Ireland – the Apple Republic part 2

apple-taxWhen a left wing TD called the decision of the Irish Government to appeal the decision that gives it €13+ billion “economic treason” against the Irish public he contributed nothing to clarifying for Irish workers the role of the state, which is precisely to defend big business against that part of the Irish public made up of workers, their families and small businesses, who mostly have little choice but to pay the state’s taxes.

Much better would be a socialist campaign to rally trade union branches, community groups, tenant associations, consumer groups and campaigns etc. to put together their own proposals as to how exactly the €13 billion should be spent.  The purpose would be to demonstrate that the needs of workers should come before those of multinationals and before the reputation and interests of the state and its ‘national interest’.  A campaign that sought to unite with the workers of other countries swindled out of tax receipts by Apple would go a long way to demonstrating that this is not about a race to the bottom that pits workers of one nationality against all others.

This would also allow working people to show, not least to themselves, that they can plan effectively how to spend the money, not just for their own benefit but in the interest of all working people. Its purpose would be to begin to instil a view within them that they should take control of society themselves rather than relying on the state to do the big things for them.

On this count the view expressed by another left wing TD was much closer to the mark.  Speaking in the Dáil Paul Murphy said: “Governments in capitalist societies are but committees of the rich to manage the affairs of the capitalist class. It is as simple as that …. All of the establishment parties represent the rich and the 1 per cent. We need to be rid of this committee of the rich, and we do not need it replaced with a reconfigured committee of the rich.”

The creation of a desire for, and mechanisms to achieve, an alternative to a “reconfigured committee of the rich” is precisely the objective of this proposal for working class activity.  Only by workers increasingly taking control over their lives now can we conceive an alternative that is real, compared to reliance on a state that always has your best interests as far away from its mind as possible.  The motto of socialists in this regard should be the famous quip of the British actor David Niven who, when speaking of Errol Flynn, once said “you always knew precisely where you stood with him because he always let you down.”[i]

A wider claim in relation to the Apple judgement and reaction to it is that such sharp practices are part and parcel of a policy of neoliberalism which is past its use by date.  The exhaustion of this policy has been expressed in the crisis of financialisation in 2008 and the failure of Eurozone austerity policies and similar policies in Britain, where their effects have not been quite so damning only to the extent that the Tories have failed to follow through fully on their austerity rhetoric.  In this view we will see a return to a class compromise that was supposedly the cornerstone of Keynesian policies practiced among the most developed countries after the Second World War.  Among these will be fair taxation of capital and the rich.

Against this it might be pointed out that the Apple ruling did not uphold any principle that taxes should be levied where real economic activity takes place and that in fact it was justified through an objection to state intervention, on the grounds of unfair state aid.

In 1997, even during the neoliberal era, EU Finance Ministers set up a Code of Conduct Group on business taxation that was charged with examining unfair tax practices and in succeeding years it abolished nearly 100 tax incentives across the EU.  Today it is the OECD which is supposed to be spearheading cooperation between governments on tax avoidance and evasion but this body has been a consistent supporter of neoliberalism.

In so far as there has been a trend in corporate taxation it has been a lowering of rates:

“Corporate tax is falling, both as a share of GDP and in the global tax take. . .  Within the last 20 years, corporate tax rates have fallen from around 45% to less than 30% on average in OECD countries. And lately, with increased mobility of multinational corporations, tax competition has intensified. Thus from 2000 to 2005, 24 out of the 30 OECD countries lowered their corporate tax rates while no member economy raised its rates.”

Closing or restricting some ‘loopholes’ is perfectly consistent with lowering rates because the loopholes become less and less relevant.  Reliance on the state to produce ‘fair’ taxation is like relying on Errol Flynn.  The Apple case, precisely because of its scale, is instructive in this and other respects.

The Left has pointed out the sheer scale of the windfall that the Irish Government is potentially spurning, pointing out its hypocrisy in demanding that the Irish people must do what the EU wants when it comes to austerity, bailing out the banks, ensuring no bond-holder is left behind and their demand that water charges simply must be paid.  When it comes to standing up for the Irish people no demand from the EU is too big but when it comes to standing up for the wealthiest multinationals no claim is too disreputable, no sacrifice too large and no neck so shiny and hard.

Commentators have pointed out that €13 billion would make up the budget for the health service for a year or it could take a significant chunk off the national debt of €200 billion.  It could pay the equivalent of a few years of the unpopular Universal Social Charge or it could mean a cash donation to everyone in the state of around €2,800 each, so that a household of four would get over €11,000.  A tidy sum for everyone in the State, or a significant boost to public services.

What it isn’t, despite its unprecedented size, is fundamental or transformative.  While it is a godsend of an example of taxing the rich, which much of the Left repeatedly presents as the answer to austerity and an exemplar of socialism, the Apple example shows that it is not.  Or not if one thinks of socialism as a fundamental change to society and a transformative change in working people’s lives.

What it is, is confirmation of the point made by Karl Marx many years ago, about the limits of distributing existing income or wealth, as opposed to changing the fundamentals of the ownership of productive resources that creates and recreates, again and again, this income and wealth.

“Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself.

The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one.

Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?”

This is the argument that goes to the root of the nonsense peddled by Michael Noonan that taxing Apple would mean “eating the seed potatoes” or Micheál Martin that “This model supports hundreds of thousands of jobs and pays for teachers, nurses and pensions in every part of our country.  What’s more, it has done so for decades.`’

Such is the significance of any battle over Apple’s taxes.  Reliance on multinational capital and all the crap that goes with it or a cooperative economy owned and controlled by workers not just in Ireland but everywhere.

[i] Of course the parallel isn’t exact – Niven and Flynn were “pals” while the working class and the capitalist state are enemies.  It is appropriate however that the above remark was made of an immature personal relationship that has no correspondence to the political stance workers must take against the state; even if failure to take such a stance reflects an undeveloped and therefore immature failure by some Irish socialists.

Back to part 1

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