Class Warfare Blog

November 10, 2013

And in this Corner, Democracy! (Unfortunately, Not Ours)

I have written before that democracy and capitalism are at odds with one another, that if democracies do not set limits on capitalism, then they will soon turn into oligarchies or plutocracies. (The Golden Rule is really “those that have the gold, make the rules.”) In this country democracy is losing the battle more so every day.

We aren’t used to taking advice from other countries but we should look at what Switzerland is doing. Switzerland, the land of big banks and secret numbered bank accounts, is one of those “euro-socialist” states. Switzerland believes that being a citizen has privileges associated it. Obviously, Switzerland is not a land of the free; nobody is free to starve or free to die of treatable illnesses (as they have socialized medicine)!

Switzerland has a new initiative which it looks like the people may enact (they have government of the people, by the people, and for the people, unlike us). This initiative caps executive pay at . . . wait for it . . . twelve times the pay of the lowest pay employee of the company. No, the drafters of initiative didn’t state a monetary amount, they just felt that nobody should earn in less than a month what another employee earns in a year.

Business interests are fighting this tooth and nail as they say it will hurt their businesses, that they will have to leave. The proponents say, nonsense, there are other reasons for doing business in Switzerland other than the ability to pay executives outlandish salaries. They say that income inequality is not an absolute thing, but a relative thing. If you want to pay an exec $12,000,000 per year, you may have to make the janitor a millionaire, or you could, you know, just pay executives salaries commensurate with their value to the company. (I know, novel idea.)

We could follow their lead but we may have to start at a 250:1 ratio (250 being roughly the number of working days in a year) because going all the way to 12:1 may be too big of a change in their pay for U.S. executives to handle.

It is amazing that businesses claim that not being able to pay truly astounding salaries to top executives is necessary for their success, because it never was prior to about 1970. All of those businesses for centuries got along swimmingly without excessive executive pay but now we can’t do without it. Is there a reason, a valid reason, for this? The Swiss sure as heck don’t think so.

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2 Comments »

  1. Sorry, but I don’t think you’re going to see that dog hunt in the land of the Koch brothers and Wall Street venture capitalist. We simply don’t have the public will here to address income inequality. Maybe in the next generation or two …MAYBE.

    But hey! My hat’s off to the Swiss.

    Like

    Comment by lbwoodgate — November 10, 2013 @ 9:04 am | Reply

    • Larry, even at 250 to 1?? ;o)

      Yeah, on a cold day in Hell we might have a chance. The Swiss are very pragmatic. Their “socialist” health care system basicly works like this: they established the rules under which health insurance companies could work. They set limits on profits and established risk pools to protect those companies. If a doctor isn’t paid withing a week of submitting a proper bill, the insurer’s next premium payment is free. Boy, sounds tough. Must be because only 8000 insurance companies decided to play under their rules! Amazing. The way they set things up (overhead + profit < 8% if I recall correctly) is a guaranteed earning system. They also have a national board of medical people working to keep costs down and services up. Like I said, pragmatic. And now we know they are also fair minded.

      PS We've moved (again)! Just change the Apt # from 28C to 17A (110 feet down and about 30 feet east). Effective Date: October 1, 2013

      *Entia non sunt multiplicanda praeter necessitatem.* ************** Steve Ruis

      Like

      Comment by stephenpruis — November 11, 2013 @ 8:13 am | Reply


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