Even when we’re shareholders, we’re never only shareholders

 a con, Apple, corporation tax, corporations, Facebook, fallacy, Google, privacy, share prices, shareholders, tax dodgers  No Responses »
Dec 272012
 

Paul has a nice piece today on why the New Year should bring about a massive disconnection from Facebook and all its works.  Conclusion and the how-to as follows:

Here is a link to instructions as to how to delete your Facebook account. If you have the strength, go for the real ‘deletion’ rather than the ‘deactivation’ method. If you just deactivate, you’re leaving your data there for Facebook and their partners to exploit…..

Meanwhile, from the Telegraph and also this morning, how Facebook’s own family sometimes gets the privacy settings wrong:

Randi Zuckerberg, the sister of Facebook chief executive Mark, has complained after a “private” photo she posted on the social network was spread on Twitter by someone she had not intended to see it.

No connection between one and t’other, of course.

*

What really caught my bleary eye though – being just after breakfast whilst I supped the last of my torrefacto coffee – was this report from the always ahead-of-the-pack Reuters: this time, on the subject of how rising profits by transnational corporations in the UK equal falling tax revenues for the state:

Big companies in Britain now pay less tax than they did 12 years ago despite a big jump in profitability, a Reuters analysis of official data shows. Tax campaigners say the trend is the clearest signal yet that tax avoidance has blossomed under a more business-friendly strategy at the UK tax authority Her Majesty’s Revenue and Customs (HMRC).

The article, at least for me, makes sickening reading – especially when companies like Google find themselves in the following position:

Google, for example, channels $4 billion of UK sales through Ireland each year, most of which ends up in Bermuda. Google said it complies with tax law in every country in which it operates but that it also has an obligation to its shareholders “to run our business efficiently”.

The problem is that even when we are shareholders, and even when companies have a responsibility to us as such, we are never only shareholders.  We are also frail human beings who will one day fall desperately ill and will be in need of the support of our fellow men and women; we are also parents, sons and daughters with responsibilities to children and progenitors; we are also democratic citizens with an obligation to participate in democratic discourse.

All of the above-mentioned does, therefore, have a cost – and a price.  A cost – and price – the powerful prefer to ignore.

The limited focus that corporate executives choose to bring to their responsibilities is easy – and simultaneously facile.  Facebook decides that advertisers’ wants must operate above and beyond even its owner’s family privacy; Google decides that its shareholders’ finances (even where these shareholders are also parents, pensioners or the disabled) must weigh more heavily than the schoolchildren, patients and infirm of the communities they make their humongous profits from; and, in the meantime, our very own governments – both Labour and Tory it would seem – decide that they must court corporate investors more carefully than the people who made the mistake of voting those selfsame governments into power in the first place.

It’s a fallacy, I’m afraid.  Even those people who are made of money – and who make it their business to make more of  it – aren’t ever only moneymakers.

One day they will also be helpless citizens – just like the rest of us.  No amount of money can ever change that.

No amount of money can ever do more than postpone that event.

No.  It’s not enough to say that we have a responsibility to shareholders.  When we say that, we mean we only care to see one facet of terribly complex beings.  It’s a lie to argue that we must make more money regardless of the hows – simply because these shareholders allegedly have their foot on the accelerator pedal of a massive multiplication of amoral income at the expense of other more thoughtful behaviours.

Please think again, those of you who can.

Please thing again, before this all blows up in our faces.

*

I was kind of involved, a couple of days ago, in a Twitter exchange between two diametrically opposed positions.  One person argued fiercely in favour of an intervening state; the other argued, just as strongly, against the inefficiencies – and even the corrupting influences – of such structures.  I bowed out of the debate, and let it rest there and then.  But I didn’t forget the points made.  And I was reminded of them today with the absolute absence of moral judgement which the Reuters’ investigation so sadly threw up.  The behaviours thus described were the choice of men and women working in large institutions as big as many nation-states.  Yet they were all, without exception, working in the very private sector.  So when we talk about inefficiency and corruption in such nation-states, we tend to forget that private industry can be as inefficient and corrupt as any poorly-run state.

The only difference being, perhaps, that the public sector is eventually that: public.

Whilst the private sector prefers to remain generally t’other: private.

*

A final story tonight, again from Reuters, on that icon of 21st century corporate amorality which, in a very biblical sense, finds itself quite appropriately named Apple.  In this case, we discover the obscenity that involves an annual salary of $4 million equalling a 99 percent cut – in relation, I do admit, to temporarily inaccessible paper values – on the previous year’s earnings.

It’s really too difficult for me to fully comprehend how casually upside-down our world has become.

Do you understand what’s happening?

For I certainly don’t.

Any explanation you can think of which doesn’t involve  further biblical references?

Memo to HMRC: Corporate Boycott app required!

 apps, corporation tax, corporations, HMRC, in a hole, on a high  4 Responses »
Oct 162012
 

This is what the Guardian‘s poll claims about Starbucks’ UK operation:

The coffee chain company has used legal tax-avoidance tactics to pay as little as possible, paying £8.6m in taxes on a reported £3bn in UK sales since 1998, and nothing in the past three years. Is this OK?

At the time of writing this post, 93 percent of people say it’s not OK.  The other 7 percent are presumably employed by Starbucks’ clearly well-staffed tax department.

There’s more on this matter in the same paper today in an article which draws a wider conclusion:

The UK international tax system is failing us. HMRC say they can’t do anything about that: candidly I don’t believe them. They could stop sacking staff, for a start. But even if that were true they would still have a duty to point out the fact that the system is not working fairly and to suggest to ministers ways in which the system should be reformed.

For it’s not just Starbucks; there have been plenty of other high-profile cases.  After all, if the laws allow it, we can hardly expect managerialist organisations to feather anyone’s nests but their own.

It is, as Richard Murphy points out in the above quote, the system that is failing us.  And again, at least according to Murphy, HMRC has apparently thrown in the towel.

Well, I’ve had an idea which could help HMRC.  It’d almost certainly pull in a broad and crowdsourceable response and could even help to reduce the organisation’s own overheads.  This brilliant idea?

How about it promotes a Corporate Boycott mobile-phone app?

So how would this work?  Something along these lines:

  1. The objective of the app would be to allow consumers to compare and contrast the percentage of corporation tax paid annually in relation to turnover by a shop or company or other institution before a decision to purchase was made.
  2. The app would piggyback off public domain data already in the possession of HMRC which would allow such a comparison to be made.  A website could be set up which would allow web users to access the same data.
  3. Instead of consumers having to manually keep track of every company the media continues to reveal as the latest tax-avoider we knew nothing about, the app would do this automatically on our behalf according to criteria which could be set.
  4. Options could include sorting via sector; nationality of head office; philanthropic activities; community engagement; ratio between highest-paid and lowest-paid workers; salaries of executives; bonus arrangements; environmental awareness; and the percentage of internationally outsourced jobs.

Obviously, not all the information in point 4 would necessarily be in the possession of HMRC, but I’m sure there are enough open-data organisations out there who’d be perfectly happy to supply the missing information.

The advantages of such an idea?  It’d be entirely free-market driven by consumers.  HMRC wouldn’t need more staff to chase down tax avoiders or even evaders – as long as the data used was reliable, accurate and up-to-date enough, it’d be the consumers and purchasers who’d eventually bring the errant companies, corporations and organisations onside.

Downsides?  The veracity of the data would have to be absolute: imagine the legal implications if a company’s stock market value suddenly plunged because of an erroneous judgement the app simultaneously led millions of consumers to take.

So expensive data – but surely no more expensive than a credit crunch and resulting economic dislocation, millions of unemployed, people suddenly made homeless and a rapidly crumbling health, care and education infrastructure.

What do we say then?  Anyone want to work on this one?  Anyone in open data circles interested in doing the job which HMRC is clearly not up to all on its lonesome?

The price of success is failure

 a con, boardrooms, Bob Diamond, corporate Communism, corporation tax, corporations, failure, money, monopolies, success  No Responses »
Jul 052012
 

The Guardian reports that thirty NHS trusts have accumulated between them a deficit of £300 million.  Presumably, the government will have to bail them out.  That shouldn’t be such a grand task for Whitehall’s busy bees – after all, they’ve had plenty of practice in recent past of hand-over-fist bailouts for the banks.

Meanwhile, I also read the following from a short article in the Telegraph this morning:

[Bob] Diamond, along with David Cameron, was a very public supporter of John McCain, the last Republican candidate for the presidency, when he ran against Barack Obama in 2008. [The current Republican candidate for the American Presidency] Romney earned a $50,000 speaking fee from Barclays in 2011.

Now I suppose you could argue that as Barclays wasn’t nationalised at the time (though this, of course, could quite easily change), such a payment to a foreign politician was purely a matter for Barclays and their shareholders.  But I do wonder if even a significant minority of customers were aware that the profits their business generated for the entity were being employed to fill the already deep pockets of American presidential hopefuls.  Customers are also stakeholders, aren’t they?

Or so they say …

The truth of the matter is that the price of success has clearly become massive failure.  Yesterday, I quoted from another Guardian article where it described how the atmosphere of fear amongst ordinary bank staff clearly made it impossible for alarm bells to be sounded.  I remember, myself, when I used to work at data-inputter level for a bank, how we would get bombarded with messages and training courses from HR insisting on the importance of learning from mistakes.  However, the only real lesson we learned from making mistakes was not to run the risk of making them again.

And one of the biggest mistakes you could commit in a bank was to question the exhortations of your bosses.  Especially as an ordinary worker you were only assigned a five percent bonus on a salary less than the national average.

Your importance was clear.

So it comes to pass: Mitt Romney is no longer friends with Bob Diamond.  As the Telegraph also reports:

“When we first started organising it, Bob was perceived to be a respected captain of industry in Britain, and precisely the sort of man that Mitt would want to be photographed with when he comes here,” one of the organisers of the event tells me. “Obviously, the situation has since changed somewhat.”

Which leads me to arrive at the following conclusion: if the price of success, especially short-term corporate success, is becoming awful and consequential failure for everyone – CEOs, managers, workers, customers, the poor, the rich and the squeezed middle too – do we not define success incorrectly?

For if failure involves committing the mistake of daring to question what others do, we are surely in the world of Nuremberg all over again.

Stalinism has won, hasn’t it?  Only now it exists behind the closed confidential walls of large companies across the globe – companies which have learnt to avoid paying social taxes through a multitude of tax-havened schemes.  No wonder telling your boss he or she’s got it wrong has fallen so dramatically out of favour.  The environment of secrecy which must grow up around such mentalities leads everyone to see shadows almost everywhere.

In truth, we’ve forgotten the true definition of success.

And – in that short and unprepossessing conclusion – we inscribe the enormity of our failure.

A popular and realistic revolution for the latterday left?

 capitalism, class war, class warfare, corporate lobbies, corporation tax, corporations, Darwinian capitalism, Greece, IMF, in a hole, latterday capitalism, latterday socialism, revolution, trades unions  No Responses »
Jun 162012
 

Alex provides the data, if data was still needed, about the IMF and the Greeks. All I am minded to remark is that whilst billions of euros have been withdrawn from Greece in the first half of the year by private investors, escape from the country’s miseries isn’t so easy for the workers who might wish to emigrate out of them.  Capital versus labour – it’s always the same story: freedom of movement for the former (with all the traumatic implications for ordinary people’s economies which such freedoms lead to); all kinds of practical barriers, including media prejudice in host countries, for the latter.

This is perhaps one excellent reason why Greeks should leave the euro but stay in the European Union.  Get that competitive edge back which Europe’s denied varying velocities lost – but hang on any which way you can to the right to work wherever you want.  Beat the capitalist investors at their own game perhaps?

Meanwhile, here’s another piece of evidence about how the world we live in is unfair: in this case, how the fall in trades union membership mirrors exactly the rise in wealth inequality (graph here).  Our intuition might have told us that trades unions battling against amorphous and various employer organisations would help, in an imperfect civilisation, to create less unfair societies – but this post goes much further than massage our prejudices.  This post confirms a reality with immediately understandable data.

From the Facebook page "Connect The Dots USA"

Finally, an image I published not long ago from a Facebook page I’m subscribed to called “Connect The Dots USA”.  It clearly indicates how difficult providing social and welfare services will become in the future, especially as the real levels of tax American corporations pay are so far below the nominal 35 percent.  Remember, these are the same bodies which use public roads, pollute public land, sell junk food to schoolchildren and sign overblown contracts for the provision of public health services – as well as make money out of publicly funded armaments and IT projects (so many of which curiously tend to run dramatically over budget).

All examples, in fact, of the ways they have chosen to take advantage of federal and state infrastructures which they no longer see the need to contribute to.

And I am sure – as well as fear – that the situation in the UK is becoming evermore analogous.

Of course, it goes without saying that those of us on the left have often been accused – perhaps accurately – of class envy.  This argument would have us believe that we don’t act out of a pragmatic understanding and acceptance of the world as it is.  Rather, we refuse to accept that life is unfair and that such injustices are a given for those who have the good or bad fortune to be born into this universe.

After fifty years on this planet – yes, I share my birthday with that literary-fest that is Bloomsday! -  I can’t argue with the partial truth of that assertion.  But where I do disagree with the Darwinian capitalists is in their implicit understanding that life – and the world in general – is only as unfair as it must be.

Today’s three examples give those of us who believe in social, economic and cultural justice the right to sustain the position that this world is an unnecessarily unfair world – and from that moment onwards, fight to eliminate any unfairness which escapes the necessary injustices of an often incomprehensible universe.

If those of us on the left are looking for a pragmatic way of channelling the manifest – and long-predicted collapse – of capitalism, we could do far worse than to argue that in that point which lies between an unfair and an unnecessarily unfair existence we can usefully pursue a popular and realistic revolution.

A popular and realistic revolution we could use to revalidate the latterday left.

The true value of bread

 bread, corporation tax, corporations, unclassifiable  No Responses »
Jul 282011
 

When we find ourselves in Britain, we eat most every piece of bread we buy.  It seems wrong to throw anything away – the drier stuff just gets toasted anyway, so along with the prepared food and microwave meals, our diet presumably takes a tumble.

Or, alternatively, we maximise our value.

Yet, here in Spain, the stale halves of their delicious barras – when they do pile up – do not get eaten.  The bread here is so good, you simply cannot allow yourself not to fully enjoy the following day’s ration.

This, then, is the true value of bread.  Whilst its quality is poorer, it trains you to value yourself less – you deserve less of life it would seem is the lesson we then arrive at, and are thus inclined to put up with the previous day’s servings.  Meanwhile, the better the bread to hand, the more likely you are not to eat leftovers in the full knowledge that the value thus added of eating its freshly baked examples is so much greater.

To summarise then, the worse the product, the more likely you are to eat leftovers; the better the product, the less likely you are to put up with second best, even when that second best is an old example of that better product.

I wonder if this principle can be applied to any other area of human endeavour.

This morning, for example, I woke up thinking about corporation tax.  Shortly afterwards, I read an article on my Kindle from today’s Guardian which described how one arm of the Virgin empire was moving its entire operation to Geneva to save paying the above-mentioned tax.  One of the comments from an observer exhibited surprise at the amount of tax the company was currently paying in Britain, wondering why its tax advisers had been doing such a bad job.

And this is when I began to wonder why when we talk about corporation tax, we never talk about value for money.  The debate seems to be centred, at least by the right and maybe even by the left, around the proportions and ratios of earnings versus tax that different organisations pay.  Surely, however, there is an alternative way of seeing all of this which hasn’t been fully explored.

Yes.  Corporate bodies are aggressive entities, looking to maximise above all short-term gain over long-term investments as they externalise as many costs as they can to the rest of society.  But in such externalisation, wouldn’t it be fair for the rest of us political beings to argue that such companies should evaluate what they pay in terms of value for money and, above all, the quality which the society they contribute to offers them in exchange?

Not in bald monetary terms – though there’s that as well.  Rather, I’m thinking of a concerted long-term education piece by left-wing politicos in particular with the objective of convincing big corporate bodies that they should move their companies from country to country not on the basis of where the corporation tax is lowest but, instead, where the services purchased – ranging from transport and communications to the levels of ingenuity and creativity of an educated workforce – are most value-adding for both parties in the exchange.

Maybe we need two indexes to fully appreciate the value I am describing.

One, to describe the ratio between tax levels in and public services out, and so allow for comparisons between different countries.  Here, the differences revealed would presumably encourage nation states not only to improve the efficiency of their services in a technocratic way but, more obviously, lead to processes which might eliminate the kind of waste that endemic corruption of the sort we have seen in Italy and now Britain engenders.

The second index would allow us – in a similarly constructive and objective manner – to compare companies and how much value they really added to society.  In this sense, grants, facilities, support and red-carpet welcome treatments could then be apportioned to those organisations which the index determined added to a society in particular the value – and values – the society in question was looking to acquire.

In much the same way, then, as good bread teaches us to demand more of our food, these two indexes would allow us to properly understand and comprehend what both parties to the transaction should be looking out for.  Corporations could better evaluate the real qualities of a society they would be looking to invest in whilst the societies themselves could better evaluate the real qualities of organisations looking to form part of existing communities.

As a final thought, I’m pretty sure that such indexes must already exist somewhere in economic thought.  The question this then begs is of course why they don’t inform our political debate as much as I’m arguing they should.

The British corruption I referred to earlier on – as journalists, police officers and MPs all chased each other’s tails in a most unseemly manner – is probably one explanation of why we haven’t fully explored other ways of understanding economic value in our societies.  The other reason may quite easily be that it’s much easier for mediocre leaders to make money out of beating down headline taxes than it is for them to get involved in generating the tapestry of complex communities.