Ed Miliband is right. MPs should be banned from having paid directorships and consultancies. However, I don't say this for the conventional reasons.
It's not because such jobs distract MPs from their duties to voters and the country. The way to stop an MP doing a lousy job isn't to stop him doing other jobs but to ensure that he gets either deselected or voted out. In this context, stronger powers of recall would be better than a ban on outside work.
Nor is it because such directorships will lead to MPs' votes being swayed by specific commercial interests. As Simon says, the solution to this is to have tougher rules preventing such interests from influencing votes.
Instead, I'm thinking of the mere exposure effect: people tend to like things simply because they are familiar with them. Some experiments (pdf) by James Andreoni and Justin Rao illustrate an important variant of this.
They got people to play a simple dictator game, in which people were asked to split $10 between themselves and a partner. They found that when the dictator and the partner were not allowed to communicate with each other, dictators handed over an average of $1.53. However, when subjects were allowed to ask the dictator for a donation, the dictator gave an average of $2.40. This tells us that communication increases sympathy, even if it leaves incentives unchanged.
Herein lies the danger with allowing MPs to take directorships and consultancies. In causing MPs to associate with rich businessmen, they will bias MPs' sympathies towards the rich. This violates the democratic ethos, which says that political influence should be equalized.
Two things exacerbate this danger. One is that the converse of the communication effect is also true. Experiments by Agne Kajackaite have shown that people are more likely to behave badly if they are ignorant of the victims of their behaviour. If MPs don't associate sufficiently with the worst off, they might therefore become less sympathetic to them.
The other is that MPs tend to be personable types: you couldn't cope with all that gladhanding unless you were. But this means they are especially vulnerable to the mere exposure effect; the problem with agreeable folk is that they can agree with the wrong people.
In this sense, directorships and consultancies are very different from other types of work. Writing newspaper articles, for example, is a solitary job which doesn't expose you to the influence of the rich*.
You might reply here that this form of exposure is only one of countless ways in which the rich gain undue political influence.You'd be right. But this is another reason to welcome Miliband's proposal. It invites the questions: in what other ways do the rich have excessive power and how might we combat this? In this sense, he is both putting a good issue on the agenda, and perhaps introducing a building block policy - an apparently modest policy which creates the potential for more radical ones later. For this reason, I applaud him.
* The counterargument to this is that some directorships don't do so either - for example, in small family firms. But legislation should take account of this.