IN HER barnstorming speech to announce her candidacy for the leadership of the Conservative Party, delivered in Birmingham on July 11th 2016, Theresa May promised nothing less than to fix capitalism. The gap between workers’ and bosses’ pay was “irrational, unhealthy and growing”, she said. Managers were rigging the system so that they were unaccountable to all but themselves and their doppelgängers. British productivity was dismal. Mrs May said she had heard, in the Brexit vote, a cry for reform. She invoked a long line of Tory leaders, from Robert Peel to Margaret Thatcher, who had taken on the powerful in the name of the people, and suggested that she was considering radical measures, from putting workers on boards to tightening takeover rules.

Thirteen tumultuous months later Mrs May has finally got around to addressing Britain’s “irrational” and “unhealthy” pay gap. Listed companies will publish the ratio of bosses’ pay to average workers’ pay, the government declares. Remuneration committees will consider the wages of ordinary workers when they set executives’ salaries. Companies will have to nominate a director for the workforce or create an employees’ advisory council. Firms that suffer a shareholder rebellion of more than 20% when setting executives’ pay will have their names entered in a shaming public register.

These proposals were immediately rubbished, not just by the left but also by Tories who had been persuaded by Mrs May’s argument that if capitalism’s friends do not reform the system, its enemies will do it for them. The government’s proposals repeatedly invoked the two greatest weasel words in the modern lexicon: “transparency” and “accountability”. They suggested risible penalties such as having your company’s name inscribed in a book. Frances O’Grady, the head of the Trades Union Congress, accused Mrs May of backing down from her promise to tackle corporate excess and put workers on boards. Robert Colvile, the editor of a right-leaning website, CapX, said that by defining executive pay as a problem then producing such a feeble solution, Mrs May had simply whetted the appetite for Corbynism.

This is unfair. In a world where people habitually call for “radical” overhauls, the green paper should be praised for its moderation. Mrs May’s proposals comply with the most important rule of policymaking: first do no harm. She has dropped ideas that, though eye-catching, might easily have proved damaging, such as mandating workers’ representatives on boards (which could be hijacked by trade unions) or providing shareholders with an automatic veto over executive pay (which again could be taken over by a minority of noisy activists).

There is no solid evidence that Britain’s bosses are “overpaid” as a class. Heads of FTSE 100 companies earn more on average than their continental counterparts but they also earn between a third and a half less than their American equivalents. Inequality has been declining in Britain since 2007. Nor is there firm evidence that bosses are freeloading. The government has tightened up the rules governing corporate behaviour in the light of two pieces of American legislation: the Sarbanes-Oxley reforms which followed the Enron scandal and the Dodd-Frank reforms which followed the global financial crisis. Boards are more likely to sack underperforming bosses than they have ever been.

The real problem with Britain is not an excess of fat cats but a shortage of cream. And the real problem with Mrs May’s reforms is that she is focusing on bosses’ pay rather than the performance of the economy. Britain no longer punches above its weight in producing world-class companies. Though Rolls-Royce and HSBC still play in the global premier league, BP and AstraZeneca have fallen into the second division. Britain also continues to struggle to produce successful middle-sized companies. Whereas Germany has a “fat middle”, with thousands of smallish global champions, Britain has a bimodal economy with a handful of gazelles at the top and a mass of zombies at the bottom. McKinsey calculates that 66% of British workers work for “low-productivity” companies, compared with 55% of Germans.

The result is an underperforming economy. In 2015 Britain ranked third from the bottom in the G7 for productivity, above Canada and Japan. French workers, whom the British like to dismiss as holiday-hogging sluggards, are more productive than the British. Moreover, Britain is falling farther behind. As long as this continues, its economy will remain stagnant and its polity will continue to be convulsed by anger and resentment.

Fixing Wernham Hogg

There is a great deal of painstaking academic work exploring the reasons for Brito-sclerosis. The OECD says that management innovations are increasingly being stuck in a handful of global super-companies, rather than diffusing through the economy. Stickiness is worse in Britain than other advanced countries. The London School of Economics has documented that good management is the key to productivity growth and that Britain has a long tail of poorly managed firms. A third of British companies have seen no rise in productivity since the turn of the century.

These all point to the same conclusion: the real enemy is David Brent. Britain has far too many second-rate, sloppy, oafish managers of the sort caricatured by Ricky Gervais in “The Office”. There are some good ideas for addressing Brentism. Charlie Mayfield, the chairman of John Lewis and head of a government-appointed Productivity Commission, has suggested creating a mentoring system which would allow successful companies to teach smaller ones (particularly their suppliers) the art of management. The government is thinking of freeing up funding for management training, rather than just technical training. But improving British management will require a lot of hard slog and unspectacular work. Bashing the fat cats is far more satisfying than engaging in serious reform.