As round three of The Maximum Wage continues below, The Invisible Hand of Capitalism invites Clive Menzies of Critical Thinking onto the stage to introduce himself.
Clive Menzies: I spent most of my working life running investment management businesses in The City. Alarm at the lack of serious measures to curb the power of the banks, after the sub-prime crisis, prompted investigation into the crisis and then the banking and monetary system itself. Found that all I thought I knew about politics and economics was untrue. Started Critical Thinking at the Free University in January 2012 to collaboratively explore the current political economy and identify levers for change. I was a governor of a community secondary school in Haringey for a few years – having been educated at public school, my years as a governor transformed my views on education.
The Invisible Hand: Well, welcome to The Maximum Wage. Now, George Orwell suggested the Maximum Wage we are using today, a ratio of 10:1 between the highest and lowest earners. But that plan has some serious shortcomings, doesn’t it? As do all attempts to regulate the markets?
CM: Yes, that’s right. Inequality is a symptom of an economic disease. And as you all know, we can’t treat a disease by treating just the symptoms. The problem with trying to regulate inequality by capping people’s wages is, I guarantee you, they will find a way round it. They’ll pay him benefits in kind, or they’ll pay him offshore, or they’ll do something under the counter. The root of the problem is the way the economic system works.
TIH: This has something to do with how Interest works. Can you tell us a bit about that?
CM: Interest is a wealth transfer mechanism, and it transfers wealth from all of us to the people at the top. Now, one of the common misconceptions is that if you don’t borrow money you won’t pay Interest. That’s not actually true. Everybody pays Interest. If you pay for a railway ticket, part of the cost is to go towards Interest payments on the capital that has been invested in the railway. Trains, tracks, stations, infrastructure. If you buy a chocolate bar, what is in the price of the bar? Interest on the machinery and farming that produced the chocolate bar.
The full interview can be found in The Maximum Wage magazine (until an oligarch buys and pulps them all). Find out how Interest transfers wealth from all of us to the top 10%!
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Performance combining hectic game-show silliness, satirical bite and economic critique – David Collard, The Times Literary Supplement