Not sure I quite get this Nick

For a moment in 2008, it seemed that such lavish rewards would vanish. The bubble in football like the bubble in the economy would be replaced by an interlude of sanity. No such luck. Last week, as Rooney demanded a salary of £10.4m, the City prepared to gorge itself on a bonus pot of £7bn.

Why is it such a bad thing that the workers gather unto themselves the fruits of their labour?

I thought lefties rather liked this thing, that capital wasn\’t scooping this excess value off the top?

Tellingly, both are aware of the dangers of what Alan Sugar called the \”prune juice effect\” on the Premier League, where money pours in at one end from Sky and out the other to agents and players.

Not for the first time Alan Sugar has a decent grasp of basic economic thinking. This is true of any industry that depends upon human talent: the talent ends up with the money. True of banking, football and movies.

And yes, it is also a principal/agent problem and yet it\’s one that no one has really worked out how to solve: unless you want to start imposing either maximum wages or kill competition between different employers.

Now I realise that I don\’t share much of the lefty bewailing of high incomes to a favoured few: but even if I did, I\’d not be certain that the only possible solution, the imposition of a cartel, would be worth the pain and grief.

10 thoughts on “Not sure I quite get this Nick”

  1. Every single lefty-socialist “When Saturday Comes – I love Non-League Football – Football is the Ballet of the Working Class” type moans about the wages paid to players and yet it is a perfect model of what they want for society: the workers getting the fruit of their labours whilst the cpaitalists get shafted.

    Knob ends.

  2. It’s not the perfect model. In their favoured model all players, of whatever level, would be paid exactly the same. There would be no player trading and teams could not be picked based on who the best players were, everyone would get a turn.
    Under these conditions, all teams would be equal.

    Equally rubbish.

  3. £7bn bonus pot: if paid to individuals paying 50% income tax, £3.5bn for the govt. What is their problem? Would they rather the bonus and the tax wasn’t paid?

  4. Terry, they’d rather that all the wages went in tax. Then wise people could decide how it should be allocated.

  5. Isn’t it more than £3.5Bn to the Government? Employees NI isn’t capped is there’s anther 1% and IIRC Employers NI isn’t capped either, so that’s another £900m or so.

    Sounds like a good deal for the Government if you are a statist, although I suppose they are never satisfied.

  6. This is silly, self-congratulatory argument. There’s no reason why lefties have to favour paying a few people people massive amounts of money simply because it represents a return to a particular factor other than capital. Lets extend the argument to finance and lefties should be campaigning to keep paying profits to bankers–I wait, I see you’ve already done that.

    Many left wingers want a more equal distribution of income–that’s why they dislike seeing individuals earning ridiculous amounts of money. And not just left-wingers:

    “No society can be called flourishing or happy in which the greater part of its members are hungry or poor.”

    Adam Smith

    “This is true of any industry that depends upon human talent: the talent ends up with the money. True of banking, football and movies.”

    Pfffffft!

  7. “in which the greater part of its members are hungry or poor.”

    And who precisely is hungry or poor today? No-one. Unless we accept the definition of “poor” to mean “I want a second Sky box for my bedroom”

    “Many left wingers want a more equal distribution of income”

    In other words, they want to confiscate it from the lucky and diligent and talented and give it to the “poor”. Which never works: are all lefties so thick they can’t read history books? They did all these things here in Britain before. And it was an utter disaster.

    The onus is on the leftie to explain why it’s different this time, why human nature has changed and that why this time we will all willingly link arms and work for our “poor” brethren without regard for ourselves.

  8. Sorry, are we claiming here that NFL, Major League Baseball, & Australian AFL and NRL are unspeakably rubbish? While they’re not my codes of choice (apart from NRL, which is awesome), they all have eveil communistical salary caps and generally work the opposite way from the free-marketeerage of the Premiership. I’d love to see a top-flight soccer championship that worked in the same way.

  9. “And who precisely is hungry or poor today?”

    Hungry people are hungry and poor people are poor.

    “Which never works: are all lefties so thick they can’t read history books?”

    Probably too busy installing new Sky boxes in their bedrooms, communicating in grunts and sponging off the state. That or they’re just plain thick. Be patient with the rest of us, Kay–we can’t all be geniuses.

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