What would the economic implications of salary capping be?

'Would communism ever have come into being if life weren't utter shit for most people in the countries where it took hold? I don't think revolutions normally occur in well run, happy places.'

Revolutions come about due to dedicated bands of political activists and revolutionaries, usually middle class or upper class, who pretend that they are on the side of the proletariat, and then proceed to send millions of them to their deaths in gulags and incarcerate any who challenge their dictatorial regime. The tsar was nowhere near as bad and was responsible for nowhere near as much starvation and killing as the band of middle class communists.

I don't understand your safety in numbers comment.

You are probably right in that communism may not have taken hold if the country was a well run happy place.

So firstly that tells me that our countries on balance are happier and better run (but far from perfect). Hence the real lack of desire to move to communism.

Secondly communism is great in theory. I cannot argue with the principle of it at all. And when the time comes where humans are flawless and selfless then it will work. Until then it's a ideal which is sadly let down by us humans.

No, Russia has suffered a lot. But there is no point comparing Gorbachev's Russia with Tsarist Russia, just as it would be pointless comparing Dickensian Britain to Thatcher's Britain. Let's compare the Soviets with the West. Germany in the 1920s suffered the worst hyperinflation ever seen, much worse than anything in Russia.

Would communism ever have come into being if life weren't utter shit for most people in the countries where it took hold? I don't think revolutions normally occur in well run, happy places.

Well, there is such a thing as safety in numbers...

Wouldn't it be better to compare Tzarist Russia with Communist Russia? Or Communist Russia with present day Russia? Has Russia ever been a great place to live for the vast majority?

'What does "poor person" mean in a communist country?'

Everyone except the nomenklatura.
The people in the Soviet Union queueing round the block for a slice of bacon while the nomenlatura wine and dine in lavish fashion.

And of course, being a competitive race got us into world wars, cold wars, recessions and depressions.

What does "poor person" mean in a communist country?

If only it were that simple. Some perfectly intelligent people don't like the "game." And the "mediocre" are still fellow human beings being forced to run around in someone else's exploitative hamster wheel. And some intelligent, ruthless game players are nasty little shits who like to break or change all the rules they can get away with, which takes the fun away from those who might otherwise enjoy it.

Actually I do see some parallels between a communist government where the favoured few have all the power & money and a capitalist country where the rich have much and the poor have....much less.

In reality we don't have a truly capitalist economy since the government does intervene in many areas.

But let's forget that bit for a moment and imagine you can have one or the other.

Which one would you rather be a poor person in?

What I mean is. Would you rather be poor in the USA/UK/Germany? Or poor in Cuba/North Korea or China/Russia (before they adopted capitalist economies).

If you couldn't sell an asset at more than 4x £80k how would we sell things like ships and factories and machinery and things like that?

I remember the 99% UK tax rate days. i remember my fairly modestly paid doctor father paying 66% tax on his NHS earnings and another 15% on top of that - ie over 80% tax on building society interst. It didn't work then and it didn't work now. The country has never been in such a mess.

People are made to fight tooth and claw and with some better at things than others. It's how we survived. It's why we are here not the neanderthals. We are a competitive race and the competitoin is huge fun whether you're female or male. Take that away and we move to where it is possible to engage in the game. Make the £80k rule planet wide and people would just get round it or swap things that aren't money. The bottom line is most people are mediocre and the average IQ is only 100 and some aren't,. Some will do better and some won't and some are as lazy as sin and still expect to be kept by the state.

"Making rich people poorer doesn't make poor people richer".

I agree. However, observing the way corporations and banks behave and the way top bosses and banker pay and bonuses work it is true to say that:

"Making poor people poorer make rich people richer".

By dropping interest rates to near zero to help banks the Bank of England has made poor people like pensioners even poorer as their income on savings has dropped while bankers have seen their pay and bonus rocket as bank profits have surged in the low interest environment. Moreover, by slashing pay and jobs to cut costs corporations have made working people poorer while chief executives have got bigger bonuses as corporate profits have surged.

It is that issue that is why people feel so revolted by the huge pay and bonuses being paid out.

And the opium's run out...

And about giving opium to the masses... whether literally or in the form of inflated house prices. It all backfires on us in the end.

Power corrupts and absolute power corrupts absolutely. It doesn't matter whether it's religion, capitalism or communism, their greatest ideas and principles are all wrecked by power hungry human beings intent on getting a bigger share of the cake than anyone else. At the moment, the pendulum has swung too far towards uncontrolled capitalism. The market is not free and it is not all about supply and demand - it's about abuse of power, supply and demand.

I always thought that the definition of communism was that everyone was equal, it was just that some were more equal than others (like the nomenklatur and the politburo for starters with their Zil limousines and their exclusive shops).

^">Making rich people poorer doesn't make poor people richer

Actually, it can do exactly that. All the money which is rewarded to the very top earners in the form of bonuses which are rewarded to them regardless of performance (and this practice is widespread), detracts from the corporate budget which could otherwise be spent on those at the bottom end of the payscale."^

Or, alternatively, capping peoples wages will result in a higher dividend to the shareholders. Anyone with an ounce of common sense (and a decent accountant) will take most of their remuneration through share dividends and the world will carry on spinning just as it always has done.

The left have consistently failed to realise that low skilled people will only ever be paid what low skilled people are worth whilst the higher skilled people, who are on a better income anyway, are the ones who can afford the accountants.

Making life too difficult for the rich means they upsticks and leave - just like they did in the 1970's. To make up for the disproportionate rates of tax that they pay pushes the tax bill up for everyone else. The original point stands, "Making rich people poorer doesn't make poor people richer".

the reality of wannabe communist states was just like that though...or more extreme...communist party members having enough to eat, and their neighbours starving...

to be fair those weren't truly communist countries, but then the UK isn't truly capitalist either.

I'm sure by 'Communist' you're referring to North Korea and Stalinist USSR.

The anti-Capitalist, pro-democracy world-wide movement we're seeing today is not just democratic, but anti-authoritarian to a fault.

The movement aims to create true democracy, in both the political and economic sphere. Its aims are the opposite of authoritarianism. You have nothing to fear from them.

Besides, you talk about communist states being just like that: common man gets poor standard of living whilst the bosses get loads of treats?

Really, isn't that exactly what happens under Capitalism? Wealth inequality has never been greater, and most of the world lives in poverty. The former middle-classes are now under attack from neo-liberalism, putting them into perilous economic situation of stagnating wages and job insecurity. The 1% own about 1/3 of the world's wealth. The next 20% own about 50%.

So how is that statement NOT like Capitalism? It describes it perfectly.

claig-

You're confusing communism with capitalism.

Then why don't the public vote for communism? They always choose capitalism en masse because it provides freedom, growth and prosperity,

It doesn't matter who the public vote for, they'll still get neo-liberal Capitalism, as elections have shown. There is no accountability in government. 50% of Tory party funding comes from the City - which is less than .1% of the population as a whole. Parties don't even feel obliged to follow their manifesto anymore - just as we've seen the tripling of tuition fees and a radical shake up of the NHS. Politicians made 'cast-iron guarantees' against these things when they ran for office.

The band of communists can never win a free election, which is why they are often revolutionaries who believe in force.

Anyone who wants to change the economic system so that it benefits the majority rather than a tiny minority will be strongly fought against by the ruling class: in the media, through funding, through smears, through lies, though dirty tricks, and even sometimes through violence.

When the large swathes of former middle-class people find themselves so shafted that they can't even afford their mortgage, the bills, or to pay for food for their family, then the public themselves will rise up in violence against the state.

We've seen plenty of civil disobedience already, as the crises and contradictions of Capitalism get worse and worse. Expect much more of this in the future.

..and the thing that would prevent stupid house prices would be sensible planning laws to allow enough houses to get built to meet supply.

i digress again.

a lower paying job :) my job is pretty low paid already!

you can always ask 'what ifs' - fact is telling people that the old 3* salary standard is in some way 'right' is daft. that was the standard that told many people they couldn't afford mortgage where the repayments would be less than their current rent...

but i digress.

What if they changed the income supplementation or you had to take a lower paying job or interest rates went up?

It was ludicrously unsustainable to allow people to borrow 6 x salary

i have been paying a mortgage of 13* my salary for the last 3 years. (assisted by various income supplementations from the govt)

why is this ludicrously unsustainable?

If top salaries were limited in that way some high paid people would leave the UK and some would go part time to keep below the £80k limit. The employers who need high paid staff would get round the problem by employ 2, 3 or more people doing bits of the job but the same total amount of work and end up paying the same as before.

What I would like to see is people at the top of the civil servicee being paid properly for the work they do and Govt not just handing over whatever someone demands for the job. I also want shareholders to be given real power to vote down executive pay packages in the private sector.

Other than that we don't need wage controls. It didn't work the last time we tried it in the UK.

There shoudl be no limit on asset prices but a limit on what people are allowed to borrow against their salaries to buy houses. It was ludicrously unsustainable to allow people to borrow 6 x salary. There are countries with hard limits on allowable lending multiples and it prevented house price bubbles as a result.

'> 'isn't there lots of fiddling going on with communism whereby the common man gets poor standard of living whilst the bosses get loads of treats?'

You're confusing communism with capitalism.'

Then why don't the public vote for communism? They always choose capitalism en masse because it provides freedom, growth and prosperity, The band of communists can never win a free election, which is why they are often revolutionaries who believe in force.