Stop Bowing Down to Big Business

10.29.17
Garry Knight/Flickr
Business /29 Oct 2017
10.29.17

Stop Bowing Down to Big Business

One of the main stories arising from the aftermath of the Brexit referendum was the idea that it was a major blow for big business.

This isn’t quite true. Much of the aftermath of the vote has revolved around the plight of the banks that will have to move to Frankfurt or the manufacturers (those that remain) that will shut down. When the impacts upon ordinary people are considered, you often find Guardian journalists lamenting the thousands of jobs that will be lost as JP Morgan, Deutsche Bank and Barclays leave the country, giving the impression that it is thanks to their benevolence that we ever had any jobs at all.

Yet this isn’t just the case in Britain. In the US, a TV businessman was elected president. In France, Emmanuel Macron was elected (albeit with only 24.01% in the first round, against some pretty ropey candidates) claiming that slashing corporate taxes and making it easier to fire employees would lead the country out of its economic malaise. In Germany, Angela Merkel basically runs things for the benefit of German exporters.

I’m not sure these massive corporations have done much to justify the faith that we put in them. Let’s stop being so deferential to big business. Let’s stop falling for the narrative that corporate taxation is unfair or unwise.

Now, obviously there have been lots of protests around the tax arrangements of the likes of Amazon, Apple and Starbucks because they don’t pay taxes. Although some argue that these companies are bad, very rarely do you find the analysis going deeper.

The thing is — and we should perhaps bear this in mind when we find ourselves being swayed by stories of self-made CEOs or self-reliant corporate behemoths — businesses successes owe much of their success to the state. The gov’t pays for the transport network that allows businesses to move their products from factory to store and allows employees to get to work. The state educates employees and cares for them when they are sick and tops up the pay of workers if the business neglects to even pay them a proper wage. The judicial system provides a regulatory framework that allows businesses to enter into contracts and seek arbitration when things go wrong. State and local law enforcement keep the streets safe enough to run a business…Every single penny that a company makes is thanks, in some way, to the state. It’s thus only fair they give a bit back and ideally a little bit more than the current UK corporate tax rate.

Let’s stop lavishing big business with gratitude for providing jobs.

It’s a catastrophe for me!” says Andrew, 28, of Transport for London’s decision to refuse Uber a license for being a terrible company that can’t adhere to basic rules. This was a common refrain among the hundreds of thousands who signed a petition to “save Uber,” many of whom cited the impact upon the 40,000 Uber drivers who stood to lose their jobs. All of a sudden, the lost jobs were TfL’s fault rather than Uber’s (who lost their license for failing to follow the rules). Horrible, sexist, exploitative Uber suddenly became the good guy. They provided 40,000 jobs! Of course, what we really should have been saying is that 40,000 people provided their services to Uber. 40,000 people were denied basic employment rights and often paid less than the living wage, as Uber profited.

Businesses don’t give us jobs because they’re really nice and take pity on us. They give us jobs because they need people — often, skilled people — to work for them. They need us. Let’s remember that.

Let’s stop pretending businesses are better at running things.

I’ll keep this brief, because this is a simple one. A business is judged by how much money it makes for its shareholders. That’s a single goal! A public sector organization — like the NHS— is primarily judged by the quality of service it provides, but it also has to do so while lowering costs. That makes things a bit more complicated, and a profit-making enterprise isn’t always best placed to run a quality service. Consider the examples of Atos, G4S or Southern Rail.

Let’s stop pretending businesses can do this without the state.

Big businesses — Silicon Valley in particular — aren’t quite as innovative as you might think. Every single technology in the iPhone received government funding of some form or another. Development of the Internet and GPS, among many other Space Age items, were funded by various bodies in the US security state. Meanwhile, in the UK, private sector innovation is really, really low.

Then there’s corporate welfare. The US oil giants’ continued donations to Republican political causes might suggest that they don’t think much of social welfare, but they don’t have a problem with corporate welfare. In 2013, the US fossil fuel industry received $550 billion in subsidies.

Let’s stop thinking that business acumen translates to politics. Remember all the people saying that what America needs is a successful businessman like Donald Trump to run America like a business? Hasn’t worked out so great, has it?

Remember when 103 business leaders wrote a letter to the Telegraph ahead of the 2015 election saying that an Ed Miliband government would be a disaster and that David Cameron was great and his policies showed Britain was open for business? Well, David Cameron gave us the Brexit referendum and soon Britain will be anything but open for business.

Let’s stop assuming they ever had any business acumen at all. Sure, you have Trump with his multiple bankruptcies, but beyond that: how can these people be that smart if they require the state to innovate for them? How can they be that good if they require the state to prop up the wages of their poorest paid employees?

What to do? Boringly, it’s probably well-enforced regulations. I don’t want to overlook the benefits business can bring, but we need to add a few more rules to the game. Pay a fair share for the public services you use. Treat your employees fairly and pay them what they deserve. Compensate the state if you benefit from their innovations and feel free to make a profit but don’t destroy the environment.

If you do not do all those things at once, then maybe you’re not very good at business.

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