In the 1950s it was common for the CEO of a large company in Canada to draw salary and benefits that were 20 - 30 times what the average worker was making in that same company. Today in similar companies the CEO will draw 200 - 300 times what the average worker in the company makes.
In the 1950s individuals in the top tax bracket paid about 80% of their income to the tax man. Today individuals in the top tax bracket pay about 30%.
The question is why has this shift occurred? I recently heard an explanation that I find persuasive. In the 1950s there was still a genuine fear of communism. The USSR seemed to be thriving, communism had taken over eastern Europe, and communist parties, groups or factions were alive and well in many countries, including Canada. The financial elite (the 1%) and the ruling elite understood in a way few understand today, that there is genuine appeal in communism to people who feel oppressed. We saw this ourselves in Ethiopia in the 1970s. The financial and ruling elite of the 1950s understood that a necessary part of a strategy to halt the spread of communism needed to be greater egalitarianism in democratic capitalism. This was better understood in Europe (for obvious reasons) than it was understood in the US (Canada, as always, was somewhere in between).
This understanding and fear of communism manifest itself in many ways, including militarism and the cold war. But it also the financial elite (which includes not only investors and such like, but also entertainment stars) felt they needed to temper their propensity to grab too much off the top. Whether it was deliberate or well thought out I do not know, but for whatever reason, even though they could have grabbed more than they did in the 1950s.
The other way it manifest itself was in the European welfare state. The ruling elite the Europe realized that if they wished to keep communism at bay, they needed to offer the working class more than just crumbs off the table. So they did.
Makes sense to me.
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