Corbyn's maximum wage cap exemplifies his ignorance

This article originally appeared on United Politics on 16/01/2017

Nobel prize winning economist Friedrich Von Hayek once famously remarked 'if socialists understood economics, they wouldn't be socialists', a point Jeremy Corbyn took it upon himself to demonstrate this week when calling for a maximum earnings cap.

During a media blitz ostensibly to 'relaunch' his opposition, he appeared on Radio 4's Today Programme, ostensibly to talk about Brexit and immigration. After taking almost the complete opposite position to what had been briefed on those issues the day before, he then made an offhand comment about imposing a maximum earnings cap in the name of equality.

"I would like there to be some kind of high earnings cap, quite honestly. I can't put a figure on it and I don't want to" he told Today. "I would to like to see a maximum earnings limit, quite honestly, because I think that would be a fairer thing to do."

Needless to say, this became the headline of the day, and dominated his subsequent media appearances. And for good reason too, a maximum earnings cap would have profound effects on our economy.

If you limit the amount people can earn, you immediately put a limit on their productivity. If there is no incentive to work beyond a certain point then people will cease to do so. Why would anyone currently earning £10m do the same work for £1m? They'll either do 10% of the work, or go elsewhere where their efforts are rewarded.

The argument seems to go that nobody is worth that sort of money. But that assertion is not backed up by reality. For example, Steve Jobs' death wiped $17.5bn off of Apple's share price. The value a competent CEO can add to a firm is why shareholders are happy to pay them such high sums.

This is a point seemingly lost on Corbyn. During an interview with Laura Kuenssberg on the BBC he referred to the lower levels of employees as "those that are actually doing the work" belying a belief that CEOs don't actually do all that much bar, well, smoking cigars and diving into swimming pools full of gold coins presumably.

Despite Corbyn's assertion that income inequality is running rampant, the statistics show otherwise. The crash of 2008 made us all poorer, but it also made us more equal. Data from the ONS shows that income inequality, far from being on the rise, is at it's lowest point in 30 years.

Regardless, his pursuit of egalitarianism within company ranks is, and I struggle to find a diplomatic way to put this, sheer idiocy. For example, he proclaimed his disgust at the high wages earned by CEOs compared to 'shopworkers' et al.

I'm sure many people have sampled the delights of retail work at some point in their lives, this writer included. But the idea that my 8 hours a day stacking shelves, ordering stock and serving customers required the same level of skill and attention to detail (or indeed the same level of giving a toss) as the CEO is ludicrous.

Moreover I'd wager you'd be hard pushed to find a shop worker who knows what their company bigwigs are paid, much less care. Their concern is for themselves and that they're being paid fairly for the work they carry out. If they feel that isn't the case, they seek employment elsewhere. Such is life.

But, as much of a cliche as it is, Corbyn's wage cap is the politics of envy encapsulated. This is not even a Robin Hood approach, where 'excess' earnings are redistributed. Just a straight up, 'no, you can't earn that much, it's not allowed.' It is spectacularly authoritarian, born out of the fallacy of the fixed pie.

Of course, if Corbyn actually means to confiscate any and all earnings above a certain level then we're now talking about an income tax level of 100%. The fact this is being suggested by the leader of the opposition on national radio and not by a pimply sixth former in a debating society shows just how devoid of serious thinking Labour have become.

Inequality doesn't matter. What does matter is overall poverty levels. If the poorest man is getting richer then it is of little consequence that the richest man gets richer still. In fact, some research suggests that growth occurs more readily when there is more inequality.

A rising tide lifts all ships, but Corbyn's approach would drain the ocean. A cap of the likes he advocates would see a mass exodus of talent, and thus tax revenue from this country. The public services, and public sector employees, who's funding and wages rely on those tax revenues would soon find themselves without income.

Not only would it strangle economic growth, it would also halt progress. Why would the tech wunderkind with a killer app bother to pursue the idea if the fruits of his labour and rewards for his ingenuity are destined to be disposed of by the state?

It is incredible that such an ill-conceived idea has been seriously suggested by a prominent UK political figure. It's closer to communism than socialism. The most surprising thing of all though, is that Corbyn can still surprise us with his ignorance.

Labour's real problem? Britons don't want socialism

This piece originally appeared on Conservatives for Liberty on 24/09/2016.

Labour will today elect their new leader, or more likely, the old one. Far from unseating Jeremy Corbyn, the coup, vote of no confidence, and Owen Smith’s leadership challenge, have merely served to galvanise the membership, all of whom overwhelmingly seem to back the right honourable member for Islington North.

Much has been made during the contest about Corbyn’s lack of leadership, and his poor handling of those of his colleagues who don’t reside on the far left of the party. There is no doubting that Jeremy Corbyn has been completely ineffectual as Labour leader. His bizarre ‘letter from Mrs Trellis’ approach to PMQs basically gave David Cameron free shots on goal, with no follow up questions to attempt to pin the PM down.

Corbyn was widely praised for his ‘best performance yet’ when challenging Theresa May over her grammar schools policy recently, yet watching it back it’s hardly an evisceration. He’s merely set the bar so low as to have any halfway competent performance seem spectacular by comparison. Where Labour has put pressure on the government, on issues like Tax Credits – aided by Tory backbenchers mind you – it has apparently been accomplished without much, if any, input from Corbyn.

Whilst this infighting and incompetence has undoubtedly helped Labour’s collapse in the polls, it merely distracts from the real problem Labour faces, namely that Brits, by and large, don’t want socialism.

Make no mistake, that’s all that’s on offer. Owen Smith has skewered himself between trying to earn the support of the PLP and the membership, leading to his entire pitch essentially boiling down to ‘I’m exactly like Jeremy, but with leadership.’ When it comes to policy, they’re very much just slightly different shades of red.

Smith pledges to borrow £200bn to try and boost the economy. Not to be outdone, Corbyn raises to £500bn. The two appear to playing economic chicken whilst the electorate at large look on in bewilderment. Labour’s own report into why it lost the 2015 election came to the conclusion that one of the reasons was that the party couldn’t be trusted on the economy. Yet they’re now deciding between two potential leaders who are so far left they make Red Ed look like the Iron Lady.

Moreover, far from being anti-austerity, voters overwhelmingly supported the cap on benefits and welfare cuts. In a Populus poll for the Financial Times back in April 2015, a massive 75% of respondents supported then Chancellor George Osborne’s £12bn planned welfare haircut. Whilst voters are in favour of a strong safety net, they’re very much of the view that one should earn your own way in the world if you’re able to do so. This flies in the face of Smith’s commitment to an ‘equality of outcome, not equality of opportunity’.

Then there’s the issue of zero hours contracts. Both Corbyn and Smith have continued to back Miliband’s policy – again rejected at the last election – of banning the use of them. This is despite a majority of people on zero-hours contracts reporting that they’re happy with the arrangement and the flexibility they provide. The same survey also showed that more people on zero-hours contracts are happy with their work/life balance than those on fixed contracts. Yet again Labour’s big statism is in conflict with the electorate’s desire to negotiate their own terms of employment.

Perhaps the biggest dichotomy on show is Smith’s stated desire, should he somehow find himself in power, to keep the UK in the EU. The vote on June 23 saw more people vote to leave the EU than have ever voted for anything else in the history of this country. They did so to move power one step closer to the individual and one step further away from the state, yet, with a couple of notable exceptions, the authoritarian tendencies within Labour rejected this notion, and now Smith has decided to make ignoring this overwhelming democratic mandate a key part of his leadership campaign.

The latest bug-bear of the Left is the potential re-emergence of grammar schools. Vehemently opposed by Jeremy Corbyn, and the source of his vigour at PMQs, the policy also saw Owen Smith denounce the Tories as ‘turning back the clock’. But the move to give parents more options when it comes to their child’s education is, once again, a popular one. 62% of parents would get their children to sit a grammar school entrance exam, according to Yougov, and more people are in favour of expanding the provision of grammar schools than scrapping the existing ones or maintaining the current stock. When it comes to centralisation versus liberation, Labour are once again backing the wrong horse.

It is this belief in increased state control, over the economy and much else, which ultimately dooms Labour. Despite what Corbynistas will have you believe, their man hasn’t led Labour to a lead over the Conservatives at any point during his leadership. An average of polls compiled by Britain Elects has the gap at it’s narrowest, a couple of points, in April. But Labour’s position was already deteriorating by the time Hilary Benn was sacked from the shadow cabinet, triggering the mass resignations which ultimately led to the vote of no confidence.

This is because on the whole, the British electorate wants the government to leave them alone and get on with it. This is why they rejected Miliband at the last election, rightly judging that his micro-managing economic policies could spell disaster, and why polling has shown they are consistently rejecting Corbyn. Until Labour realise this, and reject the socialism espoused by Corbyn, McDonnell and their comrades on the Left of the party, they are doomed to electoral oblivion, regardless of who happens to be leader.

The Disappointment of Jeremy Corbyn

"We have a European bureaucracy, totally unaccountable to anybody. Powers have gone from national parliaments, they haven't gone to the European parliament, they've gone to the Commission."

Not a quote from Nigel Farage but from Labour leader Jeremy Corbyn. I confess that whilst I disagree with large swathes of his politics, I was rooting for Corbyn to win the Labour leadership. Aside from the cynical desire to see socialism quashed in UK politics for at least another generation, here was a man who had routinely defied the party whip throughout his tenure in parliament and stuck to his principles - a trait sorely lacking in Westminster. Moreover, Corbyn had a lifetime of Euroscepticism and criticism of the EU behind him. David Cameron had promised an in-out EU referendum and having narrowly won a majority in the election, we would be getting it. Here was an opportunity to have a lifelong Eurosceptic lead the second largest party in UK politics and make the left-wing case for withdrawal, devoid of the unpleasantness some feel that UKIP taints that idea with.

Alas, after his speech today, Corbyn has stuck to the general theme of his opposition and disappointed, setting out as he did a case for Remain. Corbyn of course stated back in February that he would be backing the Remain camp, thus performing a complete 180 on his previous stances. He voted to leave the then EEC in 1975, he voted against the Maastricht Treat in 1992 and the Lisbon treaty in 2008. His website was full of articles decrying the EU and it's corporatist nature, which have now been taken down, displaying the sort of double-dealing and hypocrisy that his supporters saw him as an answer to.

The main thrust of Corbyn's speech was that yes, the EU is awful, so that's why we need to stay in in order to reform it. This completely disregards the EU's unwillingness and inability to reform, as David Cameron discovered in his ill-fated 'renegotiation.' Indeed, one of the most impressive diatribes Corbyn almost gave was his evisceration of Cameron over his inability to achieve any meaningful reform. I say almost because he rightly lambasted the EU's failure to stop the erosion of jobs in vital sectors like the steel industry. He pointed out that the EU enforces the privatisation of public services (meaning that Corbyn's policies of rail re-nationalisation and the like are incompatible with EU law). He decried their austerity measures, their failure to protect worker's rights, and it's severe lack of democratic accountability. Unfortunately, Corbyn shunned the obvious conclusion of this litany of offences and endorse an exit from the European Union, instead opting to back staying in regardless.

It's entirely possible of course that Corbyn has indeed reassessed his view on our EU membership, though one can't help wondering if this about face is more to do with trying to maintain some sort of party unity. The early days of Corbyn's leadership were dogged with infighting and disagreements over policy, such as Trident for example, and at the time of Corbyn's announcement he would be backing In, a further split could well have spelled disaster for his fledgling leadership. Indeed, when asked why he had changed his mind, Corbyn stated that the Labour Party backed EU membership and that 'that's the party I lead and the position I am putting forward', suggesting that this speech was by Jeremy Corbyn the leader of the Labour Party, rather than Jeremy Corbyn the man.

Regardless, his actual speech was full of the kind of nonsense we have come to expect from the Remain camp. From his stating that EU membership is crucial to worker's rights - something that is formulated at the global level by bodies such as the ILO and then passed down to the EU to implement, not drawn up by the EU itself, to stating that 'not that many people come here' with regards to the EU's free movement principles. Regardless of where you stand on immigration, a tally of over 200,000 can hardly be classed as 'not that many.'

It was also telling that one of the arguments Corbyn made was the threat of the Tory party dumping worker's rights such as maternity pay, annual leave and equal pay. Never mind the fact that the Conservatives have no such policies - it would be electoral suicide if they did - but supposing the British electorate wanted a more deregulated, free market economy and voted for a party to implement such a scheme. Corbyn is in effect endorsing the overrule of British democracy by the European Union, the biggest bone of contention that every advocate of a Leave vote from all over the political spectrum has with the EU project.

So yes Jeremy, I understand the need for party unity, lord knows we could use an effective opposition right now, that your party is currently far from providing, but it's a shame that in the name of that unity, you have abandoned that trait which your supporters revered and your opponents, however much they may disagree, respected; your elevation of principle over politics.