Texas Calculatem and Poker Office Blog

A few months ago, Harriet Harman, a Labour MP, criticised city bonuses:

"The big gap between those at the top and those at the bottom makes for a sick society."

And in the past week, Labour cabinet minister Peter Hain has attacked bonuses again, stating:

"We've lost a sense of moral corporate responsibility here."

(click here to read more)

While I'm a long way from 7 figure bonuses, I certainly don't think that these sort of statements are improving British society.

For a start, the implication is that the people bringing in the big bucks are immoral, and are reaping the rewards from other peoples' work. This can cause people to become envious the successful, rather than trying to emulate them by either working hard or coming up with entrepreneurial ideas.

Also, one of the areas that generates big bonuses is trading. Traders make cash by betting on inefficiencies in the financial markets, risking their own (or their company's) cash in the process.

Suppose a trader has a good year and makes £10 million in a year. Are they then supposed to pay themselves a £30k salary and give the rest to the monkey in the local MacDonalds? Suppose they then lose £5 mil the next year. While being up £5 mil overall, having given away most of the previous year's profits, they'd be fucked.