Much too little thought is given to fundamental ways of fixing society’s most pressing problem, which is massive inequality of wealth. Banking regulation is an important part of the problem. But to attack the root cause of corporatism, you need to look at the make-up of corporations.
Two simple measures can make a radical improvement. The first is share ownership by workers. This appears to have gone completely out of political discussion.
Whatever the legal basis of a company – private, public limited, partnership etc – a substantial share in it should be given to all those who work in it and actually create the wealth. This share should come with full voting and distribution rights. I would advocate that 40% of the ownership of every company should be given to those who work in it. The distribution of that 40% should be adjusted annually according to the number of man hours put in, on the basis that everyone’s man hours are equal. Retired and ex-employees would retain rights until death, with all hours ever worked in that company included.
Thus if Jane were one of four people working in a start-up and they all worked equal hours, after one year she would own ten percent of the company. If the next year four more staff joined, and they all continued to work the same hours, Jane’s share would fall but she would still own more than those who joined later. If eventually there were thousands of staff, her percentage would become very small, but of a very large company, and she would still own significantly more than people who had put in far less accumulated hours over the years. On retirement, in addition to her pension, she would still own a share in the company, but this would diminish as other people built up their own contribution to the enterprise.
It would make no difference if Jane were the cleaner or the MD, and if she owned or not other kinds of non-worker shares in the company,
The other major difficulty in society’s relationship to remuneration is the ludicrous over-valuation of “management” work. The gulf in salary and remuneration between higher and lower paid employees of a company has grown enormously in the last thirty years. This is an easy fix. There should be a limit on the multiple of total remuneration (including all benefits) between the highest and lowest paid person in a single company or other body, including government department, agency or authority. I should suggest a multiple of six as appropriate. So if the cleaner is on £18,000, the CEO can get no more than £108,000.
This measure would solve the low wage problem overnight, as the CEO’s prime drive becomes increasing the cleaner’s remuneration. Attempts to evade (ie management by separate consultancy company) should be a criminal offence.
It is lamentable to read some of the comments. Despite the fact that Craig has invited everyone to think, as yet some of the participants are in the “monkey see monkey do” mode and are busy regurgitating the memes as their own thought out and reasoned thoughts!
Fact that in every aspect of life humanity has progressed except in social and banking models. The progress in technological field has meant regression in social contracts. The banksters and their Rothschild ponzi model has been the de facto “free world” model that has been promoted against any and all of other systems and the never ending congenital greed of the banksters has lead to an empirically failed system that is further bolstered at even greater expenses on the humanity at large.
The clever boys in the room are not really clever at all, they are just great players of the system and they know they cannot lose regardless of the risks as they gamble away all. The result is now a longer working life, and the pittance pension that will be awaiting these would be pensioners at the end of their working lives. That is if zero hour contracts have not cut their lives short! Most here do not understand the implications of the zero hour contracts!!! No sick pay, no holidays pay and sometimes no pay at all, in combination of the lack of state assistance more people are being made homeless and going hungry than before.
The current system is no longer working it is failed and those crooks insisting on perpetuating the con are busy killing and maiming to keep this dysfunctional broken system going!!!!
welcome stage 4 and justaguy,. its good to hear new thoughts pitching in. stage 4, respect the E 35 is a flying disaster, totally over engineered, too heavy and unsafe for pilots. Their new, last minute design helmets, the previous one’s were too heavy with the G’s, will finally be delivered, touch wood and cross your toes, in the autumn, maybe sooner.
I have been a supporter of Mondragon and its recipe for success for a while, their structure a model for surviving turbulent times, just as Lysias mentioned the rights of workers in Germany to determine the course of their company, steer their course to some extent.
@Savior cinco you are so right, what you have described is just as Roberto Saviano relaid it in ‘Gomorrah’, the way organised crime is undermining projects throughout Europe, not just his home town Naples.
We must bring up and teach our children well to fix society, a tremendous task. Role models are not celebrities, they are successful previous pupils/students/part timers.
Modernity does not help, to see young toddlers moving the Ipad/phone screens of their mothers, living in between the interplay of their parents screen life and undivided, hang on I just got an email/call/text, attention to their natural needs is such a sad spectacle to view, a dichotomy.
I suppose sandpits and marble runs, with tunnels and see saws are far too dirty these days….;)
dooh…. F 35B
Even if we go back to bartering,Fed up, we would have a need to live in sustainable parameters of sorts.
Currently we are living with lalaland economics, the TTIP signatories are dollar dependent countries which have been subjected to QE monies on a massive scale, now they are forced to sign up to the club/crooks.
What happened in Russia when the State sold shares in companies is a cautionary tale. Bill Bowder’s Red Notice is worth reading.
Why 40%; this strikes me as well intentioned but ultimately unlikely to succeed social engineering.
If 40% why not 100%?
Why interfere with ownership when you could instead re-energise the unions. They lost their oomph through legislation and I don’t know what else. It may be good to work for organic change. Motivate people to run their union. Motivate people to set up co-operatives. Motivate people to set up small businesses and create an economic climate for them and a market place which is not locked shut with legislation, statue and delegated regulations, which only large businesses can afford to understand.
Craig said that
“Banking regulation is an important part of the problem”
Then I came across this
http://www.herald.co.zw/caaz-impounds-us-cargo-plane-bleeding-body-millions-of-rands-found-on-board
Personally, I think banking regulation is an important part of the solution.
Eh. ‘Motivate’ is the operant word. How to motivate is the quandary. When families are faced with fear of one potato in the house, the motivation is clear as crystal. Once primary needs are met, the discussion can continue to languish in the archives. When you get hungry enough, let me know.
You can’t have the EU without the commensurate bureaucratic pushback against regulation. You can’t have J.P. Morgan and have him thin. too.
No need to go back to bartering although bartering is somewhat akin to a value system!!! There is need for a fundamental paradigm shift and a move away from the fractional reserve banking system that has been deregulated to the nth degree with the resultant wealth pump that is only pumping the wealth up into the pocket of the ponzi scheme licensees.
This system has been widely promoted and any other notion has been brutally stifled hence the almost dead-end once there is a any notion of moving away from the Rothschild model!!!
The notional price is an arbitrary amount that has little to do with the value and lot to do with the cartels and their decision to fulfil the role of the robber barons.
As it stands somewhere in the region of 74 pence in every pound is going for interest payment of one sort or another. that is in addition to the direct and indirect taxation that is taking a further 18 pence in every pound leaving the pound holder with only eight pence of useful currency that is if they are lucky enough to have a job!!!!
This is plainly a wrong situation and needs to be addressed pretty urgently won’t you agree?
The war on poor… Aint new… Where are Snp Regards The Providend Lenders.
Craig, the economy is about to collapse (yet again).
Perhaps you should address the new wave of forces against this, rather than tired old bullshit?
Subprime Mortgage Whistleblowers Warn Bigger Crash on Its Way (2/2)-
https://www.youtube.com/watch?v=OO5DxgEBn8A
Why don’t you just declare it fixed. Then ban anyone from talking about it.
The economy hasn’t stopped collapsing since last time, the 1920s. It is designed to be in perpetual collapse, for some to make money many must lose. The indexes, stock exchange, share prices are all fabricated and have no connection with reality.
Fans of shredded wheat style breakfast cereal should note that Lidl now stock an equivalent, costing less than half the price of over-priced BDS afflicted Nestle products.
Nevermind, I have heard though that battery life of most mobile-phones, particularly the more expensive ones, can be improved, extended considerably, doubled even, by placing them for five minutes or more in a microwave oven on full-power. I agree mobile-phones are a societal blight, I’d be strongly in favour of not just curtailing their use, but a shutdown of the networks entirely, rendering the handsets merely a hazardous waste disposal issue. There is a clear road-safety case for doing so, as there is for outlawing other hazardous technological ‘advances’ such as in-car GPS which add new terrors to life.
You need a good collapse every now and then, so you can fleece people in both directions.
Apologies to those already familiar with it, but this is a particularly good article:
The Great American Bubble machine
It goes some way to explain “leveraged markets”:
And where the money actually went, when everyone suddenly got poor:
Just a tiny sample to whet your appetite.
Thanks for that advice, Tony M, I do prefer gas cooking to reheating so I do not own a microwave.
Your tip on Lidl’s and Aldi’s much cheaper quality foods is appreciated, these large supermarkets have played us far too long.
sorry off topic, but a scandalous sign that campaigners against privatisation were right to say it would create two health services.
An anonymous group of Consultants, (they can’t even speak up in public anymore without being anonymous) have said that
‘NHS patients treatment and ops have been cancelled so that private patients can be seen on the same day’.
The NNUH is a greenfield hospital that is expanding ever further as nobody dare to build a new hospital. Its creaking at the seams and had to extend its A&E department for being unable to cope with numbers. It was one of the first overpriced PFI hospitals in the country and it has 60 beds permanently allocated to private patients.
It leaves to be seen whether these beds would be available to all in need should there be a major accident such as a chemical factory explosion, air accident or major traffic pile up.
http://www.edp24.co.uk/news/health/norfolk_and_norwich_hospital_bosses_investigate_claims_that_nhs_patients_treatment_is_delayed_to_make_way_for_private_appointments_and_consultations_1_4427473
Can one fix society without fixing one’s foreign policy?
An interview with the Saudi Arabian foreign minister.
“Al-Jubeir: I don’t think anyone can predict what the short term will look like. In the long term, it will be a Syria without Bashar Assad. The longer it takes, the worse it will get. We warned when the crisis began in 2011 that unless it was resolved quickly, the country would be destroyed. Unfortunately, our warnings are coming true.”
http://www.spiegel.de/international/world/interview-with-saudi-foreign-minister-adel-al-jubeir-on-syrian-war-a-1078337.html
How can this man be sitting at a peace conference if he wants to supply terrorists with surface to air missile systems? when he wants to carry on harassing Assad until he’s gone, ‘as long as it takes’?
That’s our bosom ally that is, our IS/Daesh loving friend who thinks nothing of sacrificing Kurds and maiming Yazidi’s as long as he can go shopping in Oxford Street and go about his slaughter business, bank offshore in London and behead a few HR demonstrators for saying boo to a cat.
Times are changing and so must our relationships that have gone awry and stale. Money cannot be regarded as the only arbiter in life!
OTAN worried about Turkey’s guile.
A few thoughts about the coincidences between old cold war thinking and today’s situation in Syria by a collective of Spiegel journo’s.
To be taken with a pinch of salt regards the paragraph ‘Putins hybrid war’, but overall not too bad.
Not an analysis that would come easy in any of Murdochs rags.
http://www.spiegel.de/international/world/nato-worried-about-possible-turkey-russia-hostilities-a-1078349.html
As a long time reader of Craigs’ blog and the writings and links of commenters, which I find stimulating, I have decided to post my first comment. Llewelyn posted a comment and link to http://www.positivemoney.org which no-one bothered to read or comment on- shame.
As someone who has only just begun to try and understand the creation of money I would like to add that this small group of young enthusiastic economics professionals have done a remarkable job of getting cross party support for a debate in the house of commons on money creation. Their claims about the creation of money are substantiated by The Bank of England, Lord Adair Turner and Martin Wolf chief economics editor of the Financial Times. They explain how 97% of money is created by private banks out of thin air (via fractional reserve banking) when they make loans and then charge interest on it. They question, in the digital age and in light of the various scams which have been uncovered at the hands of private banks, whether or not this should be allowed to continue in the future. They are deliberating about what better, more democratic and robust system might be considered to replace the existing unregulated, opaque system which is not understood by most parliamentarians let alone the general public. Please, Craig and all participants to this blog take the time to familiarise yourselves with money creation and the supporting information presented by positivemoney.org it’s quite an eye opener.
David
Nevermind Stelious of Easy jet has opened a budget supermarket selling cans of beans etc for 25 pence each!!! Fact that he is so successful show in him running out of stock far too earlier than he had anticipated and he is now limiting his shoppers to so many cans each.
The fact is everyone is talking about money but no one is noticing the nature of the money? The fractional reserve banking effectively creates money on demand and from thin air. one minute it has only a fraction of the money it wishes to lend then in comes the borrower whom then borrows and despite the money not being there, they lend it and at that time the money is created!!!!!!
This kind of ponzi scheme is always favouring the bank and not the lender or saver! and regardless of however diligently the debt are paid to the banksters, end of the day there in not enough money in the system to pay back the debts!!! This kind of arbitrary scarcity that is leaving the money tap at the hands of the banksters is a license to print money and buy up the wealth of the working man resulting in the creation of the underclass who are then left to be fleeced by the other lesser powerful groups, included supermarkets and the iphone manufacturer, or trainer, and in clothing purveyors.
However that is at the personal level but at the government level the charade takes a more darker turn. Government borrows money off the banksters!!!!! Hang on the banksters don’t have the money, and they will produce it from the fresh air, why the government cannot do that?
Stop that nonsense communistic talk and stop being a socialist is the answer!!!! What sort of talk is that?
Then the banksters lend far too much to people whom cannot pay back!!
Why is that so?
Because they can produce money out of fresh air!!! You would if you could baby!!!
Then the same banksters get commissions for the money they have lent to the people whom cannot pay it back!!! not bad so far
Not content with that scam they banksters pick up chunks of debt and bundle them and they sell these to the other money people expecting to have money to do no work and get paid for it!! They are evidently offering a service by buying the debts from the banks!!!
At this point the money people expect all sorts of interest payments on their chunks of “bought debt” and the banks can’t pay the interest because the money the created from the fresh air and lent to the people whom cold not pay it back is not coming back!!!
the money people then rush the banks to get back their money for the chunks of debt they have bought this the second scam of the banksters first created the money and then resold the same created money to others for real money!!!
Now there is bank collapses looming and the government goes to the banksters borrows more money to give it back to them so that they can make good the money on the debts that they sold twice over!!!
conclusion we we the people were still paying for the WWI debt!!! Yes WWI and also paying the interests on all manner of other investments of the government based on the phony money creation schemes, now we ware expected to pay for the money that was borrowed to pay the banksters to get of the hole they had dug!!
The fact that our taxes are not enough to pay the debts then goes on to being doubled by cutting the services we use!!! This the government attributes to the jobless and the cost of pensions and the health service too.
The bastards wish to do as criminals do, rob we the people of everything we have without providing any service other than beating us to death or killing us at point blank with guns and knives!!! This they call austerity!!!!
Austerity for whom? The government? No austerity for we the people whilst the banksters get their bounces and the corporates pay no taxes and likes of Murdoch earn four billion pounds and don’t pay as much tax as the street sweepers!
This they call “free market” duchyou like the free that you work for? Oh yeah you are free to come here and type your heart out and call them all the swine under the sun, talk is free!!! You can even go and shot the door in the bathroom and shout all manner of obscenities at the Queen too!!!
USSR people knew the scam and they had understood the scammers methods, in the West the infantile audiences still believe in the tooth fairy and the “democracy” and believe their tick on a bit of paper can produce miracles and who knows they may even win the lottery although in that case their chance in getting hit by lighting twice are more than wining that moron tax!
Multiple of 6 times lowest salary is not going to be easily accepted in private enterprise, but the public sector then there should definitely be a multiple. Start with the BBC at 20 * lowest salary and cut it every year until its 10 * salary.
Has anyone ever looked into Social Credit:
http://socialcredit.schooljotter2.com/
https://en.wikipedia.org/wiki/Social_credit
As I so often state, the purpose of this blog is to make people think outside the very narrow mainstream box. I am very pleased with the comments so far which make plain people are doing that.
Agree with that Craig.It seems to me that the erosion of salaried employment, and the replacement of employees by agency staff on temporary (or ‘zero hours’ contracts)is the main driver of inequality at the bottom. Guy Standing at SOAS accurately describes this new and growing class as the ‘precariat’, to distinquish them from both the old industrial proletariat (now largely disappeared in the UK) and the salariat(shrinking in size in both public and private sectors).
This class has now got so large that Craig’s solution, of simply abolishing the ‘precariat’ and merging them overnight into the lower end of the salariat -‘Of course it should also be a criminal offence to attempt to evade it by using agency workers or zero hours contracts for employees’ seems highly unlikely to work under the current conditions of cut-throat globalisation . The coiner of the term ‘precariat’, Guy Standing, is an advocate of a basic minimum income as a solution; it would certainly relieve the pressure on the most hard pressed members of the precariat, who are presently forced into accepting as many hours of work under crappy terms and conditions as the employer (at one remove, via a dodgy ‘agency’) offers them. See here for an example of this process in action-
http://www.rochdaleonline.co.uk/news-features/2/news-headlines/81564/jd-sports-criticised-by-former-employees
Standing is unclear how the basic minimum income would be financed; my first preference would be a reform of corporate taxation (Lawson’s idea of taxing multinationals on their turnover/sales country by country, thus preventing their shifting of ‘profits’ to the most tax friendly jurisdictions to minimize the tax they pay, would be part of this.)Secondly, taxes on property holdings (perhaps leading eventually to a full Henry George style site value tax) should be increased as, unlike taxes on ‘income’ and ‘profits’, they are far more difficult to evade (if a property owner, whether indivual or corporate, refuses to pay or disputes the sum payable, the tax due would be applied as a charge on the property to be collected from the sale proceeds when the property is next disposed of.)
A higher tax take from corporations and property owners would also, of course, mitigate inequality at the top end by increasing the tax burden on the overclass.
Glenn-uk @02.38am- thanks for linking to that classic Matt Taibbi article from 2010 in Rolling Stone
Thanks for that link David Venables, thankfully there are some who can progressively think their way out of a Stelios bean can.
Here is a group of actuaries and insiders who are thinking the unthinkable, making sense of something that is more real and not backed up with QE.
http://www.sustainablefinancialmarkets.net/participants/
Talk Real Voices | Katja Kipping (Die Linke) with Lorenzo Marsili | On democracy, DiEM25, refugees –
https://www.youtube.com/watch?v=Qclojwsr-cM
I’m not in favour of this for a few reasons, but I do see the “sort of “logic. In order to keep issuing shares to people you would need the company to continually grow in a real sense, it would almost be the same as expecting earth’s resources to be limitless, they are not and neither is the capacity for a company to grow indefinitely. If ex employees kept their shares and rights for life, you would need to continually create share issues, reducing the worth and value of a share to 7/8ths of sweet FA over time, this could in turn create funding problems for a business.
How about you can only keep shares whilst employed at the company, when you leave you return your shares. The money you receive is the current share value less the share price at the time of joining. You receive your portion of the rise in the company value for the time you helped the company. The problem occurs of course if the company becomes worth less, would we expect ex employees to take the loss ? We expect share holders to, so fair is fair. The point of shares is to accept the financial risks and rewards of an investment risk, whilst allowing the company to raise interest free capital.
You would also find strong opposition from current and future company owners, why set up a company, accept all the financial risk ( which is frequently huge ) then have to give 40% away for free and for life. If there is zero incentive to start a business, no one will start them, and lets be honest, most people start their own business in the hope of making a decent amount of money, remove 40% of that incentive and you may have a big issue. Most companies, especially SMEs just don’t make enough money to make this system attractive.
“There should be a limit on the multiple of total remuneration (including all benefits) between the highest and lowest paid person in a single company or other body, including government department, agency or authority. I should suggest a multiple of six as appropriate.”
As per Adam Smith.
Those people who start a business purely as a means to make a decent amount of money, are those least suited to start or indeed run a business. Most ideas for businesses from these people and others are hare-brained nonsense devoid of any useful purpose to any individual but themselves, they hope or to society, with no possible chance of success, hoping to create needs out of useless mind-numbing service industry fripperies.
For more than half of those in employment, including most ‘business-persons’, they’re doing things which frankly it would be better weren’t done at all, by anyone. But if they wish to blow savings or more likely inherited money, or to indebt themselves grievously then they are of course free to do so, their cluelessness and other-wordliness is the source of a tiny stream of income for others, serving them, for as long as they can keep doling out cash and deluding themselves they’re onto the next big thing and going to make it, some day if it weren’t for the fact they haven’t a clue, hadn’t thought this through and no-one but the incontinent ever walks in the door.
How does society support loss-making businesses, which are the only avenue through which valuable skills can be marketed and made available, and which do a good job and usefully serve their customers and society at large? And discourage, diminish those which are not only useless but harmful preying on the vanity stupidity gullibility, or obsessive acquisitiveness of the public.
What use is X if you can’t eat it?
Further to Chris Rogers’ Post, no point tinkering around the edges when the system itself is the problem;
http://www.counterpunch.org/2016/02/19/the-mad-violence-of-casino-capitalism/print/
@Macky,
The system we have today is not only fascist, it’s completely fucked – which is why I’m stunned when our political leaders keep talking about GDP and perpetual growth, which as anyone with a brain and scientific knowledge knows is impossible, unless we break free of our planet and head for the stars, which again is impossible for now.
At least many are thinking outside of the box or actually living alternative lifestyles more in tune with nature.
Regrettably, is seems greed has the better of many, which is why so many vote for political parties that are anathema to their best interests and those of our species, not to mention the planet itself.
What use is this accumulated wealth, and the power that comes with it, when we all have to fade away in the end – you can’t take it with you, and yet they continue to push a system that’s destroying all our viability.
As stated, only a massive disruption will change minds, particularly those of the shrinking middle class, who are now staring at the same fate that befell the workers.
Sooner or later the Elite will call for liquidation of billions of humans as the only humane response to the shit they themselves created, with many of us will accomplices. And it really is bloody depressing!!!!!