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| Sir Jim Ratcliffe (picture from the BBC website) |
I do not generally buy either Sunday papers or Murdoch publications but I must admit to a guilty fascination with the Sunday Times Rich List. Every year this lists the people with the most money in the country. This year the chart-topper was, unusually in these days when so many of the wealthy are from overseas, British. His name is Sir Jim Ratcliffe, he is sixty five (my age) and he is the head of a company called Ineos, the name meaning ‘something new and innovative’ according to Wikipedia. He is reportedly worth over £20 billion pounds, has three children from two wives and employs 17.000 people.
Ratcliffe made his money from chemicals and energy, is not. afraid of fracking and is a fairly efficient and ruthless operator who won a battle with the Unite union (of which I am a member) over the Grangemouth oil plant in Scotland/ It was losing money so he reorganised the plant after threatening to close it. In a similar but smaller dispute my local cinema the Ritzy was in dispute with some of its workforce and their union over its refusal to guarantee paying the London living wage. It too seems to have won this battle. Employers who are not afraid to dig in often win disputes and come out on top as Ratcliffe and the Ritzy owners did.
To be good at business you need to have an eye for a gap in the market and the ability to fill it; you need to be ruthless with your competitors and, sometimes, with your employees while maintaining the respect of the former and the co-operation of the latter. You also have to be prepared to go into debt, borrowing money to back your hunches, which need to be good ones. Donald Trump likes to remind everybody what a good businessman he is but he relied on what he laughably called ‘a small loan’ of a million dollars from his father to get started and has gone bankrupt several times when his hunches have not paid off. I would be a lousy businessman, the only significant debt I have ever incurred being my mortgage, and I could not bear the shame of leaving unpaid debts behind if my ideas failed – which they often do, even with supposedly successful speculators like Trump.
At the other end of the scale are the low-paid who get a little help from the government these days through the minimum wage, now called the National Living Wage, which was a not very subtle attempt to abolish the distinction between what employers had to pay and what they ought to pay. This has recently gone up to £7.83 an hour for those above the age of twenty five, £7.05 an hour for those below, less for the even younger. That works out at around £15,000 a year – if you work a full year with holiday pay thrown in.
You can probably survive on £15,000 a year but you cannot save. It is impossible to build up any significant amount of capital and start a business in the way that Sir Jim has done without some help via a loan from a family member or a friendly bank manager. For most people survival is the aim until they can relax in later life when the bills and debts have been paid off and the children grown up and there is a little money to spare and – hopefully – enough time left to spend it.
Sir Jim obviously has money to spare but may not have much time to spend it, so busy has he been earning it. John Paul Getty was an expert at making money but does not seem to have had a particularly happy life as a result and the curse of his wealth has gone down to later generations, who did not even have the satisfaction of earning their (his) money, only of inheriting it. I agree with whoever it was that identified the sum of money you need to live comfortably (around £35 – 40,000 a year?) and said that whatever you have beyond that adds little if anything to your happiness. A Rolex does not tell the time better than a Timex, a Rolls Royce does not get through a traffic jam quicker than a Renault and you arrive at the same time in both first and second class.
The problem for egalitarians is that they tend to get angrier about wealth than they do about poverty. It is the money of the rich man (the majority on the Rich List are male) who excites their disapproval far more than the lack of it for the poor person (many of whom are female). This has only got worse in recent years because way that capitalism is organised (which is hardly the right word) the gap between rich and poor has grown wider in recent years. My theory is that it was the collapse of communism which was both directly and indirectly responsible for this widening gap: directly because a lot of money was hoovered up by the Roman Abramoviches of previously communist countries like Russia who saw and exploited the opportunity to cash in on new market freedoms; indirectly because the lack of a viable alternative system meant that successful capitalists felt far more uninhibited in amassing and parading their wealth. In the 1970s the boss of a big company might earn ten to twenty times the salary of the average worker. With the shackles off he (again usually) makes one to two hundred times the average.
What, if anything, should be done about this. My late father suggested that the government pass a law restricting what anyone could earn to a million pounds a year. Dream on. Top footballers make that in a month and no-one wants to go down in history as being the person who destroyed the Premier League by driving the top players away to a country which will not tax them or restrict their earnings. The only way to change things is to adopt more of a socialist lifestyle within a capitalist system. So, stop making money when you don’t need to, give more away and take time to enjoy it if you have enough. Don’t hold your breath that this will happen any time soon.
Edwin Lerner
My other blog is diaryofatouristguide.blogspot.com
