Post-Covid Free Market Changes

I'm an unashamed believer in free markets, free trade and the power of capitalism to lift people the world over out of capitalism.  I think the case for all those things is beyond doubt empirically. 

But that doesn't mean that I think there's not a role for the state generally, and when appropriate, to regulate markets.  And when we get through Covid-19 and its hideous economic impacts, I think there's going to be a case for some fairly radical government interventions as part of the settlement with the UK population. A reset. Some measures to make things feel a bit fairer.

I've got three in mind. Here's a quick trot through them....

1. Curb executive pay by placing a limit on the multiple of what they can earn compared to the average full time pay in their organisation. I'm not talking about entrepreneurs or risk takers; I'm talking about the executives of public limited companies and larger private companies. These aren't people who've had brilliant ideas, or risked everything to create lots of new wealth.  They're much likely to have climbed greasy corporate poles through a combination of genuine ability and the skill to play the corporate game.  I'm happy for them to earn lots of money, but not the vast sums they currently do. There's plenty of literature on the subject of how the multiple of the pay of CEOs has risen from (roughly) 20 times the median pay of an employee in the 1950s, to well over (roughly) 200 times today.  I'm not sure what I'd set it at, but I'm sure that given the right data I could come up with a figure. 
   
   Aside from creating a slightly more equitable feel in the job market, this would also create an incentive to raise the average pay of employees.  We might find that the key workers currently risking their health for £10 an hour move towards earning £15 an hour. Not life-changing, but certainly more comfortable, especially when coupled with:
   
2. Moving towards a Land Value Tax as the primary source of tax receipts.  Making the move to this would be difficult and complicated, but then our existing system of taxation is difficult and complicated.  (If you don't know what Land Value Tax is the best thing to do rather than me try to explain it is go to this link: http://www.landvaluetax.org/what-is-lvt/). But post-Covid, there are going to be historically-enormous levels of debt that will need to start to be repaid. Increasing existing taxes on income on profits are going to discourage economic activity just at the point when it's going to be needed more than ever before, so let's move to a system which at worst will keep those taxes level, and in time would I believe have the potential to reduce them, while keeping the revenues we'll need to not slash public expenditure.  Aside from the economic benefits, I think a Land Value Tax, if done properly, would again help to create some genuine sense of "we're all in this together".
   
3. Shunning Chinese-made products.  Say what you like about Donald Trump (and most people do), but he's seen China as the major global threat for many years now, and I agree with him. A combination of their brutal domestic politics and policies, hideous human rights violations, and shameless stealing of intellectual property just make them a nation we shouldn't be doing business with (and that was before their cultural practices unleashed Covid on us). So we shouldn't.  I'm personally going to do my damndest to avoid anything manufactured in China, and I'd be supportive of, if not an outright ban on Chinese imports, high tariffs at the very least. And if that makes us worse off economically, so be it. The government can start by reversing its Huawei/5G decision. 

There's much more the government will need to do in its post-Covid (essentially a post-war) settlement with the UK population, and I'll cover that next time.