The costs of filling that basket… December 1, 2013Posted by WorldbyStorm in Culture, Economy, The Left.
…here’s a piece in the Observer on Amazon that is well worth reading in relation to its work practices and just how its operations function and what the implications of same are. The description of work practices, lack of recognition of unions, tax affairs and so on is not news, but it puts it together in a neat encapsulation that should cause pause for thought.
Some key sentences:
“We are the most customer-centric company on earth,” we’re told in our induction briefing, shortly before it’s explained that if we’re late we’ll get half a point, and after three of them we’re out. What constitutes late, I ask. “A minute,” I’m told.
It’s taxes, of course, that pay for the roads on which Amazon’s delivery trucks drive, and the schools in which its employees are educated, and the hospitals in which their babies are born and their arteries are patched up, and in which, one day, they may be nursed in their dying days. Taxes that all its workers pay, and that, it emerged in 2012, it tends not to pay. On UK sales of £4.2bn in 2012, it paid £3.2m in corporation tax. In 2006, it transferred its UK business to Luxembourg and reclassified its UK operation as simply “order fulfilment” business. The Luxembourg office employs 380 people. The UK operation employs 21,000. You do the math.
Brad Stone tells me that tax avoidance is built into the company’s DNA. From the very beginning it has been “constitutionally oriented to securing every possible advantage for its customers, setting the lowest possible prices, taking advantage of every known tax loophole or creating new ones”.
Just as Amazon has eroded 200 years’ worth of workers’ rights through its use of agencies and rendered a large swath of its workers powerless, so it has pulled off the same trick with corporate responsibility. MPs like to slag off Amazon and Starbucks and Google for not paying their taxes but they’ve yet to actually create the legislation that would compel them to do so.
That last is crucial. Nick Cohen’s old quote about the power of the state remaining paramount even in this period and yet being underused (I paraphrase) is one I’ve repeated time and again – and here’s another couple of thoughts from him from over the Summer on this very topic. Amazon acts in certain ways because it is permitted to do so. This doesn’t exculpate it. There are businesses that operate in markedly different ways, even while putting profit at the centre of their activities. But – and yes, neo-liberalism, is the proper term, whether in its social democratic or conservative incarnations has permitted this state of affairs to develop. As Amazon will no doubt correctly point out, it works within the constraints of labour and all other laws, while running rings around them.
It’s amazing how pervasive Amazon can be. Let’s not forget the Kindle. And it’s also important to reflect upon how in cities and towns books stores and DVD and music stores have retreated. I was at Tesco in Clare Hall for the first time ever this weekend and there was a small franchise selling a few books and that was it. Tesco itself sells a very limited range. Likewise with music and so on. It’s a strange dynamic where in some respects the market retreats, or transforms, from the physical space and yet manifests itself in larger comprehensive but deeply problematic ways, as the article outlines. And this is – ironically – a significant problem for other much smaller businesses. The article notes how one supplier even though they refused to use Amazon had the giant use their name. They’re suing. It will be interesting to see how that works out.
One last thought. Look at the description of work practices, of taxation approaches and so on. One analysis in the article suggest that that is unsustainable, but I wonder. I have the sense that actually relatively minimal changes could be introduced that would still allow the company to make significant profits, one need only list some of the areas where its approach seems perverse… low quality safety shoes etc. It would be more difficult but it wouldn’t be impossible. The question is why it doesn’t. The answer to that gets to the heart of all that is wrong with the model.
I’ve found that establishing contact individually online with book or DVD sellers is often easier and offers close enough or better prices and at least there’s the sense that one is minimising exploitative aspects. Any recommended workarounds other people use?