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.