Let’s be clear at the outset that being concerned about the ever widening gaps in financial power does not mean that we want to see everyone paid exactly the same no matter what they do. Wanting to reduce the gulf in wealth, which is patently destructive of social wellbeing, is not the same as wanting to eliminate all differentials in rewards for efforts and contributions.
The problem we face is that the few who have obtained the most powerful corporate executive positions are holding everyone else to ransom, by declaring that they must be allowed to gift themselves however big a share of their companies’ revenue, while everyone else must be pushed towards low pay, precarious jobs, and shameful working conditions. They give themselves astronomical pay rises even when their businesses’ finances have done poorly under their watch. And they stop their workers’ pay from even keeping up with inflation.
The solution is worker cooperative management. People who work in the same organisation would not find the valuation of their contributions diverge so radically if they had a say in the process themselves. Research has shown that worker cooperatives are not only on average more productive and offer more stable employment, but they also have lower pay differentials [See Pérotin, V. (2016) What do we really know about worker co-operatives? Manchester: Co-operatives UK]. Workers as members recognise that it makes sense to reward some among them with higher pay, but the extent to which that is agreed is grounded on a shared assessment of how much greater the contributions from those colleagues are, and not simply on the power of those at the top to pay themselves substantially more.
The same principle applies to the differentials in the fees charged by different professionals engaged in resolving potentially adversarial disputes. Just as people can be marginalised as citizens because they are deprived of their share of the proceeds they generate with others, their influence in society can be further diminished by the hyper-sensitivity to wealth when contested assessments are made in relation to issues of critical interest to them. For example, lawyers engaged on either side of a criminal or civil case; accountants involved in establishing or denying financial anomalies; or scientific experts commissioned to scrutinise or defend the safety of a new brand of medicine or food.
In all such cases, if there is a vast gulf between the fees demanded at the lower and upper ends, then firms with fees at the upper end will on the whole be able to tempt and recruit more of the most impressive performers, and they will offer clients who can afford to pay their exclusive fees the unmatched calibre of their recruits in winning the disputes in question. However, if the professional bodies concerned are required to bring their members together to set limits on their fees differentials (with the proviso that they do not all charge exactly the same as would a cartel), then all the relevant firms may then fall into a more affordable range, and can compete against each other on a more level playing field (there is a clear parallel with development in sports where a few wealthy clubs can make the overall league uncompetitive because they buy up all the best players). Consequently, citizens in general will be less likely to be disadvantaged by decisions that will favour the wealthy few at the expense of the interests of the wider public or particular less well-off individuals.
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Note: The above is one of the 40 recommendations on how to improve the conditions for attaining a better functioning democracy, set out in my book Time to Save Democracy: https://policy.bristoluniversitypress.co.uk/time-to-save-democracy
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