The Cooking the Books Column from the March 2016 issue of the Socialist Standard
'I find it terrible that we allow companies to behave like this', an unnamed Tory minister told Times columnist, Rachel Sylvester (26 January) commenting on the Google tax row. 'It gives capitalism a bad name'. It's the 'unacceptable face of capitalism' all over again (as if capitalism had an acceptable one).
But those in charge of Google and other corporations operating in many different countries did nothing against either the economic logic or the legal code of capitalism. Capitalism's economic logic is to maximise the 'self-expansion of capital', i.e., to make as much profit as possible to invest as more capital, and it is the legal duty of those in charge of investing other people's money to ensure that the investors get the maximum return on their investment.
So why the complaints from supporters of capitalism? They come from two sources. From those who support capitalism generally and from other capitalist firms.
Capitalism in Britain exists in the context of political democracy, which means that political parties openly supporting capitalism have to be able to command a wide degree of popular support. The Tory Party, which in Britain is the party of Big Business and the rich, cannot just baldly proclaim that it exists to act in the interest of the few before everyone else's. They have to convince people that capitalism is in the general interest. This is why the Tory minister was worried about the behaviour of certain capitalist firms giving capitalism a bad name. As are pro-capitalist journalists such as Sylvester who headlined her article 'Tax-lite companies are a cancer in capitalism.' So, the argument is advanced that such behaviour is not routine for capitalism but 'irresponsible', 'unacceptable' and even 'unethical' (as if capitalism has anything to do with ethics).
The capitalist groups which complain about Google's behaviour are those who feel that, due to Google's tax dodging, they are having to bear a disproportionate share of the burden of taxation imposed to maintain the capitalist state machine. The less Google and the others pay, the more the rest have to. Basically, it's UK-established firms versus overseas-established ones. Another Tory minister, Business Secretary Sajid Javid, well expressed the first group’s complaint:
'I speak with thousands of companies – small, medium-sized as well as of course large companies – and there is a sense of injustice with what they see. They do look at this and they say: “Look, I don’t operate all these multiple jurisdictions around the world. I can’t shift profits around. What about me? Where’s the level playing field?” ' (Daily Telegraph, 31 January).
Tory backbencher David Davies spoke up for them too, or at least for the smaller firms among them, when he told Sylvester:
'It gives big companies an advantage over smaller ones – that's not capitalism, in fact it's anti-capitalism.'
It's not 'anti-capitalism’ of course. Big companies always have the advantage under modern capitalism. As Marx pointed out, there’s a built-in tendency under capitalism towards bigger firms as these are necessary to control the ever larger and more productive instruments of production in which, in search of greater profits, new capital is accumulated.
It is true, though, that the burden of taxation can be distributed differently among the different sections of the capitalist class. This in fact is what the argument here is really about – how much each section of the capitalist class should pay towards the upkeep of their state. It's a purely intra-capitalist dispute of no concern to the majority class of wage and salary workers which we don’t need to be drawn into by taking sides.