This is a rum one from Corbyn


  Well, perhaps not all that strange, given what little we think Jeremy Corbyn knows about business and economics. He's decided that companies should not be allowed to pay dividends to shareholders unless all staff are making the living wage. This fails on two counts: on the detailed knowledge of how the business world works and upon the underlying economics of wages works.

Here's the ramblings:

Companies should be banned from paying their shareholders dividends unless their staff earn the living wage, Jeremy Corbyn has said.

The Labour leader wants to ban chief executives from handing financial returns back to investors if they rely on “cheap labour” for their profits.

Well, partnerships don't pay dividends: thus partnerships, and there's a lot more of them out there than most people think, won't be covered while that small portion of limited companies that do are. It's simply not sensible to divide the economy in this manner.

But it's the misunderstanding of the economics that's so painful. For of course this will lower the amount of capital that is put into British business. But more capital going into British business is what raises wages. Good grief, even Marx got this right, it's the capitalists competing for the services of the workers that raises the price of labour. Thus we want more capital coming in, not less.

Corbyn's proposal will, over time, lower UK wages. And the tragedy is that he simply doesn't understand this, nor does his coterie.