Quote: Wires71 "Slavery Point - No. As the economy develops, people develop and have more choice. Enterprise then needs to pay more and more competitive wages to attract the right employees. The wealthier the employee, the more the economy develops and so on. This drives up the wage standard.
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This is an important point on why the market system needs regulating to save it from eating itself, and this is why we need a minimum wage and a good standard of working rights and conditions, good public services and standard of healthcare, even if this comes at the expense of people being able to get 'super rich'.
Most of the consumers in the economy are the average joe, if you produce ipods, plasma tvs, general consumer goods, you're pitching these at people who are not especially wealthy, but have a bit of disposable income free to make some consumer choices, all business is really doing, is competing to get people to make their consumer choices in favour of their product.
When people are unemployed in large scales or are struggling on low incomes then they don't have the consumer choice any more and business collapses.
The problem with this current recession, is that the buy-now-pay-later culture has meant that a lot of people are in serious financial problems, even who aren't financially badly off, because they've got commitments to loans and mortgages which aren't servicable. One of my mates is on £45k a year and is now in major financial trouble just because his girlfriend got laid off from her £28k job. They had a big mortgage, 2 cars, and maxed out credit cards which meant to be serviced by a joint income of more than £70k. It's crazy that somebody on that level of income is now struggling with debt but its by no means atypical, and till they get themselves on an even keel they are taken out of the economy as consumers.
I think we really have to be careful about the limits of "encouraging enterprise", I think its good to allow people to aspire to a better life and to get more but when you're talking what someones net pay is out of £300k a year, or £500k a year, or £1m a year, does it really matter if effectively it starts getting 'capped'. They are already rich enough and wealth spent on personal greed would be better spread around for the public good.
We always hear the arguments for the trickle down effect but it has diminishing returns after a while, some level of wealth redistribution is a lot more beneficial to the economy as a whole because you need to maximise the number of people in the economy who can participate as consumers, so business actually has people to pitch to.
As a side argument from this I am also a big advocate of improving the rewards of the people who actually make the foundations of our economy work even though they don't work in business themselves and actively 'create' the wealth. Teachers, nurses, police, firemen, soldiers, these are people who keep our economy safe and healthy and trained for the skills the economy needs. There should be some redistribution of wealth from the super rich in the private sector, to them.
