THE DAILY TELEGRAPH: The Governor of the Bank of England has warned Britain's business and banking elite to rein in pay and bonuses or risk sparking a rebellion against capitalism in its current form.
In a speech to business figures in Brighton setting out the "arduous, long and uneven" path to recovery this year, Sir Mervyn King said the key to restoring growth would be "above all else ... to maintain support for a market economy and an open world trading system".
His fears reflect the recent backlash against capitalism, with the Occupy movement spreading from Wall Street to St Paul's and, this week, Davos – the Swiss ski resort where the world's rich and powerful are meeting.
Coming in the week that the Coalition laid out proposals to rein in excessive executive pay, Sir Mervyn said: "The legitimacy of a market economy will inevitably be challenged if rewards go disproportionately to a small elite, especially one which benefited from the support of taxpayers.
"Those taking decisions on remuneration, in the financial sector and elsewhere, need to understand that a market economy rests not just on incentives, but on the acceptance that the distribution of rewards is fair."
He said the growing sense of injustice was because "those who have suffered most have been those who bear no responsibility for [the financial crisis], and who accepted the disciplines of a market economy only to find that others were excused that discipline because they were 'too important to fail'". » | Philip Aldrick, Economics Editor | Tuesday, January 24, 2012
My comment:
Mervyn King is absolutely right to warn the élite about excesses. Capitalism is a flawed system, but it is the best economic system known to man. The élite need to be very careful that they don't 'cook their goose' through their greed. Socialism may have been defeated for a while, but it will surely be waiting in the wings to re-appear when the time is right. We would be ill-advised to assume that it is dead forever. Everything in life goes in cycles. I say this: Don't give the socialists a chance to bring the best system down. Moderation is key. – © Mark
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