had soared. But my sense is that there has been a corresponding increase (though to more modest levels) in the incomes of “top people” in the public and state-funded sectors.

    The senior staff of local authorities and NHS Trusts come to mind, though I don’t have the data to support these examples and stand ready to be corrected.

  7. Perhaps there should be a “High Rewards Commission” as well, to look at the obviously disproportionate gains made by (say) a Rowling, McCartney, or Jobs compared to the others slaving away in the same fields.

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