Quote ="Sal Paradise"The only nations wanting out would surely be those who contribute financially to the EU e.g. Germany, France - there is no way they are going to abandon the EU - so that leaves Italy and Netherlands? I agree it is going to be tough for the UK to negotiate no change without any financial contribution.'" https://www.bbc.co.uk/news/uk-politics-48256318 There are a few others that contribute, and if you look at it per capita Sweden would be quite high up, for example. Each country will have it’s own concerns, and like the UK, may want to put sovereignty ahead of immediate economic interest... to a point. Therefore, the EU has to balance its desire for a good deal for us and them, with a need to demonstrate to its member states that they are better off in. Unlike the divorce deal, which was just us agonising about which off the peg offer we wanted, I think here it’ll be more complicated - with each of the EU27 wanting to ‘help’ shape the deal. Assuming there’s no extension, i expect it’ll be a pretty basic and limited initial deal. With a few ‘stop-gaps’ where an extension is needed but they want to pretend that it hasn’t happened. So, as a first step, they’ll need to negotiate and agree on priorities, which’ll run the clock down a bit. Quote ="Sal Paradise"I agree - I don't think the outcomes will be anywhere as catastrophic as have been predicted - they never are. Business is a very resourceful animal it will cope with change it might be a bit painful to be begin with'" I don’t think it’ll be [ucatastrophic[/u on a national level. But that ain’t the strongest endorsement. It depends on the shape of the deal, but there’s bound to be some pain and disappointment. ‘Not a catastrophe’ feels like a way of trying to limit the latter. But while there is truth in the ‘no pain, no gain’ exercise mantra, pain isn’t a guarantee of gain, and the gains still look limited to me. Then again, stuff like challenges around managing workplace automation to benefit the many, and environmental stability are of much greater concern and interest to me than the ECJ or EU immigration.

Quote ="Sal Paradise"The only nations wanting out would surely be those who contribute financially to the EU e.g. Germany, France - there is no way they are going to abandon the EU - so that leaves Italy and Netherlands? I agree it is going to be tough for the UK to negotiate no change without any financial contribution.'" https://www.bbc.co.uk/news/uk-politics-48256318 There are a few others that contribute, and if you look at it per capita Sweden would be quite high up, for example. Each country will have it’s own concerns, and like the UK, may want to put sovereignty ahead of immediate economic interest... to a point. Therefore, the EU has to balance its desire for a good deal for us and them, with a need to demonstrate to its member states that they are better off in. Unlike the divorce deal, which was just us agonising about which off the peg offer we wanted, I think here it’ll be more complicated - with each of the EU27 wanting to ‘help’ shape the deal. Assuming there’s no extension, i expect it’ll be a pretty basic and limited initial deal. With a few ‘stop-gaps’ where an extension is needed but they want to pretend that it hasn’t happened. So, as a first step, they’ll need to negotiate and agree on priorities, which’ll run the clock down a bit. Quote ="Sal Paradise"I agree - I don't think the outcomes will be anywhere as catastrophic as have been predicted - they never are. Business is a very resourceful animal it will cope with change it might be a bit painful to be begin with'" I don’t think it’ll be [ucatastrophic[/u on a national level. But that ain’t the strongest endorsement. It depends on the shape of the deal, but there’s bound to be some pain and disappointment. ‘Not a catastrophe’ feels like a way of trying to limit the latter. But while there is truth in the ‘no pain, no gain’ exercise mantra, pain isn’t a guarantee of gain, and the gains still look limited to me. Then again, stuff like challenges around managing workplace automation to benefit the many, and environmental stability are of much greater concern and interest to me than the ECJ or EU immigration.

Then we don't agree; I think it will be bloody awful - and 'not a catastrophe' is setting the bar very low; that allows for all sorts of negative impacts up to but not including a catastrophe, that you deem as acceptable. Either way, 'not a catastrophe' is a very long way from the sunny uplands, Brexit bonanza type bollox that we've been bombarded with for what seems an interminable period of time.

This argument 'it is never as bad as they say' often gets brought out when Brexit or climate change is brought up.

But if Jeremy Corbyn had been elected.....well we'd have seen a mass exodus and the destruction of the UK economy as we know it.

Funny that isnt it?

They wouldn't because what would be the incentive to wanting out....if you have to align standards anyway. You become what Boris calls a 'vassal state'.

I expect the EU will look for a free trade deal that involves free trade in goods, but it won't cover services. Most of the big EU countries are mostly goods-based economies whereas the UK is primarily services-based. Locking down free-trade with the UK so they can access the UK easily for goods exports will satisfy national interests but they will also want to keep barriers up for UK services (particularly financial services) firms so they can try to compete away investment from the UK.

Whilst that kind of deal will be of limited benefit to the UK, Boris would be tempted to go for it as it would be easy to sell as 'comprehensive, tariff free, will mean you don't pay any more for goods you buy from the EU' and his cheerleaders in the media will be ready to paint that as a great negotiating success.

Agrifood will be the big stumbling block for the UK, we will need to exclude agrifoods from a deal with the EU if we want a credible deal from the US but that will be very painful for the UK food industry if they one face cheap, substandard imports coming in from the US undercutting them here, and also face considerable barriers (and the EU by nature is very protectionist to outsiders on agrifoods) when accessing the EU. It would wipe out a large section of the UK's agrifoods industry especially smaller farmers.

I think over the next 2 years we will start seeing the tales of the 'betrayed by Brexit' - groups who mostly voted Brexit and have been sacrificed by the government in pursuit of the wider trade agenda. The first two to look for will be the fisheries and farmers. Fisheries because the EU have a very tight deadline on the UK to get this agreed this summer, and the EU fishing nations basically want access to UK waters, the whole thing that Farage was stirring the fishing communities up about. It will be a difficult compromise to back down on that, but Boris will probably calculate that they are a small interest group overall. Farage has seen the writing on the wall over this, he was saying the other week 'look as a Brexiteer I won't get everything I want, there will be all sorts of compromises made over fishing and so on'.

Yeah I think fishing, being a tiny % of the UK economy, but control over our waters being seen a symbolic of sovereignty will the first trade-off. Trawlermen will be joining the DUP in the ed-off brexiteers box.

May be a bit of a boost for the SNP, as fishing is proportionally bigger north of the border and whenever the news wanted to find an anti-EU Scot for balance they seemed to head straight for the fishing ports.

It will be interesting to see if the Conservative / right wing media core narrative will be just to burn each group one by one.

One difference I have definitely noticed between the Conservatives in the 1980s/90s and these days is that back then they still argued on some ideological vision of hope: markets are good, we're the party of enabling home ownership, share ownership, enterprise, etc. These days they have retreated in to a variant of "life is tough, the world doesn't owe you a living".

When people talk about housing, back in the 80s/90s it was "we're the party who enables lower-middle income people to get on to the housing ladder", now it's "you don't have a God given right to have a house".

When it comes to student funding, in the 80s/90s it was free tuition fees and grants provided by the Tory government, now it's "why give money to snowflakes to study gender studies".

What's also interesting is how they are willing to burn off groups that would have previously been Tory supporters. In the 80s/90s the Tories would have been the natural party of the solicitor, judge, doctor....now they are all "the metropolitan elite establishment". Down in the southern commuter belt, where the train service is terrible, you see similar attitudes being used when people in the Tory shires complain about the train services. "If you object to the price then use your car, or move house closer to your job". Or you get snarky 'opinion pieces' written by the controversial columnists like one I saw which responded to a story complaining about how lots of South Eastern trains have no functioning toilets available for 2 hour journeys, to give a big lecture on "if you're an adult and you can't go 2 hours without needing the toilet there's something wrong with you".

It's an attitude borne out of knowing there are problems that the Conservatives either don't have the ability or inclination to solve, so instead just have a go at the people complaining.

The Unionists in Northern Ireland used to be seen as natural allies for the 'Conservative and Unionist' party but Boris burned them over the border down the Irish sea and I expect their supporters in the media will eagerly lay in to the unionists if they start kicking up a fuss about it.

And the pattern will continue with groups like the fishermen and farmers and people in northern industries that face closures after Brexit. If compromises are made for a deal with the EU or US that sell them down the river, expect the Conservatives and their media to close ranks and turn on those groups if they start complaining.

Excellent post.

Since 2008, Brits seem to have been made to feel like they don't deserve anything, especially when it comes to investment in education, local and national services, personal reward, etc.

Ever since the crash of 2008, there has been a frightening number of people who bang on about not spending beyond the country's means, reducing the deficit, not expecting pay rises, tightening belts, cutting cloth etc., yet they don't seem to have any problem whatsoever with the top earners multiplying their earnings ten or sometimes a hundred fold in the very same austere times. In fact, as you will see on these very pages, there are people who will happily defend and justify it. It's perverse.

The North of England are still running trains which were supposed to be a temporary measure in the 1980s, but don't upset the billionaires, or tax them too much, they might leave the country with their billions.

But all that was brought out into the open - the stuff about the words on the bus etc all the doom mongers like yourself on the potential downsides of leaving were all known at the time of the GE and still people voted in large numbers for a party that was intent on leaving the EU - as the saying goes "You can fool some all the time, all some of the time but you can't fool all all the time" So what happened?

This post is typical of the left - where meritocracy has no place - we must drag the top down and not the bottom up. If you want the best talent to run your big companies you have to pay them what the market pays - this is a global employment market. Yes you will get some that don't work out but on the whole it works. People don't seem to have a problem paying to watch footballers where the multiple of their earnings to the fans paying to watch them will be stratospheric for what 90 minutes of entertainment - so why is the CEO who actually generates value so despised?

I agree about the trains but that has gone on since Blair - the idea that it takes 1 hour to do the 30 miles from Leeds to Manchester is bonkers. Tax collecting is a delicate balance push it too far and your take is less - I know the top earners 1% of earners paying c30% of the tax is not enough for you but if you push it much more they will find ways around it and who is going to pick up the slack?

Remember, Reasonable Politics is the vowed foe of Politics of Envy.

Quote ="Sal Paradise"If you want the best talent to run your big companies you have to pay them what the market pays - this is a global employment market. Yes you will get some that don't work out but on the whole it works. People don't seem to have a problem paying to watch footballers where the multiple of their earnings to the fans paying to watch them will be stratospheric for what 90 minutes of entertainment - so why is the CEO who actually generates value so despised?'" The key thing there is about generating value. Football fans don't mind players who are good getting high salaries but they soon complain (as do RL fans) when they see a player on a stellar wage who seems to be going through the motions. The problem with the current system is that in some markets there are rent-seekers at the top who are able to earn large profits without delivering a lot, and their senior management is rewarded handsomely for mediocre/poor performance. A number of rail services have been notoriously crap in recent years and the CEOs of the train operator companies are earning huge salaries. Same in the water industry - Michael Gove is hardly a bastion of marxism, but when he was at Defra he called out the water bosses in a speech when they were all in the room. https://www.gov.uk/government/speeches/ ... r-everyone Whatever you think of Gove I recommend reading some of that speech. He lists their salaries (in the millions of pounds per year) as well as mentioning that they've been structuring their companies tax affairs so as not to contribute any corporation tax whilst failing to tackle leaks in pipes and pollution (net result, water consumers have had drought orders imposed on them...in the rainy UK). Property development is another industry where bosses have earned huge salaries and bonuses through taking advantage of land scarcity. Some of the problem is that in some sectors there are warped incentives that mean bosses are rewarded handsomely for taking decisions that end up harming consumers. Banking being a classic example, see the financial crisis. One of the critiques of socialism and big government is that it's easy to be wasteful when you are spending 'other peoples money'. The banking system became based on taking risks with other peoples money, disguising the risk and packaging it on to someone else, and when it all went bust, the taxpayer stepped in to bail out the banks and senior bosses whose decisions had ruined everything ended up getting nice golden handshakes to leave while ordinary people lost their houses and pensions. So the argument that 'the market works' because it creates a meritocracy is a bit of a straw man here. It's not an argument about is capitalism a better system than socialism. It's that in 21st century capitalism, in many markets (by no means all) the market does not work and the reward structure is warped. That is why people who don't mind the idea of people doing well for themselves getting rewarded, are angry about executive pay.

Quote ="Sal Paradise"If you want the best talent to run your big companies you have to pay them what the market pays - this is a global employment market. Yes you will get some that don't work out but on the whole it works. People don't seem to have a problem paying to watch footballers where the multiple of their earnings to the fans paying to watch them will be stratospheric for what 90 minutes of entertainment - so why is the CEO who actually generates value so despised?'" The key thing there is about generating value. Football fans don't mind players who are good getting high salaries but they soon complain (as do RL fans) when they see a player on a stellar wage who seems to be going through the motions. The problem with the current system is that in some markets there are rent-seekers at the top who are able to earn large profits without delivering a lot, and their senior management is rewarded handsomely for mediocre/poor performance. A number of rail services have been notoriously crap in recent years and the CEOs of the train operator companies are earning huge salaries. Same in the water industry - Michael Gove is hardly a bastion of marxism, but when he was at Defra he called out the water bosses in a speech when they were all in the room. https://www.gov.uk/government/speeches/ ... r-everyone Whatever you think of Gove I recommend reading some of that speech. He lists their salaries (in the millions of pounds per year) as well as mentioning that they've been structuring their companies tax affairs so as not to contribute any corporation tax whilst failing to tackle leaks in pipes and pollution (net result, water consumers have had drought orders imposed on them...in the rainy UK). Property development is another industry where bosses have earned huge salaries and bonuses through taking advantage of land scarcity. Some of the problem is that in some sectors there are warped incentives that mean bosses are rewarded handsomely for taking decisions that end up harming consumers. Banking being a classic example, see the financial crisis. One of the critiques of socialism and big government is that it's easy to be wasteful when you are spending 'other peoples money'. The banking system became based on taking risks with other peoples money, disguising the risk and packaging it on to someone else, and when it all went bust, the taxpayer stepped in to bail out the banks and senior bosses whose decisions had ruined everything ended up getting nice golden handshakes to leave while ordinary people lost their houses and pensions. So the argument that 'the market works' because it creates a meritocracy is a bit of a straw man here. It's not an argument about is capitalism a better system than socialism. It's that in 21st century capitalism, in many markets (by no means all) the market does not work and the reward structure is warped. That is why people who don't mind the idea of people doing well for themselves getting rewarded, are angry about executive pay.

Quote ="sally cinnamon"The key thing there is about generating value. Football fans don't mind players who are good getting high salaries but they soon complain (as do RL fans) when they see a player on a stellar wage who seems to be going through the motions. The problem with the current system is that in some markets there are rent-seekers at the top who are able to earn large profits without delivering a lot, and their senior management is rewarded handsomely for mediocre/poor performance. A number of rail services have been notoriously crap in recent years and the CEOs of the train operator companies are earning huge salaries. Same in the water industry - Michael Gove is hardly a bastion of marxism, but when he was at Defra he called out the water bosses in a speech when they were all in the room. https://www.gov.uk/government/speeches/ ... r-everyone Whatever you think of Gove I recommend reading some of that speech. He lists their salaries (in the millions of pounds per year) as well as mentioning that they've been structuring their companies tax affairs so as not to contribute any corporation tax whilst failing to tackle leaks in pipes and pollution (net result, water consumers have had drought orders imposed on them...in the rainy UK). Property development is another industry where bosses have earned huge salaries and bonuses through taking advantage of land scarcity. Some of the problem is that in some sectors there are warped incentives that mean bosses are rewarded handsomely for taking decisions that end up harming consumers. Banking being a classic example, see the financial crisis. One of the critiques of socialism and big government is that it's easy to be wasteful when you are spending 'other peoples money'. The banking system became based on taking risks with other peoples money, disguising the risk and packaging it on to someone else, and when it all went bust, the taxpayer stepped in to bail out the banks and senior bosses whose decisions had ruined everything ended up getting nice golden handshakes to leave while ordinary people lost their houses and pensions. So the argument that 'the market works' because it creates a meritocracy is a bit of a straw man here. It's not an argument about is capitalism a better system than socialism. It's that in 21st century capitalism, in many markets (by no means all) the market does not work and the reward structure is warped. That is why people who don't mind the idea of people doing well for themselves getting rewarded, are angry about executive pay.'" The banking system was a classic Boston Matrix Dog - it had exhausted its traditional market and the margin simply wasn't sufficient to support growth even with consolidation and merger returns had stagnated and other profit opportunities had to found, first they start selling mortgages then they buy merchant banks/stockbrokers etc and the risks get greater as they move out of their comfort zone. I agree about that sector but it is unique given it is almost impossible to allow a mainstream bank to go under. That is the problem of public ownership for me - if you take over Royal Mail for example - it does a pretty good job given the restrictions it operates under - how is the government going to run anymore efficiently especially when it has improved the power of the unions? What happens then when the inevitable happens - you can't close it down you just keep ploughing increasing amounts of public money in. You can't easily reduce headcount when its in public ownership!! The majority of markets work pretty well - the best prosper - the rest fall by the way side. Look at the FTSE 100 from 20 years ago and see how many firms are still in it. There are plenty of opportunity for innovation - how big was Amazon 20 years ago or Google or Facebook. So the question is how do you decide what a CEO get paid - if we suggest the average person gets £30k for an average job whet do you pay a CEO who manages a business that turns over billions, employs ten of thousands what should the multiple be? Seriously how many people have the skill set to run a company that's revenue runs into the billions? Whilst they may be rent-seekers at the top - every business contains plenty of rent-seekers at much lower levels who are stealing a living. Rail is an interesting industry - how much of poor performance is down to those who run the infrastructure? Rail is an incredibly complex inter-dependant industry with timetable adherence subject to other operators behaving correctly, infrastructure maintenance, unions etc.

Quote ="sally cinnamon"The key thing there is about generating value. Football fans don't mind players who are good getting high salaries but they soon complain (as do RL fans) when they see a player on a stellar wage who seems to be going through the motions. The problem with the current system is that in some markets there are rent-seekers at the top who are able to earn large profits without delivering a lot, and their senior management is rewarded handsomely for mediocre/poor performance. A number of rail services have been notoriously crap in recent years and the CEOs of the train operator companies are earning huge salaries. Same in the water industry - Michael Gove is hardly a bastion of marxism, but when he was at Defra he called out the water bosses in a speech when they were all in the room. https://www.gov.uk/government/speeches/ ... r-everyone Whatever you think of Gove I recommend reading some of that speech. He lists their salaries (in the millions of pounds per year) as well as mentioning that they've been structuring their companies tax affairs so as not to contribute any corporation tax whilst failing to tackle leaks in pipes and pollution (net result, water consumers have had drought orders imposed on them...in the rainy UK). Property development is another industry where bosses have earned huge salaries and bonuses through taking advantage of land scarcity. Some of the problem is that in some sectors there are warped incentives that mean bosses are rewarded handsomely for taking decisions that end up harming consumers. Banking being a classic example, see the financial crisis. One of the critiques of socialism and big government is that it's easy to be wasteful when you are spending 'other peoples money'. The banking system became based on taking risks with other peoples money, disguising the risk and packaging it on to someone else, and when it all went bust, the taxpayer stepped in to bail out the banks and senior bosses whose decisions had ruined everything ended up getting nice golden handshakes to leave while ordinary people lost their houses and pensions. So the argument that 'the market works' because it creates a meritocracy is a bit of a straw man here. It's not an argument about is capitalism a better system than socialism. It's that in 21st century capitalism, in many markets (by no means all) the market does not work and the reward structure is warped. That is why people who don't mind the idea of people doing well for themselves getting rewarded, are angry about executive pay.'" The banking system was a classic Boston Matrix Dog - it had exhausted its traditional market and the margin simply wasn't sufficient to support growth even with consolidation and merger returns had stagnated and other profit opportunities had to found, first they start selling mortgages then they buy merchant banks/stockbrokers etc and the risks get greater as they move out of their comfort zone. I agree about that sector but it is unique given it is almost impossible to allow a mainstream bank to go under. That is the problem of public ownership for me - if you take over Royal Mail for example - it does a pretty good job given the restrictions it operates under - how is the government going to run anymore efficiently especially when it has improved the power of the unions? What happens then when the inevitable happens - you can't close it down you just keep ploughing increasing amounts of public money in. You can't easily reduce headcount when its in public ownership!! The majority of markets work pretty well - the best prosper - the rest fall by the way side. Look at the FTSE 100 from 20 years ago and see how many firms are still in it. There are plenty of opportunity for innovation - how big was Amazon 20 years ago or Google or Facebook. So the question is how do you decide what a CEO get paid - if we suggest the average person gets £30k for an average job whet do you pay a CEO who manages a business that turns over billions, employs ten of thousands what should the multiple be? Seriously how many people have the skill set to run a company that's revenue runs into the billions? Whilst they may be rent-seekers at the top - every business contains plenty of rent-seekers at much lower levels who are stealing a living. Rail is an interesting industry - how much of poor performance is down to those who run the infrastructure? Rail is an incredibly complex inter-dependant industry with timetable adherence subject to other operators behaving correctly, infrastructure maintenance, unions etc.

Taking the heat out of it, it isn’t about despising CEOs, it is a feeling that incentives are poorly aligned for the system as a whole.

Poorly aligned incentives aren’t unique to the commercial sector. There was a time when it was reported that the NHS was under pressure to cut the number of people on waiting lists and the only way managers could find to do it was to prioritise quick and easy procedures, sometimes ahead of others for which there was greater clinical need, leading to longer average waiting times. And I have heard anecdotes about teachers, under pressure to improve performance, helping their pupils in tests. The Soviet system knocked out some corkers as well.

Relying on people to do the right thing for all of us when the system is pressurising them to do something different for themselves isn’t going to work. If they don’t game the system, there’ll be somebody else who will to take their place. It is about optimising a system, not changing human nature. Our version of modern Western capitalism is... well, it has its share of exploits and is looking a bit ragged around the edges now to a lot of people, and that has fed into radical politics that, left or right, are a threat to it.

Do you think there’s some sort of balancing mechanism in our system, or a natural limit to growth in income inequality? If you don’t think there is, are you comfortable with ever growing multiples of workers pay for executives?

I guess direction of travel is what turns bubbling resentment into outrage. If things are getting a bit better for most people, then things getting much better for a few at the top might not be much of a concern. If they’re becoming worse for many but still better for the few, there’ll be a greater sense of injustice. If it hadn’t been so obvious that we were not all in it together, things might have turned out differently these last few years!

Very interesting post

How do you measure/quantify the input of any person within an organisation and how is that rewarded? In the commercial world tends to be financial measures: profit growth, share price increase, dividend increase, cash generation i.e. tangible measurable areas.

In my view nobody's pay should be limited - if we go back to the footballers are we saying if you are Lionel Messi - the greatest in the game your pay should not reflect that? You are Ray Dalio - a true analytical genius - your pay should be capped because the gap between them and the receptionist is too large? This to me is a supply and demand proposition - there are a very limited number of people who can run a huge corporation and if you want one of them they command a price. As businesses grow so do the salaries of these individuals.

One thing is certain the average standard of living across the world is much higher than it was 30 years ago - capitalism might have its issues but it has presided over the greatest improvement in living standards since man evolved.

This has been the era of globalisation, the apogee of capitalism: open markets across borders. The interesting thing about this is where the benefit has gone.

Developing countries have seen rapid growth in this period, especially China, India, south east asia, parts of south America. A lot of people in those countries have moved out of subsistence agriculture in to jobs (low-paid by Western standards) where they are now supplying Western consumers.

However, in Western countries, wages for those in the middle and lower middle of the distributions have flatlined. They are now facing competition from overseas labour - either through direct competition when they migrate to Western countries, or even if they don't, through competition with foreign workers through offshoring.

In Western countries there have been huge gains for those at the top end of the wealth distribution, while those in the middle and lower parts have struggled.

Hence the political rejection of capitalism and free markets: Trump, Brexit. Even the Conservative party now has rejected free-market capitalism. Their approach now would horrify Thatcher - rapid rises to minimum wage, wanting to be free from state aid controls so they can use taxpayers' money to subsidise struggling industries, capping energy prices. Northern rail and South Western look likely to be taken under public management.

Who is making the argument for free-market capitalism? The EU do, broadly, other than even there they are restrained by some interest groups (southern European farmers) and so have some protectionist policies.

Assuming we’re sticking with capitalism, i’d go with more progressive taxation vs what we have now rather than capping wages.

The distinction i’d make between Messi (and maybe Danilo, don’t know much about him), and a lot of CEOs, is that he’s walked a path that 1. You have to be exceptional to reach that destination and 2. Is almost equally open to everybody... well, men at least.

The question for me isn’t so much how you measure/quantify the value of work, but [uwho[/u does it. I do see a case for leaving it to an [uefficient[/u market. CEO pay is likely the way it is in part because of the role CEOs have in determining it.

Are you saying the standard of living in the UK and Europe hasn't moved on in the last 30 years? Perhaps the benefits are not just how much you earn it is about how much things cost in comparison or what you get at no individual cost. Improvements in health care increase life expectancy and quality - perhaps some of the benefits have disappeared into drug development which costs billions. Infrastructure is better, we have better roads, we have new technology this all costs huge amounts of development money. Perhaps this is where the levelling off is really happening? Whether you earn minimum wage or millions - the M1 is the M1 - your internet is as good. The drugs you take for your heart condition are identical etc. This is where Capitalism really wins out.

I think your point about Messi is true - if you are exceptional you will make it to the highest level no matter where you come from and there are plenty of examples of that.

CEO's don't start as CEO's someone appoints them and decides what they have to pay usually non-exec directors who understand the market and what they are looking for.

This is probably a semantic point, but are you claiming roads, the internet and healthcare for capitalism?

If the future turns out to be a post-scarcity technological idyll (something like Iain M. Banks Culture with benevolent AIs rather than the Skynet version), then it'll all be moot because money won't matter. And if it goes the other way it'll be moot because our few dozen surviving descendants will be being hunted relentless 8-foot-tall cyborgs.

It is true that the relatively poor live better than the relatively rich of past decades/centuries, in many ways.

To be honest, I don't think much of this discussion is about capitalism vs something else. It is more whether our capitalist system is working as it should or is it distorted and inefficient? Obviously, inevitably, it is the latter to some extent - nobody expects perfection. But in some areas it feels like we're at the 'hang on a minute, WTF?' stage, and that is eliciting political re-alignments. Not all of them efficiently directed, imo, but a lot of people of had enough... of something or other.

In some fields, I think that is much truer than others. The social and practical barriers to becoming a top footballer are low - it is about talent that can be assessed fairly simply. On the other hand, at the top level, like a lot of very, very highly paid work, the societal value seems pretty limited. The market may not make those sorts of judgements, but that doesn't mean we can't judge the market system as lacking, by human standards, for that.

What people are maybe concerned about more is that if you are unexceptional you can do very well just by coming from the right place - there are plenty of examples of that too. Equally, there's a lot of talent wasted because hard-working, gifted people can't overcome irrational barriers in the market.

Across society we want as many people as possible to contribute as much value as possible (and most people, by definition, are not exceptional). A problem I think we have is that too many aren't incentivized to give their best, because they've worked out there's not much point other than altruism, and there's a smaller number for whom there is no need because their success is baked in.



Yeah, their mate, and the favour will no doubt be reciprocated.



Look, I think this comes down to a difference in perception. You think these guys are the best of the best, because otherwise they wouldn't be at the top, so QED. I think a fair proportion of them are... mediocrities who have benefited from a broken system, would be harsh... but nothing special, and easily interchangeable with other competent people. There's the odd visionary I'm sure, there's much more opacity than with football. You can see in real-time why a football team is successful and who is contributing what. And under-performing players are dropped.

The oversight of executive pay by non-executive directors and large shareholders, doesn't seem to work to me, from the little I've seen and read. And, intuitively, it doesn't seem like it should.

I agree with much of your first point - we don't invest and challenge our people - the ridiculous idea that someone shouldn't progress because they are too valuable in their current role happens all the time. We prefer someone else to do the hard lifting for us and we get the finished article - especially for overseas. It is no wonder we don't get the best out of our people. Staff turnover is so expensive.

Whilst I would agree with you will always get some CEO's that are less than brilliant that shouldn't hold be the remunerations of those that are - the sky should be limit on their earnings potential. A good CEO is cheap - like a good sales person.

I broadly agree. And even when I talk about more progressive taxation, I'm not advocating punitive, self-defeating levels.

The key thing is that the market is as open as possible to talent.

And then, a point you've raised a couple of times, how is 'good' judged? Share price seems logical, because the shareholders are the owners and it is easily measured. But then what is a sensible time frame? In some ways, it'd be most just to judge executives over periods longer than some of their tenures, but that isn't practical. So maybe a buy-back to immediately boost the share price appeals more than medium-term investment that would be more valuable. Or maybe the shareholders themselves don't plan on sticking around that long and would prefer the quicker buck.

If we could give an AI a list of priorities for delivering corporate success, I wonder how much they would differ from those of a human CEO?

Given that the AI is programmed by humans and takes human inputs I would suggest quite similar. For me and my business people are what make the difference and those hundreds of daily human interactions are what separate top businesses from average ones. This is even more key the higher up the ladder you go.

If we assume the share price is a predictor of future growth then I would agree but there are many high quality CEO's working in unfashionable industries that don't get the interest of say tech firms. For me its the robustness of the business to withstand set backs, will its cashflows enable it keep going when the market might go against it? Does the business have an appropriate structure, is it well invested etc there are many ways you can judge the performance of a CEO.

I don’t mean a programmable robot, but a genuine (currently hypothetical) sentient AI, free from human desires - including the desire for personal status and remuneration.

Your priorities - positive human interactions, robustness, appropriately structured - all seem nice and sensible. What is interesting to me is what is missing from the list that often seem to be among the non-brochure/prospectus version of corporate priorities.