The Ongoing Destruction of Capitalism

Mark Hubbard's picture
Submitted by Mark Hubbard on Sun, 2012-01-08 22:25

I take back everything good I've said about David Cameron, who I thought was a glimmer of hope in Europe. He's pushing for a Starnes' Law for British corporates. As reported in today's Press:

Bosses' pay should have to be approved by votes among shareholders as part of efforts to restrain rising inequality, British Prime Minister David [Starnes] Cameron was quoted as saying.

This idiotic hysteria surrounding income inequality has become the major menace of freedom in the West.

More here on BBC:

Currently such shareholder votes are non-binding. Also, what Mr Cameron-Starnes misses, entirely, is that shareholders already have a 'vote': if they don't like company policy, they can sell their shares. So there is already a mechanism existing via the volunteerism of the free market, but that's not good enough apparently: soon there will be the coercive fist of government thumping on the table of every Board of the private sector in Britain. Mr Cameron-Starnes is a disgrace, and has just undone all the good he achieved by setting about whittling down the size of the public sector - obviously, in light of this, only being done because of fiscal constraints, not any underlying philosophic reason: the liar is outed.

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"This idiotic hysteria

Leonid's picture

"This idiotic hysteria surrounding income inequality has become the major menace of freedom in the West."

"Capitalism is the unequal distribution of wealth; Socialism is the equal distribution of poverty."

Winston Churchill.

It looks bad...

Marcus's picture

...but might be more noise than action.

This is Cameron's argument: "That these bosses should not be paid huge bonuses when companies make even larger losses, or even fail." (That's not a quote, just a rough idea of the sort of statements he has made.)

Of course it should be none of his business whether or not they are rewarded for failure, but everyone would accept that from an ethical point of view, his argument is valid. (Not that it should be backed up by law - but the general principle of "reward for success").

Anyway what does this mean in practice?

Labour is currently frothing at the mouth because Cameron's proposal probably will not change anything - and they are saying it needs to be changed now, communist fashion.

Why won't it change anything?

Because shareholders already have the right to query the salaries of their executives and recommend a change.

So far, not one company, has used this power since it came in under the last Government (according to the news report I watched on this).

When their right to determine salary by the shareholders is enshrined in law (as Cameron wants it to be), why would they suddenly now feel compelled to use their new powers?

I am as disgusted as you that Cameron opened the door on this topic, however I do have some sympathy for why he has to do it if he wants to hold the coalition together.

The Lib Dems are going to be extinguished next election and he thinks he needs to keep throwing them a bone to keep them in line until next election, then he can stay in Government, cut the deficit, and bring the spending cuts to their conclusion.

Crass and sickening, but true.


Sandi's picture

David Cameron is hell bent on his "big Society"

Just like Len Brown, John Banks and John Key.

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