It is a cliché that the Labour party owes more to Methodism than to Marxism. Today’s speech by Ed Miliband highlights the witless vacuity that this can lead to. He says “we have to tackle the new inequality in this country between the top and everyone else.” And he complains that “over the last twelve years Chief Executive pay in Britain’s top companies has quadrupled while share prices have remained flat.”
So far, so good.
But why has inequality increased?
Here, Miliband fails atrociously. Although the word “responsibility” appears 27 times in his speech, there’s one word he never uses - power. 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“. Windy moralizing thus displaces any recognition of a key fact about capitalism - that it generates inequalities of power.
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”. But the nearest he gets to a concrete measure to achieve this is to propose that an employee sits on remuneration committees. Otherwise, his main idea is for firms to publish the ratios of top to average pay - as if a day of bad headlines will be sufficient to curb bosses’ excesses.
In the same spirit, his complaint about New Labour is about messages and morality: “we did not do enough to change the ethic we inherited from the 1980s” and “we sent out the wrong message to those at the top of society”. 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.
The fact is, though, that bosses pay themselves a fortune not because they are especially bad people, but because they can.
Miliband’s failure to see this represents a blindness about the nature of power in capitalist society. And his belief that all will be well if only people behave nicely contrives to be both hopelessly utopian and deeply conservative. Utopian, because significant moral change rarely happens simply because people ask nicely for it. And conservative, because it leaves unchallenged the basic hierarchical structure of capitalism.