What would the economic implications of salary capping be?

'I'm not yet seeing enough learning from past mistakes, though'

If you are referring to New Labour, then I fear you are correct.

I wish the Tories would stop pretending this country would be in a hugely better state if they had been in power, then, because I really don't believe that and it makes me angry every time I hear it. I agree, Labour did a poor job in power and every time I had to look at Tony Blair during his years in power, I wanted to vomit. I just happen to think the Tories would have done an appallingly bad job, too - they would have allowed just as much runaway greed in the City and big corporations and would have run down public services into the bargain in tax reduction strategies foolishly designed to encourage the overweening greed of big business and finance at the expense of the small fry in other less immediately profitable sectors. Neither party had any sensible vision for the long term.

I do agree that this is all water under the bridge, now, though, and that therefore parties should be judged on what their long term aims and strategies are going forward, rather than on what they have done in the past. I'm not yet seeing enough learning from past mistakes, though.

Totally agree Rabbit. From a banking perspective I don't think for a minute the Tories would have done anything differently.

But at the end of the day it's all speculation since they were not the party in charge and not by a long shot.

The only regulation banks need is to be forced to hold a proper amount of capital that is comensurate with the risk they are taking and remove the implicit or explicit Govt guarantees on deposits. The only deposits that should be guaranteed are those deposited in National Savings.

That would mean that suddenly banks would have to pay the full market price for their capital and would dramatically reduce their profits and the pay and bonus of bankers.

Let us give the Tories a little bit of credit. You may be right, but at least the Coalition is now getting to grips with the regulation.

America's regulation wasn't good enough to prevent the moral hazard, either, yet you do keep referring to that as superior. I seriously doubt the Tories would have introduced heavier regulation in the UK than that applied in the US - in fact, I suspect they would have been lighter touch, too, in an attempt to attract yet more people to the City of London. I'm sure the Tories would have loved an even bigger financial sector than we already had at the time of the crash, resulting in even more of a headache for the rest of the UK even if the regulation had been a bit "heavier." The only real difference would have been that the Tories would also have reduced tax, making this a low tax, low regulation haven for the financial industry. I also don't think the Tories would have done much to improve things for manufacturing or other sectors, either, because they appeared to be just as enamoured of the apparent success of the City as Labour was and just as much in its thrall.

Exactly and that is why 'light-touch regulation' was not good enough to prevent the moral hazard that led to the astronomical public bailout of private banks.

But reward people too much to take risks at someone else's expense rather than their own and you remove people from an area of the economy where their skills might be of more genuine use and plonk them somewhere less useful in the long term. There are plenty of people in the City who could be making this country more competitive in engineering, or research, or manufacturing, or setting up new businesses etc, etc, but they made the decision not to take the risk or the lower pay if they didn't have to.

Yes and that is a free choice they make. We don't live in a world where every job pays the same and requires the same skills. Most people can't afford to do what they like such as write poetry; they train and educate themselves to work in areas of high demand where they are well rewarded.

Lots of people choose highly paid professions rather than less well paid work not because they really want to do the job, but because their prime motivation is to ensure their offspring get the biggest leg possible up the ladder. Public schools and after school activities that look good on university application forms do not come cheap. I worked with a lot of people (in the law) who hated their jobs but appeared to feel trapped in them because they wouldn't get paid half so much elsewhere.

'manual workers perform services that are unprofitable for them'

manual workers don't work for nothing, they work for their own profit - to earn money.

'People should do what they like'

But many people like to make money. That is often the driving force for people to take the risks involved in creating their own businesses. It's a free country and people can choose to work for money or to work on something they like.

Of course, manual workers perform services that are unprofitable for them because that's the only way their services can be profitable for someone else.

Yes those are the issues that people vote on in free elections. The people decide on the balance and choose politicians who reflect their opinions. People get wise to the spin of the spin doctors and make their own decisions on what is best for them and society. The spinners often dislike the people's judgement, but the spinners have to abide by the rules of democracy.

(I mean, of course, without encouraging the lazy and selfish to be lazy and selfish! Encouraging them not to be lazy and selfish would be a good thing....).

I think when people do a job solely for financial reasons they end up doing it badly. People should do what they like or are good at and take whatever salary the labour market dictates. It baffles me that the most desired jobs also have the highest pay.

I think for most people, the argument is over how to help and support the weak without encouraging the lazy and selfish; and how to encourage the ambitious without encouraging the excessively ruthless. And how to make those people in society who perform essential, but essentially unprofitable activities, feel valued, respected and appreciated. How you would go about getting the balance right is not a science, it's an art.

Tax isn't a bad thing if the money is wisely spent - even tax at relatively high levels. I appreciate the roads and cleansing services and hospitals and schools that tax money provides. I would not like to return to the days when education was only provided to those who could afford it and to a minority who appealed to small charities. Those who want to minimise tax seem to be excessively confident that we won't one day end up back in the situation where the poor could actually starve or freeze to death, or die of easily treatable diseases.

rabbitstew, you are right - no system is perfect, and a system that had 'light-touch regulation' that allowed bankers to take unchecked risks that led to collapse and huge public bailouts is certainly not perfect. We need to correct teh system, introduce much better targetted regulation to prevent this happening again and the deregulation of teh financial markets needs to revised.

But all of our systems work on a form of capitalism. Socialists in western countries also subscribe to the capitalist economic system with stock markets etc. We need to regulate and reform capitalism. But socialists who argue that we need to scrap capitalism will lead us to the slavery of the Soviet Socialist Republics.

i wonder if it would have any implication for taxation levels? The tax people would have paid on the money over 80k would still need to come from somewhere, so i wonder if the tax rates would have to rise?

Now, that's a more helpful argument. No system is perfect, so people should stop accusing those who want to question the status quo of being entirely anti all capitalist principles. It isn't a choice between communism and capitalism, since there isn't a single country in the world that has ever had a pure form of either.

But some systems are better than others. It's a matter of degree. The overriding factor is liberty and freedom from tyranny. There is no heaven on earth, but free democratic capitalist countries are further from hell than communist tyrannies.

All systems are about power and who gets it. All systems are therefore a con, because they all claim to give more people more power than the other systems do (apart from religion, which is just abused by power seeking people claiming they are closer to God than everyone else).

Of course China is not communist. Communism is a common con. It is about power and the decption of the proletariat by a small ruling elite.

'And that's because big business can cope better with regulation.'

Exactly. It is sometimes the case that big business lobbyists persuade regulators to impose green type regulations on small businesse which harm the competitiveness of small business and favour big business with its big pockets.