Scraping by on £4million a year

There was a remarkable article in Tuesday’s Guardian about the ultra-rich demanding more money. Philip Hampton, chairman of the Royal Bank of Scotland, said he had been contacted ‘quite a lot’ by bankers wanting more pay.

On one occasion, ‘I was talking to somebody about potentially getting a £4m pay package. And outrage coming from across the table from the other side because they know that somebody doing a comparable job at another bank is getting £6m. This is absolutely outrageous to them, that somebody is getting 50% more.’

£4million is about 160 times as much as the average income of a full-time worker. Hampton commented that such an attitude illustrated ‘part of the different world that can be inhabited’.

Two things about it are systematically wrong. The flaws run right through modern capitalist society.

The first is the obsession with that one person who is paid more for a similar job, while forgetting about all those other people, over 99% of the population, who are paid less. This ‘I ought to be paid the maximum’ mentality reveals a self-centredness that every established moral tradition opposes. Perhaps it is the result of 1980s Thatcherite me-me-me-ism. Or just what inevitably happens to people who get paid so much as to lose touch with reality. Whatever the cause, when this attitude becomes common among people with significant power, society is undermined.

Every society, if it is to survive for any length of time without destroying itself, needs its members to have a realistic and constructive sense of their place within it. Each of us receives from others, and in a healthy society people are at least to some extent appreciative for what they get. Conversely most adults are in a position to contribute, and in a healthy society people are pleased to do something for the common good. This one person has clearly lost touch with the proper roles of giving and receiving. Most societies can cope with one such loose canon, but as Philip Hampton makes clear the financial system of present day capitalism has generated a whole class of people who think like this.

This makes society unstable. It is unstable for other reasons as well but this is one. It is being eaten away from within by a class of parasites like this anonymous banker, who have no sense of their proper place within society and yet are immensely privileged by it. He or she should be given not £4million but an asbo.

The second flaw is the disconnection between money and its function. The point of receiving an income is to enable recipients to provide for their needs. £4million is so far in excess of what anybody could need that alternative justifications for the pay get invented. We know what the usual alternative is, not only in this case but more generally with the over-paid: their competition against each other. This is a completely different, artificially invented function for money.

But if competitiveness is the issue, the matter can be resolved more cheaply. Why not reduce the pay of the person receiving £6million? It will have the same effect as increasing the £4million. While we’re at it we could reduce both salaries by a factor of 100.

Of course they would object, and the whole world of the over-paid would support them. This is because our society has created a class of people who are only out for what they can get for themselves.

It is a moral issue. Societies like this cannot survive. At present, as the pay of the ultra-rich keeps ratcheting up and the poor are driven to ever-greater poverty, it is pretty clear that we need a new understanding of what money is for – and what inequality is for – which would be acceptable to the general population and would guide government policy. Such a new understanding will not come from economists – it isn’t what economists do. The usual source of these things is a religious tradition. Both Christianity and Islam have the resources to show the way forward, though their leaders are currently anxious not to offend the ruling classes. Nevertheless, somebody needs to offer a lead.

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