On the Power of a Few Business Entities…

Posted: September 6, 2016 by Nazim in Business Entities, Environmental Law, Taxation

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This post was triggered by a few recent articles noting the power of large companies. But first, out of fear that some may dismiss these words as some commie fringe commentary, I should clarify immediately that I’m talking about a small handful of truly enormous business entities. And I use the generic term (business entity) because although some may be corporations, there are a legion of types of such entities. Repeating this for emphasis: I’m not talking about the extraordinary majority of businesses entities, which are small and absolutely healthy endeavors. On to the meat of the post.

I assume that most have heard of the row between Apple, Ireland, the European Union and the United States tax agencies, which I will not go into here. But it was contemporaneous to this bit of news from Austria, where entities such as Starbucks and Amazon pay less in taxes than businesses that are, by comparison, microscopic. These news are hardly surprising, given that most of these policies are written by or for those very companies. This goes even farther than pro-business legislation: some companies, such as Samsung, have grown so big that they are practically sovereign countries. To the point that the bulk of carbon emissions can be traced down to fewer than 100 companies worldwide. The point I’m making here is illustrated by this quote from that last link:

I, as a consumer bear some responsibility for my own car, etcetera. But we’re living an illusion if we think we’re making choices, because the infrastructure pretty much makes those choices for us.

As another example, in the face of catastrophic climate predictions under the best information we have, the pinnacle of worldwide environmental regulatory response (because it’s a planetary issue at this point), is a demand that countries to state their goals, explain whether they meet them and why not. With basically no enforcement power. And that was really the most feasible deal we could achieve, given the point I’m making here.

These matters would not be quite so troubling if open-market economic systems did not have an irrefutable tendency to concentrate wealth in the hands of few, basically turning into monopolies. Worse, under the current business scheme, it’s very difficult to trace the root decision makers of problems, so liability shielding has achieved unprecedented levels. Worse, the ongoing increase in our automation abilities (which I favor) is eroding the income and purchasing power of a large fraction of the consumer population, which is the main motor that keeps economies going.

I try to keep my alarmism to a minimum, but it might be time to consider panicking.

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