To view ‘Forbes’ ranking as good news is to confuse the market with society

Opinion: A global economic system based on maximising profit is obviously flawed

Apple has taken aggressive tax avoidance to new heights by becoming virtually stateless. Photograph: Reuters

Apple has taken aggressive tax avoidance to new heights by becoming virtually stateless. Photograph: Reuters

Sun, Dec 8, 2013, 00:01

Taoiseach Enda Kenny must be pleased that his oft-repeated desire that Ireland would become the best small country in the world in which to do business, has been vindicated by Forbes magazine. But should the rest of us be so delighted?

Or is it more than sad that one of the reasons cited for our attractiveness as a destination for companies was our “stubbornly high” rates of unemployment, which give companies a large labour pool from which to pick?

In other words, one of the factors that make us attractive to international business makes life miserable for many Irish citizens. “The best place in the world to do business” must also sound particularly hollow to our citizens forced to emigrate, or our families with children with special needs.

Could Forbes’s comments also be translated as saying, to borrow George Lee’s words at the Magill Summer School, that “Ireland is great at facilitating multinationals’ desire to maximise and retain profits”?

Apple, for example, has taken aggressive tax avoidance to new heights by becoming virtually stateless. When Apple chief executive Timothy Cook appeared before before the US Senate Permanent Subcommittee on Investigations this year, he was completely unapologetic about Apple having paid almost no taxes on about $74 billion earned outside the United States. Apple had done so through a complex but perfectly legal set of subsidiary companies, in which Ireland featured as a central player.

Tax haven
It is, of course, damaging to Ireland to be perceived as some kind of tax haven, so Michael Noonan is bringing forward legislation to force “stateless” companies incorporated in Ireland to declare a tax residency in another jurisdiction or become liable for Ireland’s 12.5 per cent corporate tax rate in 2015.

As a small, open and incredibly vulnerable economy, it could be argued that we are far from being in a position where we can afford to be sniffy about the 160,000 jobs, and the €19 billion spent in our economy by multinationals.

But these are pittances in comparison to the levels of profit being made by these companies. And a global economic system based on maximising profit for shareholders is fundamentally flawed and blind to the impact on the planet.

For a brief moment after the global economic crash, it looked as if the world might sober up enough to really look at alternatives to our current economic system. But the moment passed, and we are continuing to ignore the dangers of climate change and resource depletion, and even rejoicing at the rise in house prices, as if we have learned nothing about boom and bust.

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