Principles before pounds, please

James Bryce observed in 1888, in the American Commonwealth, that "politics has now become a gainful profession, like stock broking, the dry goods trade, and the getting up of companies." Even if this remains the perception of many, it is not accurate. A minor politician's vote can wield more power over his citizens' affairs than the highest-paid corporate manager, who will be lucky to be a footnote of a footnote in history.

Besides power, perks and privilege, politicians in office are kept in high style. And on the question of salary, they are paid about three times the median wage of their electors. Contemporary politicians do very well compared to their predecessors. British parliamentarians did not receive any salary before 1911, at which time British Prime Minister David Lloyd George stressed that newly instituted public support would in no way "be a recognition of the magnitude of the service".

As Hayek suggested, to reduce corruption politicians must be comfortably supported by the state in their retirement, and in the US, Britain, and Australia this has traditionally been the case. Yet, as the trend for politicians to seek private employment grows, this wise custom is fading.

In 2004, Australia dramatically curtailed its parliamentary pension scheme on the back of populist, myopic rhetoric from the opposition leader, Mark Latham. On January 17, the Times of London revealed that the British government was considering abolishing parliamentary pensions, which "were no longer justified". Members now seemed to provide adequately for themselves in retirement.

Politicians should avoid the minutiae of profit-making, yet a wide range of less suspect pursuits still awaits them, some still lucrative. Paul Wolfowitz and John Bolton retired to eminent think-tanks. Margaret Thatcher and Bill Clinton worked the speakers' circuit, a path soon to be trod by former Australian Prime Minster, John Howard, who joined the Washington Speaker's Bureau on January 18.

It even used to be the case that senior politicians would return to less glamorous political positions following electoral defeat. Twice-serving British Prime Minister Harold Wilson sat on the backbenches of the House of Commons for seven years after his resignation in 1976; Australia's Billy Hughes stayed in parliament for 29 years after his prime-ministership ended in 1923. A whole gamut of transparent vocations avail themselves, from academia to advocacy. In contrast, writing secret reports for investment banks, for example, is unseemly and should be unnecessary.

But are we unfair to restrict the movements of politicians following office? Actually, such restrictions already exist in the private sector. Senior staff at hedge funds are unable to work for other hedge funds for a considerable period following their departure. Hedge funds' trading strategies are proprietary, and the conflict of interest is obvious.

Indeed, far from demanding too high a standard from our politicians, we may not be asking enough. Peter Oborne's 2007 book, The Triumph of the Political Class, demonstrates in gripping detail the standard to which British political life has fallen. Moreover, an Internet search for "political scandals" harvests far more results than the corporate sort, yet by number politicians are but a tiny fraction of senior corporate leaders.

We have held our public leaders to account at least since Cicero prosecuted Verres for fraud in 70BC. Indeed, from the mid-19th to the mid-20th centuries we have held politicians to higher standards than we might expect from private citizens - "a rule of virtue", as William Gladstone's biographer, HCG Mathews put it.

It is hard to imagine Winston Churchill raking in the cash with Barclay's Bank follow his term as prime minister, or Dwight Eisenhower offering commercial insights on the board of McDonnell Douglas. Yet today, Mr Blair's latest appointment has provoked relatively little fuss.

But it is not inevitable. Weber also said "either one lives 'for' politics or one lives 'off' politics". We can attract the former and discourage the latter by setting firm legal ground rules. Opposition parties should agitate for a kind of Sarbanes-Oxley Act for politicians, one that proscribes any corporate employment post-office. And unlike the anti-competitive fears surrounding the real Act of that name, politicians could not seek office in more lenient jurisdictions! The unique offerings of a political career have always ensured a persistent supply of budding politicians, whatever the remuneration.

Senior retiring politicians in Commonwealth countries retain the title "Right Honourable" until they die. This well summarises the esteem in which high public service has been held, and should be held. The Right Honourable Anthony Blair is wrong to work for the American finance house JP Morgan so soon after leaving office, while his former government still sets the rules for the City of London.

Ongoing confidence in our liberal democratic institutions depends on our legislation being free from the perception and reality of conflicts of interest. This becomes even more important as the size of government becomes ever larger, and legislative actions encroach ever more on our daily lives and property.

But legislation is only an emollient; electors bear ultimate responsibility. To quote Samuel Adams: "

[N]either the wisest constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt. The truest friend of the liberty of his country [is he] who tries most to promote its virtue, and who, so far as his power and influence extend, will not suffer a man to be chosen onto any office of power and trust who is not a wise and virtuous man.