Boots – the rampant capitalist paradigm

Let me put this as plainly as possible. Defining yourself politically in the 21st century is indicative of a narrow outlook.

Did I miss something out of that sentence? Did I mean to say, for instance, that defining yourself as politically right wing is indicative etc etc? Or perhaps I missed out the words “left wing”?

No, I didn’t. I mean exactly what I say. Defining yourself politically in 2012 is a sign of arrested development. We have enough experience – almost 100 years – of socialism to understand that if you need to kill 100 million people to establish a social utopia, and you don’t even succeed, then it’s time for a rethink.

Equally, we’ve had increasingly rampant capitalism for the past 30 years and while few people were murdered in the making of this ideology (which isn’t even an ideology) its wildest adherents have made life economically uncomfortable for millions of people in the past five years.

Starbucks paying very little tax in the UK is a perfect storm to illustrate my point.

Starbucks is one of the companies that the anti-globalisation lobby likes to hold up as a paradigm of what’s wrong with capitalism. Not paying much tax in the UK just adds fuel to that fire.

But now, let’s substitute the name Starbucks with the name Boots (The Chemist). Is Boots a symbol of capitalist oppression? It most assuredly is not. And yet Alliance Boots has an annual turnover of £20.5bn (almost double that of Starbucks worldwide) and a trading profit of almost £1bn. Last time I looked, they had paid only £14m to HMRC. They achieved this miracle by redefining their operation and relocating to a post office box address in Switzerland. They had previously, happily, paid £30m or so in tax, but when the bill threatened to rise over £100m they balked and walked.

Starbucks, by comparison, is not a UK company. It started off as an American operation, and then went international. It can choose to base its operations anywhere it wants to keep its tax bill down. When we criticise that, we forget that Starbucks employs 150,000 people worldwide, who pay income tax in their own countries. Equally it pumps money into local economies through product purchases.

And all this is to ignore the fact that until Starbucks came along, a decent cup of coffee was a rarity. Not to mention the fact that coffee producers around the world suddenly had a major buyer who has transformed subsistence growers into proper businesses.

The point here is that when you criticise Starbucks, or Google, or Amazon, you are really being political. There is no economic basis to the criticism. And why pick on Starbucks when there are targets closer to home and closer to our hearts? Boots The Chemist for God’s sake! They’re as British as roast beef – except they’re not; they’re now part of the pan-European giant Alliance UniChem, and have been since 2006.

Am I saying let’s attack Boots instead of Starbucks? No, I am not. There is absolutely no economic basis to criticism of either. Attacking their tax regimes is motivated purely by politics, and the politics of envy is absolutely no substitute for rational thinking about how best to run a democratic, free market society, with good public services that do not overburden the tax payer.

In 2015, those are the things that matter. Class warfare, left- or right-wing ideology and political name-calling are a waste of time and effort. The argument has been won and lost. Socialism doesn’t work; capitalism needs some serious rein-control.

But free people in a free society need to feel they have some power over their destiny. That can only be achieved when we stop imprisoning ourselves in dead ideological squabbles where the Left are loonies, and the Right are scum. That’s not an economic debate. That’s playground politics, which is all that politics has become. It’s time to grow up and leave all that childish stuff behind.

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