Salary capping is Evil

I was reading a sport-related article on MSN before, and there was a vote asking readers whether they thought footballer’s salaries should be capped. Over 70% of people had voted yes. I wondered why. Before I venture a guess, let’s answer the question of “should footballer’s wages be capped?”, by extending it to the overriding theme: “should anyone’s wages be capped?”

The question comes down to this: should anyone decide how much money you deserve to earn? If you are employed you’ve reached an acceptable wage that you are prepared to work for and your employer is prepared to pay. To “deserve” a wage is to reach an agreeable figure that your boss is prepared to pay you – that is all that “deserve” can mean, and it is no one else’s business. Now some businesses, such as the entertainment industry, are so huge that the demand for top-quality entertainers forces up the price for the services of such individuals. Demand must be met with supply. Sport is massive business and generates huge amounts of wealth – why shouldn’t the key architects of this business that creates vast profit for millions of people – the players, be remunerated accordingly?

It is the success of private companies that allows them to reward their employees with greater pay. It is the moral right of bigger and better companies, such as more successful football clubs, to attract better players to their team and reward them accordingly. Money talks, and it allows companies to fight fairly over a wanted player. If one club can afford to pay more than another, tough – that is the beauty of money: it allows an objective worth to be placed on items of value. Has the bigger club earned the right to sign a player? Yes! By sheer nature of the fact that they can.

Who has the right to dictate to a private business how it uses its money? There are only two institutions that have the power to do so: any club or association that a company has voluntarily subscribed to, and government. Only the first of these institutions has the right to do so – this is because a company that is voluntarily a member of a business association agrees to abide by the decision of that association. The government however has no right to tell an individual (and by extension a private company) how to manage its own property. The only proper moral role of government is to protect the Rights of its citizens. How much any company chooses to pay any employee is a private matter, and no business of anyone else’s. If the wages of any person were to be capped by an act of government, this would be a gross violation of rights, and monstrously evil.

What about those who have more important jobs in society, like doctors, teachers, fire-fighters etc? What about them? Do I think it’s “right” that someone who kicks a ball around a pitch gets paid the same wage in a week as a doctor might get in a year? In a word, yes. Consider this: by what objective criteria can you decide how much someone deserves to get paid? And how would you enforce such a criteria, without violating individual rights? If you decide that being a doctor is morally worthy of more money than being a footballer, how do you go about reimbursing the doctor according to your standard? You cannot create money out of thin air – all you can do is artificially inflate the price of healthcare at the cost of the consumer so that the doctor gets the money he is worth, in your opinion. But where does this money come from? Or do you take the “surplus” money that footballer’s earn and give it to the doctor? In other words, do you redistribute wealth according to some egalitarian philosophy of equality or perceived “social merit”? In further words, do you ask the footballer to earn the doctor’s money for him; do you ask the doctor to live off the effort of the footballer? No? Madness? Unfair? Evil? Such is the nature and mentality of socialism.

I think I now know why many people think wages should be capped. I think it’s a result of a socialistic mentality (especially common in the UK): those on “too much” money somehow owe their excess to others. Those on “too little” money are owed more from others. What the socialistic mindset really breeds is this kind of thinking: “your extra money should be mine!” And of course, someone lower down the pay scale is thinking the same of you. Do these people think money grows on trees? The reason some professions pay so much and others pay so little is this: demand. Demand is met with production, and production is the source of all wealth. If, some day, sport massively declined in popularity, so would wages. If people feel there is something immoral about how much sportsmen are paid, there is only one solution: use your individual power as consumer to not finance that industry. How many people who complain about huge wages will give up their Sky TV, their season tickets, their replica shirts?? Not many. They want world class footballers but without the wages that go with them. They want hundred-thousand capacity stadiums, but without the industry that will pay for them. They want some of ‘their’ money back from the superstars who earn it, yet keep paying over money every week. How will their wishes be met?? Somehow. In other words: at someone else’s expense.

If we are going to complain about mediocrities being paid inflated sums of money, let’s start with politicians. Only politicians can vote themselves payrises that aren’t connected to any production or merit. If the government decides that you should pay an extra 10% of your wages to them, because they say so, that is all that’s required to make it law. And unlike sport, you have no choice in the matter. But that’s a subject for another article.

If the mentality of capitalism was more abundant, people would admire those more successful, not be envious. People would respect production. People would understand that wealth is not a finite resource to be scavenged and shared by a non-objective mob vote based on immoral notions of “merit” – they would appreciate that wealth can be created, and demand is met with supply, and the only thing anyone can claim to deserve is what they’ve earned by the mutual agreement of other people. That is why nobody has the right to tell any two people how much they may pay each other. Anyone who claims otherwise is immoral and invoking an evil philosophy.

Abolish the Welfare State

I’ve never really liked the NHS historically, for one very important reason: poor service. Justice requires that the consumer receive the service he or she has paid for. That’s fair trade; it is the most basic principle of legitimate human interaction; exchanging value for value.

The reason I object to the NHS on principle is the same reason I object to paying a television license for a government-subsidised broadcasting company: my money is taken for a service I have not requested. Paying for the BBC is like handing over money to enter a fairground with all these wonderful rides, only to have some annoying barely-skilled juggler following you around trying to impress you.

Let’s say you’re a humanitarian with a “noble” ideal; you want everyone in the country to have free healthcare and medicine. A lofty ambition, some might say. A naive one, others might suggest. To see how removed this goal is from the constraints of reality one only has to ask the question: how will you pay for it? Sure, if you want to accomplish a mission of mercy and help people out of the goodness of your heart with your own hard-earned cash, that’s your choice. If you want to solicit contributions to the same end, such is your decision and that of the contributors. Whether you’d incur enough money to achieve your dream is debatable, so you decide that so noble and moral is your ideal those who chose not to contribute should be made to, at the point of a gun.

Now, whatever your sense of right or wrong, removing the possibility of choice from an action removes any moral implications of that action. Giving money to help others may or may not be moral; a person under duress to do so is being neither moral or immoral, they are doing what they have to, to avoid going to prison, or getting shot. That is about as moral as a slap of concrete.

One other important part of this master plan has been avoided. The most important part. Who is to provide the medicine and healthcare? The drug companies and the doctors. What if a doctor doesn’t wish to see to a patient? What if a doctor or healthcare company doesn’t want to take the risk of a particular operation, or waste their valuable time and resources on somebody (for whatever reason), who for example is constantly submitted with cardiovascular problems and makes no attempt to exercise or quit smoking?

Yaron Brook speaking of the American healthcare system (the principle is the same) says:

“The result of shifting the responsibility for health care costs away from the individuals who accrue them was an explosion in spending.

In a system in which someone else is footing the bill, consumers, encouraged to regard health care as a “right,” demand medical services without having to consider their real price. When, through the 1970s and 1980s, this artificially inflated consumer demand sent expenditures soaring out of control, the government cracked down by enacting further coercive measures: price controls on medical services, cuts to medical benefits, and a crushing burden of regulations on every aspect of the health care system.”

Cutting to the core of the problem, Brook continues:

“The solution to this ongoing crisis is to recognize that the very idea of a “right” to health care is a perversion. There can be no such thing as a “right” to products or services created by the effort of others, and this most definitely includes medical products and services. Rights, as our founding fathers conceived them, are not claims to economic goods, but freedoms of action.

You are free to see a doctor and pay him for his services—no one may forcibly prevent you from doing so. But you do not have a “right” to force the doctor to treat you without charge or to force others to pay for your treatment. The rights of some cannot require the coercion and sacrifice of others.”

The crucial problem with the NHS is that it is an embodiment of a solution to an imaginary problem divorced from the context of reality. The “problem” is that everybody does not have free access to any healthcare they require. But this isn’t actually a problem in the way socialists or collectivists would have us think. And the flaw in their thinking stems from a misguided understanding of right and wrong, that is, morality. What is their flaw? In a word: altruism.

In the altruist morality, the fact that you need something gives you an entitlement to it. It’s as simple as that. This notion is erroneous for many reasons. 1. It is divorced from reality; who will provide what you need, if not yourself? And how will you gain it from them if you cannot exchange value for value in a fair trade? 2. ‘Need’ does not equate to entitlement? 3. Where do you draw the line between all the other “needs” people have, and how? How do you decide which needs will be met with the enforced cooperation of others and which won’t?

The collectivist sees society as a living superbeing in itself, where the needs of the many outweigh the needs of the few; where those who have “more than enough” should be made to sacrifice for those who don’t have enough. The collectivist has chosen to concentrate on healthcare and medicine, but one needs to ask: should restaurants be made to serve beggars on the street? Should convenience stores be made to provide anti-perspirant for those who can’t afford to stop themselves smelling? Should your closest neighbour with a 10-bedroom house and 2 occupants be forced to give a room to one of your 6-member family in a 3-bedroom house? The “free-thinking” collectivist would like to draw the line at some point after individual rights have been violated, to stop his system moving inexorably to its inevitable corollary: communism.

In a free society, people trade value for value at their choice. Those who acquire wealth do so by exchanging their superior talents for greater money. They acquire what they “deserve” from those who are obligated to provide by a process of mutual cooperation and trade. For example, I reach an agreement with my employer to work for a particular wage. I meet the terms of my contract by attending work every day and doing the job that is required of me, in full. In return, they remunerate me the agreed fee, in full. They have deserved my work and I have deserved my money. The idea that I somehow owe a third party some of that money for the sheer fact that I have acquired it is a total perversion of freedom and morality. At what point and in whose eyes does my hard-earned money reach a point where it’s “too much” and I must pay over the “surplus” to those who haven’t earned it?

No man can make unearned demands on another. Yet the morality of altruism and sacrifice which is the basis for most societal norms states the exact opposite. And the collectivist wants to enforce this “morality” at the point of a gun. And the only way to meet the unearned demands of wanting men is by force; it’s by taking the property of those that have for those that don’t; it’s a gross violation of individual rights – the proper foundation of society – and the only rights that truly exist. Those who violate the rights of others are criminals.

A Right is the freedom to take any action to sustain your life. If your “right” requires the use of force against others, it cannot be a Right. There is no right to healthcare. There is no right to a car. There is no right to a minimum wage. There is no right to love. There is no right to the goods or services of others. You have no right to see a doctor. You have no right to a particular drug or medicine simply because you need it. For example, if you needed a vital operation that only a certain doctor could perform, you have no right to demand any action from him. He is a free individual like any other and value (his services) must be met with value (your services or money). Being unable to pay him is no different from being unwilling to pay him. Whatever you think of his choice to treat you or not, there is no moral obligation in the world that can force him to treat you against his will. If this point still isn’t clear, consider why you should pay for my bus fair if I can’t afford it. Explain why you should pay for my luxury toilet paper when I’m stuck with the non-brand variety. Healthcare and medicine are services like any other that must be acquired by fair legitimate trade; they belong to the doctors and private companies that manufacturer them, and no one can demand the property of others.

In a free society, the true cost of goods is passed onto the consumer, and consumer and supplier can agree on a mutually-acceptable price for a service, neither being sacrificed to the other. People are free to subscribe to a healthcare company of their choosing; open competition will drive down prices fairly and improve service. People are encouraged to look after themselves and incur discounts from healthcare companies, knowing that someone else will not pay for their bad luck or laziness. The overall cost of healthcare is decreased which raises the overall standard for everyone, and increases the availability of even basic services that the poor can afford. More importantly, individual rights are respected and people have a proper view of what they deserve and what they can earn; what is rightfully theirs and what they have to merit; what belongs to them and what doesn’t; and society’s future is invested in the only system that can fully allow humans to flourish and better themselves, generate greater wealth, and increase happiness: capitalism.