Just what the Dean and Chapter of St Paul’s wanted. The news that FTSE 100 bosses’ pay went up by an average 49 per cent last year could hardly have been better calculated to strengthen the Occupy movement’s conviction of its rightness and its determination to stay put. Nothing changed: the gap between self-serving haves and powerless have-nots continues to grow apace.
The reality that top executives have taken up residence on a different planet was coolly underlined on the Today programme by the intelligent and articulate Sir Martin Sorrell (salary £7.4m), chief executive of giant marketing services group WPP. WPP, Sorrell stated simply, was global, with just 10 per cent of its revenues in the UK. He left unsaid the fact that the group was also global as in footloose, having moved its domicile to Dublin in 2008 before relocating back to London this year.
You could almost hear Sorrell shrug the questions away. He didn’t so much defend his pay – he didn't need to – as calmly inform his questioner why the situation was thus and could be no other way. It’s none of our business, he could have added but didn’t, and there’s nothing, absolutely nothing, anyone can do about it anyway.
WPP is a perfect summation of the ideal late capitalist corporation: enormous (2010 revenues £9.3bn, pre-tax profits £1.4bn), anonymous, diversified, of no fixed abode or nationality, subject to no overriding law but its own, while Sorrell himself is the archetypal technocratic leader. Together they are the product of what author and guru Gary Hamel describes as a sweeping twin process of centralisation within
companies and consolidation across
them that in industry after industry has concentrated power in the hands of a few imperial CEOs who earn greater returns on an hour of their time spent lobbying politicians than on an hour inspiring employees or pleasing customers. We now have a ‘corporatocracy’ rather than a democracy, Harvard Professor Jeffrey Sachs argues
. It’s a regime ‘Of the 1 per cent, by the 1 per cent for the 1 per cent’, charges Joseph Stiglitz
, the Nobel economics laureate, like Sachs hardly a raving left winger.
The counterpart of the remote untouchability of the few at the top is the perceived powerlessness of the many at the bottom, in front of St Paul’s, in Zuccotti Park or any of the 900 cities where Occupy protests have taken root. One blogger expressed the view from the bottom like this: ‘There is an overwhelming and global sense that the rest of us don’t matter any more in our globalised industrialised society, except as passive consumers of products. We are not needed or wanted any more for our ideas, for our viewpoints, for our knowledge and skills, for our approval at the voting booth, or even for our physical labour; the corpocracy would prefer that we just borrow more and spend more, endlessly, quietly, and uncritically, until we die’. Another noted that capital having exhausted its first fuels, ‘now it's the creation of poverty, not of wealth, that makes the world go round’.
That seems almost literally true. While households and governments are crippled by debt, partly incurred by bailing out the banks, corporations are soaking up all the wealth they are creating. In the US corporate profits as a proportion of the economy are near an all-time high, just as wages are at an all-time low. Leaving aside the period in 2007 just before the crash, profits are higher than at any time since the 1950s. US companies alone are sitting on $2tr of unspent cash.
In years to come, people will look back on this era as just another in the line of imperiums stretching back through the Arab dictatorships, the domination of the communist party in Soviet Russia to the anciens regimes and feudal societies of Europe. The sense of entitlement of today's corporate ruling class is as absolute, and irrational, as the former belief in the divine right of kings. Along with the weight of vested interest, it is such that it is most unlikely that reform will come from within. But if it doesn't, the lesson of history is that sooner or later it will surely come from outside. As Stiglitz points out, one thing that all the exorbitant wealth of the rich doesn't seem to buy is an understanding of what self-interest really means: looking out for number one requires having regard to the welfare of the other 99 too.