Beware Greeks Bearing Gifts

The tactic of the Trojan Horse is by no means a new one. In recent days, there has been a lot of talk about introducing controls on high end pay. Partly, this can be explained by the fact that we are in the long run-up to a general Election, and the undoubted populism that will go with that. Partly, it is a follow on from the Financial Meltdown, and furore over Bankers Bonuses, and the intermingled outcry over MP's Allowances. But, I fear there is a much more sinister reason.

At the moment the talk only seems to surround the high pay of people in top Executive positions. The Labourite Compass Group have been talking about the establishment of a High Pay Commission. Its not clear how the extraordianrily high pay of Pop Stars would be controlled, for example. Would it just mean setting a limit, and then allowing the recording company to make even bigger profits from not having to pay the singers so much? Or would it mean introducing some kind of sliding scale of prices of music so that the more succesful a record, and the more a singer would make from it the lower the price of that son became to reduce the income? Would this High Pay Commission decide how much different footballers were worth, and thereby set the transfer fees accordingly?

Its unlikely. Its unlikely, that any such controls over the high pay of top bosses would be effective either. They never have been in the past, and the bosses State is not going to introduce any measure that would be. Its unlikely that this is really just about the outcry over Bankers Bonuses, or MP's Allowances either. The Norwich By-Election showed that the main reaction of voters was to respond with apathy by staying away from the polls. Even the effect of that in the Euro-elections was contradictory when the furore was at its height. Although, a lot of attention was given to the BNP gaining two Euro seats there performance udner the circumstances was quite poor. In fact, their votes fell. The main beneficiaries were UKIP, but they didn't benefit in Norwich, and its likely that come a Genral Election those votes will just go back to the Tories. In Norwich the fact that the Euro elections represented the peak of the BNP's fortuens was again demonstrated by the fact that had it been a normal turnout their share of the vote would have been less than 1%, and in any case was as abysmal as that of Left candidates, and only a fraction of the vote that went to the Greens. So come a General Election its likely that it is going to be fought out between Labour and Tories on the issues of the economy not peripheral populist gimmicks.

No the real reason for the introduction of a discussion on controlling pay at this moment was hinted at by today's UK inflation figures. As I have said previously once the economy begins to recover, the vast amounts of money pumped into the economy will be circulating at a faster rate, and prices will begin to rise rapidly. Because, the pound is likely to fall in value against currencies such as the Chinese Remnimbi, and otehr Asian economies where many manufactured imports are now produced, and because rising economic activity will begin once again to push up world food prices and other input prices, and because China and those other manufacturing centres are themselves likely to experience rising inflation pushing up the prices of their exports furher, UK inflation will rise sharply.

Again, as I have said previously, this is not something the Government of any complexion will be sorry to see. It is the means by which all Governments throughout history have dealt with any huge amounts of debts they have previously run up. They depreciate the currency, and pay back their creditors with funny money. Three years of 20% inflation would reduce the UK Government's debt in real terms back down to manageable elvels without the need for it to engage in swingeing cuts in Public Spending, which would be likely to threaten economic and social stability. But, in order to pull that trick off they need all those small savers who have their money in Deposit accounts to keep it there where that inflation will wipe out its value. More importanly, they need workers not to respond to the inflation with demands for wage rises that protect them from it.

There is plenty of form for Governments doing this at previous equivalent points of the cycle. They are preparing the ground for the idea that pay should be controlled in order to introduce a Wages Freeze, or other form of Pay Control when that inflation arises. Marxists have always argued against giving the State this kind of power when it comes to things such as imposing bans on fascists, because we know that such power will always be turned against us. We shouldn't be conned into thinking proposals to limit top bosses pay is any different. The best way to control top bosses pay is for workers to demand democratic control over their money in their pension funds that is invested in all these big companies, then WE could determine how much we think they should be paid, as well as determining other things about how OUR money is used by them. In addition we should be directing much of that money to companies wholly owned and controlled by workers, in which as marx showed in Capital in his review of the Lancashire Textile Co-operatives, workers are always able to find good managers willing to work for much less than the extortionate fees paid to them by Capitalist enterprises.