[A-List] Bring the rich to heel
shimogamo at attglobal.net
Mon Sep 6 23:24:58 MDT 2004
New Statesman Leader (September 06 2004)
Remember Thatcher and Reagan! That is what the rich should be saying
to themselves as they watch the Conrad Black drama unfold, with its
breathtaking tales of a man who charged his wife's birthday parties,
handbags and jogging attire, to say nothing of his own private jets and
Rolls-Royce repairs, to company accounts. There is, after all, nothing
unusual in what Lord Black did, except perhaps in its sheer lavishness.
Owners of private companies charge all sorts of "expenses" to their
business accounts. Many pay their wives or mistresses "wages" for doing
nothing, as Lord Black did. But he, while retaining control, sold most
of the equity to outside shareholders - "little people", as he saw them,
who should have been grateful to be allowed a share of his glittering
success. "This is my company", he hissed whenever a fellow director
questioned him. A good thing, too, some commentators would argue, since
the traditional, private firm (often a family firm) tends to take a more
long-term view than the company owned by institutional shareholders who
go in and out for a quick profit. Some would also argue that the high
rewards of an entrepreneur such as Conrad Black are more defensible than
those of a hired company executive.
None of this will wash, because the behaviour of rich people
increasingly outrages the public's sense of decency and proportion.
The rich - whether we talk about Lord Black or the creative accountants
of Enron and WorldCom or the directors of publicly quoted UK-based
companies such as BSkyB, Vodafone and Carlton, with their multimillion-
pound remuneration packages - look greedy and hubristic. They pocket
excessive rewards just because they can. In the same way, unions in the
1970s, at least in the public eye, went beyond the acceptable. Though
most used their power with moderation and care (and employers held the
upper hand even then), the behaviour of a minority opened the way to
right-wing governments, determined to weaken unions and to curb their
power. Throughout the western world, unions are now more or less a spent
Sooner or later, a Margaret Thatcher or Ronald Reagan of the left will
come forward to harness public outrage against the rich as surely as it
was once harnessed against organised workers. After all, it is now the
bosses who look like a tightly knit conspiracy, heedless of everybody
else's interests. Lord Black got away with it because other well-off
people, running the auditors KPMG and the law firm Torys, as well as
members of his company's audit committee, chose to turn a blind eye.
Likewise, the excessive remuneration of company directors is routinely
decided by other directors sitting on each other's boards. Nobody can
now argue that such behaviour is victimless or economically trivial.
Through pension funds and life assurance schemes, millions have their
savings invested in companies such as Lord Black's. The damage caused by
corporate extravagance and malfeasance is far greater than any temporary
inconvenience caused by a transport or rubbish strike. And if the
allegations against Lord Black are true, he has hurt ordinary people as
grievously as a burglar who breaks into a house at night and makes off
with the family valuables. Indeed, given the decline in the burglary
rate, the average homeowner today probably loses more to corporate
sharks than he or she does to burglars.
At one time, it was argued that if the rich were expropriated, it would
make little difference in the greater scheme of things. That is no
longer so. If the richest 400 people in the United States were to give
up 1 per cent of their wealth, it would be enough to provide clean
drinking water for the entire world. It would cost about £1bn to
immunise every child on the planet against the main life-threatening
diseases; the £110m in annual remuneration that goes to the UK's 20
highest-earning executives (the ones we know about in publicly quoted
companies, that is) would make a sizeable dent in that.
The rich should not imagine that their party can go on for ever. The
privileges of limited company liability are as much in the gift of the
state as were the privileges of the unions. They, too, can be removed,
or at least modified or more tightly regulated. Taxes can be levied at
more punitive rates and loopholes closed. The cultural climate still
favours the rich mainly because the idea that they are "wealth creators"
for us all has stuck. But conservatives such as Thatcher, Reagan and now
George W Bush persuaded millions to vote for them in defiance of their
own best interests. It would not be too difficult for a left-wing
equivalent to persuade people that they should take a risk on the
supposed costs to enterprise and bring the rich to heel.
Copyright New Statesman 1913 - 2004
Please also see:-
by Doug Dowd, ZNet Commentary (August 08 2004)
"Unveiling the corporate greed market"
by Jim Hightower, Common Sense Commentaries (August 2-6, 2004)
"America's Disease is Greed"
by Andrew Greeley, Chicago Sun Times (August 20 2004)
Bill Totten http://www.ashisuto.co.jp/english/
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