Corporations and the wealthy have an input into the way society has run. But does that really matter?
Well, yes it does, for eleven reasons.
1. The needs of corporations and the wealthy are different from ours
Left to themselves, they’d organise the world in such a way that gave them maximum freedom and maximum income.
Apart from the most ascetic and thoughtful of us, most people would, do the same, in their position. It’s not surprising that so many people play the lottery each week, because they too would love to be rich and therefore powerful.
2. They’re stateless — and that affects their behaviour
The extremely rich consider themselves stateless, and therefore owe no allegiance to the country and its institutions or people.
Take James Dyson, the vacuum cleaner king. He condemned the UK government’s plans to extend employees’ right to work from home as “economically illiterate and staggeringly self-defeating”, saying it would “hamper employers’ ability to organise their workforce”((https://www.independent.co.uk/business/james-dyson-work-from-home-rights-b2241381.html)).
“Jobs will go to other, more ambitious economies,” he said, ominously. “In other countries where Dyson operates, we are given the freedom to organise how – and where – our staff carry out the roles they are contracted to.”
This came after Dyson moved his company’s headquarters from Wiltshire to Singapore, a state where they execute people, imprison writers, harass lawyers, and restrict the movement of migrant workers beyond their crowded dormitories, workplaces and designated recreation centres.
See: https://www.amnesty.org/en/location/asia-and-the-pacific/south-east-asia-and-the-pacific/singapore/report-singapore/.
If you, like Dyson, were to operate a global business, you might find your goal, like his, was to maximise profit. And that means choosing countries with the smallest costs and the lowest tax rates – as long as you can sell your products in countries with affluent consumers. Alternatively, you simply pretend you’re located in Luxembourg (population 645,000) as Amazon does, where it pays no tax due to its somehow ‘making a loss’, despite EU revenues of €44bn.
3. They avoid paying tax
The wealthy are often accused of avoiding or evading taxes. They do this through a variety of legal and illegal means, such as shell companies in tax havens. As a result, the wealthy often pay a lower percentage of their income in taxes than the middle class and the poor.
Paradoxically, the corporations’ revenues are entirely dependent on the counties where the population actually buy their products, such as the UK with its 67 million people, or the USA with 332 million.
Suggesting that the revenues are made in Lichtenstein or Luxembourg is basically a lie.
4. They rely on the state
In the countries where they sell their products, the corporations rely on the state to provide a justice system to ensure the rule of law, police officers to defend their property, and roads to carry their lorries.
They need a workforce to drive those lorries and stock their warehouses. And they expect the state to provide teachers to educate their workers, a health service to look after them if they’re sick, and a state pension to care for them in their old age.
But they don’t see why they should contribute. Mostly it’s a defensive statement, such as the one provided by Amazon: “Amazon pays all the taxes required in every country where we operate.” That’s a weasel way of saying, “We pay our accountants to ensure we pay the minimum required by the law.”
The companies depend on structures developed by the state. The internet was created by by public agencies: Nasa and Darpa (the Defense Advanced Research Projects Agency).
The world wide web, which made the internet accessible, was created by Sir Tim Berners-Lee as a royalty-free system in 1989, to ensure everyone around the world could benefit from it. Without these developments, businesses like Amazon, Uber, Spacex or Tesla couldn’t have developed.
And if Elon Musk or Google had created the internet, you, me and the rest of the world would be paying them a fee every time we switch on our computers.
5. Their philanthropy is overstated
The rich love to tell us how much they give to good causes. But these are causes dear to their hearts, which is why opera gets lots of money. The causes are usually anodyne and uncontroversial. It can be self-serving or ineffectual. They tend not to give money to the malnourished children of Gaza or the people imprisoned behind the tall walls of the West Bank.
And the money is always charity. Unlike state money, to which you’re entitled as a citizen, the donation can be a one-off event, or withdrawn at the whim of the donor when they move on to other, more interesting projects. That’s why taxation, which is democratically mandated, and infinitely larger in scale, is the answer. When I was made redundant early in my career, my female boss said to me: “Sign on for unemployment pay. It’s your right as a citizen.”
In the UK, the top 1% give only £10.23 a week to charity.
See: https://www.probonoeconomics.com/news/charity-donations-from-uks-richest-down-20-despite-higher-earnings
To put this in content, they’re earning £5,211 a week (£271,000 a year) on average. The typical charitable donation they declared on their tax returns was £538 a year, or £45 a month.
6. They’re fickle
When Ukraine was defending itself against Russia’s invasion of its country, it was reliant on Elon Musk’s StarLink satellites to identify where the enemy forces were. “Starlink was not meant to be involved in wars,” he said. “It was so people can watch Netflix and chill and get online for school and do good peaceful things, not drone strikes.” In short, the outcome of a major European war hinged on whether an entrepreneur decided to give Ukraine access to his personal possessions.
It means the rich can make decisions on a whim that affect large numbers of people. That could be closing a plant, making people redundant, or launching an unsafe product. We need systems to ensure that major decisions are taken with the involvement of all stakeholders, not one individual.
7. They’re selfish
A series of studies (https://www.pnas.org/doi/pdf/10.1073/pnas.1118373109) found that higher-class individuals behave more unethically than people from lower-class backgrounds. They discovered that the rich more frequently cut up other cars and pedestrians while driving, and were more likely to engage in behaviours like plagiarism or pirating software.
The team thought several factors could explain these differences, including their feelings of independence and entitlement, lack of concern for how others perceive them, and the money to deal with the consequences of their behaviour.
By contrast, several studies have shown that lower-class individuals behave more pro-socially, offering more help and donating more money to others in need. One review suggested this is ‘an adaptive strategy that helps lower-class individuals cope with threat and develop strong social networks’ (https://www.sciencedirect.com/science/article/abs/pii/S2352250X17300441?via%3Dihub). In other words, they’re aware of their own precarity, and the benefits of community.
Whatever the causes, it suggests that corporations and the rich aren’t nice people; they’re dangerous and deserve criticism, not our admiration.
8. People are taken in by their wealth and power
Power is an aphrodisiac, and people are credulous. Elon Musk (him again) has 160 million followers on X, formerly Twitter.
The media said what a towering genius Sam Bank-Friedman (SBF) was. He created FTX, one of the world’s largest cryptocurrency exchanges, with billions in deposits, and he was ranked the 41st-richest American by Forbes. Investors were led to believe he could bring them high returns with little risk (How often do we hear that?). But following his fraudulent activity, FTX went bust. More than a million people may have been affected by the collapse, with investors losing around $8.9 billion (https://www.npr.org/2022/11/18/1137492483/ftx-investors-worry-they-lost-everything-and-wonder-if-theres-anything-they-can-). SBF was found guilty of wire fraud, commodities fraud, securities fraud, and money laundering. History is rife with examples of heroes with feet of clay, and we forget so soon.
9. They exploit their workers
The wealthy are often accused of exploiting their workers, paying them low wages, and providing poor working conditions. This is especially true in industries where the wealthy own large corporations, such as the garment industry and the meatpacking industry. Marxists say that profit is the value of surplus labour. In other words, profits are what remains after wages and other costs, and should be shared among all stakeholders, not least the workforce.
10. They have political influence, and use it
The wealthy use their money to influence government policy in their favour. This can be done through lobbying, campaign donations, and other forms of political spending. As a result, the wealthy often have a disproportionate amount of influence over how the government is run.
11. They create inequality
The wealthy are getting richer as the rest of us get poorer. They are thus responsible for the resulting growth in inequality. The gap between the rich and the poor has been widening in recent decades, and this is largely due to the increasing concentration of wealth in the hands of a few.
This economic inequality can have a number of negative consequences for society, such as increased crime, social unrest, and a decline in social mobility.
So it’s imperative for all us to push back against the goals of the rich.
And members of the Concierge Class who support corporations and the wealthy must stand back from the services they provide, and decide the implications of their work
Towards the end of this book, I outline a structure for achieving that.
