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Cameron’s move on fat cats’ pay is just showbiz

First Cameron’s grandstanding: “We need to try give people a sense that we have a vision at the end of this of a fairer, better economy”.

Then the idea: stop top people handing out hugely inflated salaries + bonuses + incentives + shares + share options to each other.

Then the awareness that what has prompted this sudden gush of concern is small businesses “furious with these rewards at the top for people who aren’t taking the sort of risks they’re having to take”, not the anger of the population at large who throughout the last two decades have been furious at a grossly unjust system.

And then the realisation that this is largely a PR stunt because the proposal – giving shareholders a vote on top pay packages – isn’t new (they have this power already if they care to exercise it) and won’t be effective (shareholdings are dominated by institutional holders who nearly always go along with the board even in the most egregious cases of excess).

What is fundamentally wrong with this idea is that only shareholders have any right to decide what the bosses get. For Cameron, and for the Tory party he leads, capitalism is simply about maximising value for shareholders, management’s role is to produce this, and the workforce is merely the residual variable necessary to bring this about. This is the rampant pre-war version of capitalism, which the Tories would earnestly wish to re-create, but it is wholly out-dated today.

Shareholders are largely dormant and remote, management uses the rhetoric of shareholder value to hide their own drive for power and wealth, and the workforce which is crucial to the overall success of the enterprise is nevertheless denied any access to real decision-making and kept subordinate by anti-union laws.

If the pay system at the top is ever going to be remotely fair, the workforce, not just the shareholders, must have a major say in determining it. They are a much bigger part of the teamwork of production than the shareholders, and have a hugely greater knowledge of exactly what is going on in the place of work and who deserves what. Putting a representative of the workforce on the top earners’ remuneration committee would be a start, but such a person could easily be ignored or outvoted by the other members of the committee. What is really needed is that top pay should have to be agreed by the workforce as a whole at an annual meeting of representatives of all the main occupational grades within the organisation.

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