What would the economic implications of salary capping be?

[Whirliwig72]

Just musing as I dole out fish fingers and smiley faces to my son... If a law were to be brought in making it impossible to earn more than a set amount (say £80k pa) and illegal to sell an asset for more than 4 x times this amount what would the implications be on society? Would it create more or less employment? ... Would people be less motivated to work hard?... Would it make people happier?... Create a more utopian society? Please give me your thoughts....

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).

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.

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.

And the opium's run out...

"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.

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.

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 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.

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

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?'

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.

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?

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.

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.

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.

'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.

Hmm. I don't see what's wrong with comparing Dickensian Britain to Thatcher's Britain, actually. Is your example supposed to prove that Western countries will always have cyclical severe slumps followed by excessive booms and that all Communist countries all eventually become capitalist?

I don't think Stalin counts as all communists.

I agree, the problem with communism is people rather than the theory. That's the problem with capitalism, too.

For those who don't want communism, wouldn't it be a good idea to learn the lessons of history? If you create too great a divide between the haves and have nots and too great a proportion of have nots, then have nots start to get peeved to the point of revolution and then we're all left with a dreadful mess.

The gulf between Thatcher's Britain and the Dickensian squalour and workhouses is immense. Most societies progress over time. All communist dictatorships will eventually fall as they are anti-human, anti-freedom and anti the human spirit, which is why they are so intent on forbidding the spiritual and forbidding the worship of God. They are purely materialistic and allow no spiritual aspects. They are evil and anti-human. Germany suffered hugely but recovered to now be teh powerhouse of Europ, capable of bailing all of Europe out. That would have been impossible if they had fallen prey to that band of middle class communist crooks and charlatans pretending that they were on the side of the proletariat.

Oooh. Let's all hope Germany is capable of bailing us all out. How very capitalist of us.

not.

'I agree, the problem with communism is people rather than the theory'

Communism is tyrannical. That is the only way it can maintain its power and dogma. It extinguishes freedom and allows a small elite gang to determine the lives of millions of people. In East Germany they shot anyone trying to escape to freedom over the Berlin Wall that imprisoned their citizens.

Germany's form of capitalism seems to have been more successful than our own.