Socialists imagine a class struggle. In their made-up fantasy the CEO is in competition with low level workers, the wealthy entrepreneur is stealing from the underpaid nurse. In reality, workers do not compete vertically they compete horizontally. Entrepreneurs compete with entrepreneurs. Investors outbid each other. CEOs are benchmarked against other CEOs. Nurses are hired from a pool of nurses. Etc. The CEOs pay has no correlation to the entry level workers. The Football star on £300K a week isn’t linked to the person selling drinks in the stadium. A biotech entrepreneur raising VC capital isn’t paid relative to a cleaner. What is linked is the demand and supply dynamic of each role. If a company places an ad for a qualified truck driver and 150 people apply for the role, then the company knows it does not need to increase wages for that role. If the company has an open role for months, it is forced to look at the compensation package. Same for a CEO. A board representing shareholders would like to hire a CEO for a lot less if they could. Their dream scenario would be to hire a CEO who brings in institutional investors, attracts top executives, drives innovation and growth, keeps margins steady and is a good public face for the business even under pressure. It turns out there aren’t a lot of these people looking for work and if you want one you have to pay more than other companies are offering. The class struggle isn’t vertical it’s horizontal. CEOs are in competition with CEOs. Retail workers are in competition with retail workers. Demand and supply dynamics set the price. Sure you can say that a CEO want’s profitability and would like wages to be lower BUT it’s not up to the CEO - demand and supply tension sets the price of workers. An Airline like RyanAir would like free pilots if they could get them but they can’t… so they pay the market rate. The reason incomes are rising at the top and falling at the bottom is not class warfare. It’s technology and globalisation. Technology makes basic jobs simple, remote or fully automated. At the same time tech makes executive roles more leveraged, more important and more valuable. A CEO used to run a smaller organisation. Today a CEO who’s 2% better on a $5B company is generating $100M more. Seems sensible to try and pay a few million to get $100M. Globalisation has put workers from all over the world in completion with each other - downward pressure on wages. Globalisation has given CEOs more market opportunities to explore - upside opportunity to unlock. The rich are not very interested in buying houses that poor people own. The poor are not buying up the homes the rich want. They are separate groups living separate lives. Try finding the genuinely rich people whose strategy is to hoard normal residential homes - it barely exists as a thing. About 85% of landlords are people who own 1-4 properties. Super-landlords (100+ properties) are 0.2% of landlords and own a tiny fraction of the 30M homes in the UK… and they’re heavily taxed. Class warfare isn’t real. It’s an imagined war in the minds of socialists. Demand and supply dynamics are real. To the degree it is measured in class, it’s a horizontal competition not a vertical one.

John Lennon wrote a beautiful song about socialism. “Imagine no possessions” he told us. He also: – helped write his band’s anti-tax anthem, Taxman – incorporated his IP holdings – moved to a lower-tax country – fiercely protected his royalties - drove two Rolls Royce’s and had multiple luxury homes. – made sure even the royalty cheques for Imagine were kept safe for his estate so his family would remain wealthy in perpetuity. If he believed it, he’d have lived it. The trouble with socialism is that even the people who love the idea won’t run the experiment on themselves. John Lennon writing Imagine while owning two Rolls Royce Phantoms and later having a law suit to protect his royalties tells you all you need to know about socialism in practice. It doesn’t work outside of the imagination.