excellent piece. could not agree more.

Is it timely to consider the benefits of Mitbestimmung in German companies and whether that is too radical a prescription for Britain?

“In 1974, a general law was passed mandating that worker representatives hold seats on the boards of all companies employing over 500 people.”
http://en.wikipedia.org/wiki/Co-determination#German_Mitbestimmung

Try this: Hay group – How Chief Executives are paid (January 2008)
http://www.haygroup.com/downloads/uk/How_chief_executives_are_paid_30.11.07.pdf

But why only blame companies?

“New Research Reveals 43% Council Chief Executives Paid More Than PM”
http://www.egovmonitor.com/node/40748

You’re being unkind. He IS tackling the disproportionate power and lack of responsibility of Incapacity Benefit claimants who are bringing society down because they can all do some work yet refuse to do so. I know this last bit because a bloke in a pub told me.

Enemy within, claimants under the bed etc

@3…I never said that, I was just being ironical and all that, you know like that Jimmy Carr, or Ricky Gervais or Jim Davidson.

“Although the word “responsibility” appears 27 times in his speech, there’s one word he never uses – power.”

I used to think Orwell was kidding but really it seems he was right about the future

“Rising top pay is attributed not to bosses’ power to extract rent from shareholders and workers, but instead to a lack of “values of responsibility“.”

I am sorry but how precisely can bosses extract rent from either? Either workers are paid what they are worth or they go elsewhere. Shareholders elect bosses. In so far as there is a risk here, the solution is simple and obvious – make all changes in the real renumeration of management dependent on a vote of all shareholders at the AGM.

“Windy moralizing thus displaces any recognition of a key fact about capitalism – that it generates inequalities of power.”

The real world generates inequalities of power. It is not obvious to me that capitalism does. This sounds like a theological statement rather than one of fact.

“Given this, it is no wonder that Miliband’s policy proposals are feeble. He says that “we also need to recognise – as many great companies do—that firms are accountable to their workers as well as their shareholders”.”

I agree that is feeble. But mainly because there is no reason to think it is true. How are companies accountable to their workers?

“There’s no acknowledgement that New Labour failed to challenge the power of bosses – and, indeed, helped to entrench and legitimate that power insofar as it bought into the ideological fiction of the magic of leadership.”

I don’t think, looking at modern Britain, any sensible person can say that the magic of leadership is a fiction. Especially in an article criticising Milliband for his lack of leadership. It obviously matters to the author when it comes to the Labour party. Why doesn’t it matter elsewhere?

“The fact is, though, that bosses pay themselves a fortune not because they are especially bad people, but because they can.”

As does everyone else who can – Union bosses, heads of NGOs and so on. I bet the leaders of Greenpeace aren’t short a quid. So what? The question is whether people are accountable to the other people whose money it is. The shareholders in the case of management. They are.

“Miliband’s failure to see this represents a blindness about the nature of power in capitalist society.”

So every issue involves a jackboot on someone else’s face does it?

John Healey tried to whitewash Labour’s record of using private contractors in health on Today this morning. No mention of the gross waste of the ISTC policy.

The failures outlined in the OP and Healey’s blather are disconcerting for those of us who wanted the New Labour “project” to be abandoned. It’s beginning to look as though Miliband is happy to have a mere fag-paper’s breadth between Labour and the tories.

Can we expect tone rather than substance from now on?

I think this is a wee bit unfair; Miliband’s ‘windy moralizing’ in this speech has to be seen in the context of policies he’s either floated (e.g. making cuts in corporation tax conditional on paying at least the Living Wage to all employees) or committed himself to (e.g. keeping the 50p tax rate, taxing excessive bonus payments). Those do seem to me to be policies that promote greater income equality.

Genuine question: what sort of ‘concrete measures’ do you think Miliband should be using to curb bosses’ power?

I hardly think that it would be wise for Ed M to criticise capitalism in a major policy speech. I agree with you that all this focus on ‘responsibility’ is essentially empty moralising, but I don’t think that is how the general public will perceive it. I actually think it’s a good speech that hits the right notes, even if it does not provide concrete solutions.

To be fair to Milliband, he is only able to formulate ideas roughly around the epicentre of where the political Consensus lies. Milliband may be the leader of the Labour Party, but he is my no stretch of the imagination, the leader of the Left.

Whether we like it or not, the debate around rich vs poor and been framed around tinkering around the edges and shying away from getting to the heart of the issue, as the OP correctly points out the shift in power from labour to capital. The Left have witnessed this shift in the last thirty years and have refused to engage in the debates.

A couple of examples:

Some time ago, a few back actually, there was a debate here on workers rights and many of the familiar tropes were trotted out. The story of the waitress who customers ‘do a runner’ has her pay docked for the entire meal, the cleaner who is expected to buy her own personal protective clothing and the agency worker who has an ‘administration fee’ deducted from her wages every week. That type of thing, the type of thing you could hear in any pub in the Country, or at least the working class pubs.

The general Consensus among the contributors to the ‘UK’s most popular left of centre political blog’ was that it was so bad we needed a ‘voluntary code of conduct’ or something along the lines of ‘the fair trade’ movement.

Nobody appeared to notice that these practices showed to what extent the power shift from one group of society to the wealthier part of society. Okay, fast forward to the end of last year or the beginning of this year, not too sure which.

This time the discussion was about the number of women make to the boardrooms. Few people where happy that we might have certificates on walls or logos on packaging with a few ‘suggestions’ and ‘memoranda of intent’ or helpful nudges in the right direction, nope an acknowledgement of wrong behaviour and legislation to correct was required to the extent that ‘Quotas’ would help solve the problem.

Because this is exactly where the Left go wrong, we feel that if we point out anything too radical it will blow up in our faces, except when the people at the sharp end of the debate are nice middle class women, looking through the glass ceiling. The Toilet cleaner with a skin complaint? Meh, she got the minimum wage, what more does she want? The head of marketing, who got looked over for a thirty grand promotion? Oh, the injustice!

Come on, guys, don’t blame Milliband for being forced to accept that the corporate World frame the debate. Look around and ask why the debate has moved so far to the right in the first place.

I think we can be sure that, come the next election, Miliband’s tax proposals will be denounced in all the Press (apart from the usual suspects) as an unwarranted attack on enterprise, freedom, decency etc.

Despite a shaky grasp of economics, SMFS [5] has a good grasp of political reality: it would be nice to believe that the abuse of power is somehow a vice of capitalism, but that’s only what it would be nice to believe. In my experience power structures exist because people are emotionally defective and crave them (the Good Breast, if you happen to be a Kleinian therapist, but there are many other analogies if that one offends) – why, after all, do we prefer representative to direct democracy?

@ 10

“why, after all, do we prefer representative to direct democracy?”

Because we don’t live in Periclean Athens perhaps?

Direct democracy may actually be more plausible with modern technology if you’re happy to see politics reduced to a glorified X-Factor (*other dreadful TV analogies are available). The reason people have been suspicious of direct democracy is that it has a tendency to towards a Hobbesian “will of all”.

Even in places like Periclean Athens, the concept of direct democracy only worked because the exclusively male citizens entitled to vote had the leisure time to be involved in politcs because of the slaves and non-Athenian metics doing all the actual work.

You don’t have to be emotionally defective, or crave authority, to think that sometimes it is better to have people represent your views, rather than have delegates who are directed to vote in a particular way.

‘Either workers are paid what they are worth or they go elsewhere.’

Sure, they can take up one of the millions of well paid jobs employers are desperate to fill.

[10] Well, that’s the answer the politics textbooks give. The referendum campaign would seem to suggest that the lower the common denominator a campaign can find, the more success it will have. And broadly speaking, the left appeals to fear while the right appeals to fear and greed both. Hence the Platonist aspirations of socialists like Chris Dillow and I – yet we also want to be democrats. Are we incoherent?

@12 Exactly – they are being paid what they are worth.

[10] Well, that’s the answer the politics textbooks give. The referendum campaign would seem to suggest that the lower the common denominator a campaign can find, the more success it will have. And broadly speaking, the left appeals to fear while the right appeals to fear and greed both. Hence the Platonist aspirations of socialists like Chris Dillow and I – yet we also want to be democrats. Are we incoherent?

ISTM democracy isn’t / shouldn’t be an end in itself but a means to an end – that end being, say, “Life, Liberty and the pursuit of Happiness”. It’s fine to desire some form of democracy while recognising that taking democracy to the extreme (e.g. referendums on every decision) may result in illiberalism and unhappiness. We have elected representatives to legislate, mediate political disputes, and hold the executive to account. We have checks and balances to mitigate risks. When we use the word ‘democracy’ to describe a system of government it is an abbreviation of something necessarily more complex than the X-Factor voting system. So no, you are not being incoherent when you want to be a democrat but don’t want particular outcomes.

More empirics anyone?

With Mitbestimmung (see @2 above), income is more equally distributed in Germany than in the UK in all the studies that I’ve found online. The studies usually report a Gini coefficient of between 28 to 30 for Germany and 34 to 36 for the UK — where 0 represents perfect equality of distribution and 100 as perfect inequality.

See, for example, this source from: OECD Society At A Glance:
http://www.oecd.org/document/24/0,3746,en_2649_34637_2671576_1_1_1_1,00.html

Readers will need to scroll down.

Of course, Mitbestimmung may not be the only or main contributing cause.

Germany, famously, has long had a much better infrastructure for bringing on industrial vocational skills going back to the early 1950s and West Germany also greatly benefited from the inflow of millions of skilled refugees coming over from Eastern Europe until the Berlin Wall was built in 1961.

But one important insight is that by this source, General Government Expenditures as a percentage of national GDP was lower for Germany than for the UK in recent years:

OECD National Accounts At A Glance 2011 (forthcoming)
http://www.etui.org/en/content/download/14316/76037/version/1/file/OECD+-+Brussels+2011.pdf

Readers will need to scroll down again.