Work & Wages

But to work is also to acquire skills, to win friends, to gain status, to assert your very existence. Enforced idleness is numbing and it is no coincidence that the highest rates of suicide are among the unemployed. So the first objective of any democratically elected government is the promotion of work. And its policy objective is to shape the demand for work while stopping work itself from becoming a hireable and fireable commodity.

The process has to respect economics. Unless employers can change the balance of their workforce as demand patterns change and pay them accordingly they confront trading losses and ultimately bankruptcy. No economy, industry or firm can operate with a prohibition on making workers redundant.

On the other hand few employers set out to treat people badly. Rather they find themselves having to choose the lesser of two evils. Either they lower their wage costs aggressively, for instance, or the prosperity and independence of their enterprise is in jeopardy.

James Meade has long argued that this is too great a burden for business to bear. Why not instead deliberately reduce the proportion of household income derived from wages? Several Conservative theoreticians have been moving in the same direction.

What then should take up the 'effective demand slack'? Profits suggests Meade...share options in lieu of higher wages. The Microsoft Way. But in the hands of everybody in the firm, not just the fat cats at the top.

Property argue others. One important plank of the Conservative Party agenda in Britain was always the creation of a property-owning democracy. This was a key component in the policy of privatisation. Margaret Thatcher in particular regretted that nothing of the sort actually happened.

Instead the most dubious Texan players have been scrambling all over the country buying up utilities to launder their losses and prop up their own ailing balance sheets.