In recent weeks I’ve written about the nonsense that is the labour theory of value including this observation:
In the final analysis something is worth what it’s worth – the value is determined by consumption not by production.
And, in order to demonstrate how allowing a guild system to dominate, I have observed that people (in the UK, at least, but probably everywhere else too) become doctors because it’s a very well-paid job. I know there are people who talk of their altruistic motives in donning the white coat – but would they do it without being in the top 1% of earners?
The BBC – in their leftie manner – has been asking about the matter of pay (and in the round levels of taxation). On the radio we got the delightful Polly – millionairess, ex-public schoolgirl, villa-owning champion of the poor and downtrodden. I note that she has not – in the manner of Dave Nellist – given away all her earnings so as to live on a ‘worker’s wage’. But that’s most socialists for you – do as I say not as I do.
I am however fascinated by the manner in which the debate about pay is couched. There are – it appears – three primary populist measures: the pay of the prime minister; how much premiership football players get in wages; and bankers’ bonuses. All other considerations – including the sensible and proper analysis of income levels and their impact on society – have to be seen through the prism of these measures.
Thus the wages of a local council chief executive are compared to the PM’s pay – not to a more fair comparison of the heads of the civil service (all of whom earn more than the prime minister). The proper comparison with the PM is what a council leader is paid not what the chief executive is paid – and here, whatever we might think about the remuneration of councillors, the PM comes out pretty favourably.
At the same time we have to go through the ritual about footballers – how their pay is ‘obscene’, how it is ‘destroying the game’ and often how the government should intervene. Again, we fail to ask whether the world-wide popularity of English football is the real reason for high wages. And why we should, in fact, welcome the fact that most of the cash we pay to watch, listen to and read about football ends up in the bank accounts of players (and through that in the coffers of the taxman).
The BBC reports were added to by an egregious poll conducted by ComRes – nothing wrong with the manner of the poll’s conduct or the professionalism of that company – but asking the public – without context – how much they think different folk should be paid is both economically illiterates and monumentally immoral. How much you or I – or rich folk like David Beckham or Tony Benn for that matter – earn should not be a matter that is the subject of social control. But heaven knows about the public’s value system anyhow!
The bosses of Britain's top 100 companies should be paid about £118,000 a year, a BBC survey suggests. Those questioned also put the pay of Premier League footballers and financial bond traders at £365,000 and £58,000 respectively.
And when the poll reports that lower paid folk should be paid more this is done without the obvious value statement – how happy will you, dear respondent, be to pay higher taxes, higher prices and have less choice? Not happy – well shut up saying what other folk should be earning then.
In the end we’re paid what we’re worth – or, in the case of doctors, teachers, bankers and lawyers, what we can screw from a market that the stupid government has given us control over. Yet the terms of the debate are conducted on the assumption that there is some morally justified public policy intervention in levels of pay – and especially pay of senior and successful people. There isn't.