Still on holiday, but a brief note on the Guardian's main story today, The Boardroom Bonanza, complaining that directors' pay (and City bonuses) are growing faster than ever and far faster than salaries elsewhere. The complaint is, of course, a largely self-fulfilling prophecy.
When we read the many articles deploring directors' salaries and City bonuses and calling for the government to do something to curtail them, we can be sure that directors read these articles also and respond accordingly. We have abundant examples of what that response will be.
For example, when governments talk of imminent changes to planning regulations that will make commercial development of an area of land more difficult in future, that area sees a flurry of activity as developers hasten to pull down anything that will come to be preserved by those regulations. The Endangered Species Act of 1973 in the US gave the government powers to block development on land that hosted a range of such species, and so forced owners of forests that did not currently host them to pull those forests down for fear of losing the option to develop the land later.
Whipping up public support for a ceiling on directors' pay and City bonuses might, in the long run, motivate the government to legislate. In the short run we can say with far more certainty that it will motivate directors to take out as much money as they can now, before the regulations move against them - or more precisely (since it will take the current crop of directors a bare handful of years to bank their millions before retirement) the directors who come after them.