Who will rescue capitalism? As the voices of its critics grow louder, those of us who would defend the moneymakers must not be cowed. But even the most ardent supporters of the profit motive would probably concede that capitalism has been veering in the wrong direction, providing sufficient ammunition for its detractors to raise doubts over the sustainability of the system itself. With public anger over bankers, in particular, and ‘fat cats’ in general, politicians — of all parties — have seen an opportunity to empathise with demonstrators’ banners and the shrieking from the media.
Warm, even occasionally wise, words have flowed, defining how capitalism should be. David Cameron wants it to be ‘fair’; Ed Miliband wants it to be ‘responsible’; and Nick Clegg favours the John Lewis variety. All admirable sentiments, but just try legislating for such ideals — let alone policing them. That is why, after almost every minister and backbencher have had their say, all that is promised is tougher rules on transparency of boardroom pay and yet another look at empowering shareholders.
Even Vince Cable’s much-hyped proposals have been greeted with relative sanguinity by business. Calls for more transparency are themselves easily seen through: enough information is already available for the High Pay Commission to report that, in the past decade, the average remuneration of a FTSE 100 chief executive rose from 69 times that of the average worker to 145 times. The ensuing publicity did nothing to halt a trend which is now set to take the ratio to 214 times over the next ten years. Giving more power to shareholders is unlikely to produce a speedy change. The institutional investors who own most of corporate Britain demonstrate pitifully little enthusiasm for engaging in such issues.
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