Salary capping

[pilliwinks]

Economics seems to be in vogue at the moment, so I thought I might put in my 5c worth.

It is a common practice in professional sporting competitions for salary caps to be imposed. The rationale as far as I can tell is the following:

The primary objective is for the clubs to make money. To do this they need lots of interest (ie TV watching) of their competition. To do this, they need to have a close contest (if the same guys always win, fans get despondent). To ensure a close contest you need to make sure that the rich clubs can't just hire all the best players and become invincible. To make it possible for small clubs to get decent players they impose several schemes, one of which is salary capping - that way even the best players are within reach for the smaller clubs, who can compete by offering other incentives (lifestyle/location/team spirit etc).

This scheme has the merit not only of making a more exciting competition, and more money for the clubs, it is also widely regarded as 'fair', to the extent that clubs found to be exceeding the caps are roundly denounced by the media.

So much for sports.

Why not apply such a scheme to everyone?

Tight competition is not only a good thing in sport, so why not put the great innovators in business within reach of the smaller companies?

Before you label such a scheme as pinko socialist madness that undermines the values that made this country great, please consider the possible benefits and also that the cap can be very, very high.