Monday, May 27, 2013

Robert Reich — Beware Capitalist Tools

Forbes Magazine likes to call itself a “capitalist tool,” and routinely offers tool-like justifications for whatever it is that profit-seeking corporations want to do. Recently it has deployed its small army of corporate defenders and apologists in the multi-billion dollar fight to keep the effective tax rates of global corporations low.

One of its contributors, Tim Worstall, recently took me to task for suggesting that a way for citizens to gain some countervailing power over large global corporations is for governments to threaten denial of market access unless corporations act responsibly.
He argues that the benefits to consumers of global corporations are so large that denial of market access would hurt citizens more than it would help them. The “value to U.S. consumers of Apple is they can buy Apple products,” Worstall writes. “Why would you want to punish U.S. consumers, by banning them from buying Apple products, just because Apple obeys the current tax laws?”

Wortstall thereby begs the central question. If global corporations obeyed all national laws — the spirit of the laws as well as the letter of them – and didn’t use their inordinate power to dictate the laws in the first place by otherwise threatening to take their jobs and investments elsewhere, there’d be no issue.

It’s the fact of their power to manipulate laws by playing nations off against one another – determining how much they pay in taxes, as well as how much they get in corporate welfare subsidies, how much regulation they’re subject to, and so on – that raises the question of how citizens can countermand this power.
Beware Capitalist Tools
Robert Reich | Chancellor’s Professor of Public Policy at the University of California at Berkeley and Secretary of Labor in the Clinton administration


Magpie said...

Well, let's think a bit.

Reich says nations could deny market access to a firm (say, Apple), as a punishment for tax avoidance.

Worstall says this would hurt consumers.

I sympathize with both positions.

Maybe I can find an acceptable middle ground, where neither nations lose their right to punish firms, nor consumers get hurt. In other words, a win/win situation for Reich and Worstall.

What if nations nationalize Apple Inc?


No need to thank me, Mr. Worstall. It was my pleasure.

The Rombach Report said...

Corporations don't pay taxes, their customers do.