It's Our Money … by Martin Willett

I am constantly amazed at the antics of the stars of the world of popular music. They have a desire to play and make music. They do it, they would do it for nothing, they want to do it. They get paid a lot of money for doing what they want to do, for being themselves and fulfilling their lifelong ambition. They get paid for doing what they would pay to do.

I am not saying that people should never be paid if they do something they enjoy, but come on! Why are we so stupid as to allow them to charge us, collectively, so much for doing what they really want to do?

They make a fortune for one simple reason; there is a large population. Nobody wants to give them a lot of money, but an enormous number of people are happy to let them have a modest amount. Most people have to make money by getting a reasonably large amount of money out of a few people. We manage this by giving the people with the money what they want. We sell goods and services, or we provide goods to sell or perform a service. We have to do what the customers want, or what the boss tells us. This is reality for most people. Pop stars do what they want, and get paid for it, far more than we do. And then they get angst ridden, and expect us to sympathize.

Who really cares what animals this musician takes to bed or who that musician votes for? It doesn't matter. They are musicians; they provide auditory wallpaper. Ignore the overpaid sods. They don't care about your life; they treat you as their flock of sheep, to be regularly shorn. Knock them of their pedestals, they are just providing a service, they deserve no more respect than any other worker in the economy.

They began by making music because they wanted to. When they became better at it they began to make money. Or rather, money was generated, and they were too envious to see that anybody but they benefit from it. It is convenient for them to believe that the money the sale of their work earns is rightfully theirs … that they have earned it. The money is in direct relation to their sales; hardly any relationship exists with their work, efforts, talent or "true worth". This way of looking at the situation does not suit the stars themselves. They want to believe that their talent has generated their wealth.

Everybody thinks they are entitled to the money they take and spend, including thieves, kings, welfare claimants (bogus as well as genuine), bishops and lottery winners. The human capacity for self-deception is endless, especially if it allows a person to have a comfortable, guilt-free life. Try this thought experiment:

A musician and a fashionable hairdresser both earn the same income. The next day the world population is reduced to 100,000. Everybody lives in the same hometown. Who earns what now? I suggest that the hairdresser stands the best chance of maintaining his income, he earns a significant chunk of money from every job he does. His income was limited by the amount of work he could do, not by the size of the potential market. For the musician things look bleak. He used to sell 100,000 records at a time when he had a potential market of the whole country, say 50,000,000. His music was good enough to persuade 0.2% of the people to buy a copy. Now he stands a good chance of selling 200 records, if he can find somebody willing to produce them. Don't give up the day job, superstar.

In contrast the hairdresser will still be in work, but maybe not such high demand. He will still have to keep his prices high to ration his available time between the number of people who want his services. He could never service everybody, but if he charged the same fee as the other less fashionable hairdressers he would see people fighting to get into his chair. The hairdresser earned good money because he could charge a limited number of people a large amount of money. The musician earned a lot of money because he could charge an enormous number of people a modest amount of money. There is a big difference between the two.

To my mind it is obvious that the hairdresser does far more to earn his money, even if he does charge an obscene amount for his time. There is a crucial difference in where the money is coming from; numbers or willingness to pay. The musician's customers were not, as individuals, prepared to make him rich. The hairdresser's were. The examples would work just as well if you substituted lawyer or surgeon for hairdresser and basketball player or film star for musician.

Think about it: where did the huge income come from, the huge talent or the huge number of people who might appreciate it?

I have absolutely no doubt that the hypothetical musician would explain to everyone who would listen how his enormous talent generated the wealth he was enjoying, how his art made demands on him, how he suffers in ways we cannot begin to understand. He needs a Ferrari; he has earned it. It's utter nonsense. Nobody in the history of humanity has ever done enough work to deserve that lifestyle. Some people can demand such an income because there are so many suckers. Barnum said there was one born every minute, he had the concept right, but he was out in his reckoning by whole orders of magnitude; there are thousands born every minute.

Tyson ain't worth it

Mike Tyson is a contender for the world championship, so he makes a lot of money when he fights because a lot of people are prepared to pay to watch. Now consider that he is suddenly twice as good a fighter, does his pay increase? It is not likely to double, it might well go down if he beats everybody too easily. How many people would pay-to-view a walkover? Instead consider if there were twice as many people in the world (just wait a few years if you can't imagine it) with twice the market Tyson would probably earn twice as much, more people to pay to watch.

Conversely if there was half as many people in the world his income is very likely to be halved. If on the other hand his talent halved he would earn only a tiny fraction of the income. Principally it's the numbers of people who are prepared to watch him that affects Tyson's pay. If there were ten new boxers better than Tyson his pay would be very much smaller, despite his talent being the same. Mike, if you are reading this, I am sorry, no offence intended, but basically, you don't deserve the money.

For most people the size of the national or global population is not important. You get paid a fair rate for the job or as little as they can get away with paying you. What matters to your wages is relative positions in labor markets, not absolute numbers. The demand for truck drivers in the USA is five times higher than in the UK, but the wages are much closer together, because each is balanced by a proportional supply of workers and proportional competition for workers from other industries. The same is not true for stars. If you are a star of Welsh television you earn much less than a star of American television, because of a big difference in the size of the audience.

People who make money by effectively taxing the population size should be taxed back by the people. Sports stars, pop stars, film stars, and the like who make money simply because the world is full of people should have to pay the surplus money back. Star Tax. You may say the stars would go abroad but I have an answer for that too.

Being a very good basketball player or footballer can get you a well paid job. But it is not your talent that generates the income it is the size of the paying crowd. Top sports stars get big money because a very large number of people are content to pay a significant, but not enormous, sum of money to see them play. That generates income for somebody; greed and envy then ensures that the star himself gets the lion's share of it.

Why should anybody get paid more just because the world is big?

Bill Gates deserves to be rich, but he doesn't deserve to be a multi-billionaire. He is rich because he sells products that people are willing to pay for. He is extremely rich because the world is big. It is the size of the world that made him extra rich, not his talent.

Jim Carey and Arnold Schwarzenegger think they are worth $20,000,000 for every movie they make. How many seats of a 1,000-seat cinema will they fill if they charged $20,000 a ticket? Nobody, on their own, thinks that these film stars do much to deserve our money. We are happy to pay them amounts that are similar to those we pay waiters or washing machine salesmen, less than we would pay to teachers, car mechanics or estate agents. Think about it: how much would you pay to see a show or sporting event? Less than you would pay to sell your house, do a major repair on your car or defend yourself in court. The stars don't do that much for us, as individuals. They take home millions because there are hundreds of millions of us, not because we think they are worth much.

It is not their money; it's ours. We earn it; they take it. It is time we took it back.