Corporatism Incorporated

As a consummate Marx-denier I find myself in an unusual position. The big international reveal of the last week is something that creates a clear space in the ideological market for this waywardly leftist position, and I have to concede at least some recognition for its legitimacy. I will personally choose to continue rejecting Marxism, for reasons I’ve alluded to here, but there can be no doubt that the actions of corporations such as Apple, Amazon and Starbucks, among others, are salting the already open wounds of the lower and middle income sections of developed societies.

The US Senate has been grilling Apple’s Tim Cook over this matter and it seems the disconnected and beleaguered CEO doesn’t get it yet. Instead of recognising the morally indefensible but ludicrously legal position of having paid literally a fraction of a percentage in taxes thanks to a convoluted network of subsidiaries and tax havens, the man is refusing to repatriate around $100bn back to his country where it can rightly taxed for good social effect. He claims corporate tax rates of 35% in the USA are too high and such a manoeuvre would never be undertaken unless the rate was dropped.

Starbucks hacked and slashed at their employee perks after an underwhelming and nominal voluntary tax contribution to the governments that had caught them red-handed in the tax avoidance game. Both cases are clear signs that corporate understanding of their relationship with society is a cynical one at best. Make them pay a fair share? Hah! Never, and if you try the workers will pay for it before the profit margin and reinvestment for expansion ever does. I’m sure the CEO’s and shareholders realise what kind of environment they’re gradually engineering.

Before I get on to the roots of why I think this is fascinating, it’s worth mentioning that this problem can only be solved with international cooperation in terms of shutting down the kind of negligible corporate tax rates that places like Ireland offer. Governments need to robustly pursue this agenda and not be cowed by corporate threats. But this is less a problem with capitalism, which if the state well regulated is to me the greatest option on the cards for humanity, but more a continuation of the problems of financial neo-liberalisation, corporatism and passive consumer behaviour.

This is the current narrative. Global recession, brought mostly about by deregulated and irresponsible financial sectors, has had a disproportionate impact on the poorer elements of society as growth and living standards have broadly faltered. This is set against the vast increase in the wealth of the smallest percentage of society at the top of the economic ladder, and the gap between the wealthiest and the poorest is the greatest it has ever been. Civil unrest has been present throughout many parts of Europe and in the USA, although there with a less riotous tone, and although it has largely been directed at governments so far, the sentiment will shift.

Or it should. In the face of European and American lawmakers piling scorn upon the chiefs of these industries, and the response being belligerence and threats, the ill-feeling should start to shift in the direction of the corporations. This distinctly corporatist mentality of theirs should resonate extremely poorly with civil society, unless we truly have become a passive consumer society and don’t care anymore about all the elements that interact with us at the centre. If we are content that Apple and entities like it get to operate under their own rules and not contribute, then that’s what will happen.

Yet despite the heinous inequality in a system where the average earner is paying around a quarter of their earnings to the public services and securities that everyone enjoys, but Apple are paying less than a half of a percent thanks to genius tax lawyers cutting their exposure, I don’t expect to see a backlash. I don’t think we’ve learned to get angry at companies yet, and are still too comfortable deferring blame onto the governments that are proving somewhat meek in addressing the underlying problems. You see, we still want our bought morning coffee and iPod for the commute.

So unwilling as we are to take command of our consumer powers, something which the likes of these corporations are infinitely more afraid of than workers unions, we will continue to undermine our own democratic processes with plummeting confidence in the governments we elect and thereby have more accountability to us. In doing so we’ll empower these corporations to the point that governments almost wholly takes their cues from people like Tim Cook. Conspiratorial you say? Well, Google’s Eric Schmidt has been sitting on the UK government’s Business Advisory Group for some time.

Short of the unlikely anti-corporate revolution and perhaps the also unlikely decisive and cohesive international action, we’ll continue to slide into a relationship between government and business that sees them less and less distinguishable. Corporations already make the dubious argument that what’s good for them is good for ‘people’, or rather their broadly undervalued employees, and governments aren’t entirely averse to that idea. Slowly, but I think surely, corporatism is looking to be the future.


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