High Pay Commission

The High Pay Commission have published their final report. Truly these people live in an alternate reality. The misconceptions are so dense it’s unfiskable. I’ll try with just one paragraph.

Further, our investigation has found that top pay is a symptom of market failure based on a misunderstanding of how markets work at their best.

Markets work at their best when people can trade freely.

Within companies, fair pay matters. It affects productivity, employee engagement

If it is true, free markets will discover it. The best performing companies will be the ones with the fairest pay. No commission needed.

and trust in our businesses.

This is a matter for the customers. In a free market, if they don’t trust a business, they don’t have to do business with it.

Pay in publicly listed companies sets a precedent;

That doesn’t make any sense. Pay is the result of negotiations in a free market; A’s pay is not influenced by B’s: both are affected by the presence of A and B negotiating in the market.

when it is patently not linked to performance, or rewards failure

In a free market, no-one is rewarded for failure. By definition, no-one voluntarily pays for something they do not want.

it sends out the wrong message

It is not a message. It is a transaction between private individuals.

and is clearly a symptom of a poor functioning market.

If people are paying for things they don’t want, then they cannot be doing so voluntarily, so yes, the market would be performing poorly. But the High Pay Commission does not agree with the decisions on pay that are voluntarily made.

In addition, high levels of inequality in income contribute to sectoral imbalances, regional disparities and asset bubble inflation.

Where to start? Inequality is measured wrong, anyway. Wealth is not proportional to money. The top 1% might have diamond encrusted watches, but a cheap Casio still tells the time. I don’t know what a sectoral imbalance is, but it’s probably to do with teachers getting smaller pay rises than the CEO of BP. In a free market, the top teachers might well get pay rises as big as the top executives. But then they’d be in the same sector. Regional disparities are probably caused by a combination of planning regulations and the plain fact that productivity increases with population density. Asset bubble inflation is caused by government policy that props up asset bubbles, like bailouts and manipulation of interest rates. None of this has bugger all to do with the CEO of BP’s £4.5m salary which, frankly, doesn’t even sound all that much.

I’m exhausted, and goes on like this for 65 pages.

Oh, here’s an enlightening quote:

“You have to realise: if I had been paid 50% more, I would not have done it better. If I had been paid 50% less, then I would not have done it worse.” –
Jeroen van der Veer, Former CEO of Royal Dutch Shell

This is probably true, and completely irrelevant. If they’d been prepared to pay 50% more, they could have hired someone else who was better.

The Power of SF

This is from an interview with William Gibson (H/T Michael Jennings):

It gave me the idea that you could question anything, that it was possible to question anything at all. You could question religion, you could question your own culture’s most basic assumptions. That was just unheard of—where else could I have gotten it? You know, to be thirteen years old and get your brain plugged directly into Philip K. Dick’s brain!

That wasn’t the way science fiction advertised itself, of course. The self-advertisement was: Technology! The world of the future! Educational! Learn about science! It didn’t tell you that it would jack your kid into this weird malcontent urban literary universe and serve as the gateway drug to J. G. Ballard.

And nobody knew. The people at the high school didn’t know, your parents didn’t know. Nobody knew that I had discovered this window into all kinds of alien ways of thinking that wouldn’t have been at all acceptable to the people who ran that little world I lived in.

I love the idea that SF is so subversive. I experienced it too, around the same age, but I didn’t realise at the time what was happening, and I don’t think I realised it since until Gibson pointed it out to me. There does seem to be a correlation between SF fans and, say, libertarians, who are certainly in the habit of asking more questions about the world than most people. But I don’t think it occurred to me that SF was the *cause*. Perhaps, to an extent, it is.