When I first started writing about the subject of Basic Income in 2013 the topic was very niche. Since then the Basic Income movement has picked up some significant momentum.
In this article I'm going to provide a few useful resources and then detail some of the most important recent Basic Income developments.
Resources
Basic Income is the idea that absolute poverty can be alleviated by providing every member of a society with an unconditional subsistence income. Beside the reduction in absolute poverty one of the main benefits of such a system is that anyone who chooses to work is always better off because their work related income is not subtracted from their welfare payments creating extraordinarily high rates of marginal taxation for the low paid as is currently the current welfare policy in the UK.
My first article on Basic Income was this introduction to the subject. I have also written this one about the labour market consequences of Basic Income provision, and this one comparing Basic Income with the current UK social security system.
If you want to keep up with the latest Basic Income news then it's worth following Basic Income Europe (Facebook/Twitter) and checking out the Basic Income Earth Network website.
Recent global developments
Finland
You may have heard talk that Finland is going to introduce a Basic Income payment of 800€ for all citizens, but this story has been severely over-exaggerated by elements of the UK press. What is actually happening is the establishment of Basic Income trials in Finland as a result of the Finnish government's adoption of evidence based policy (something else I've been advocating for many years). Essentially the Finnish government is planning to conduct a large scale Basic Income cost-benefit analysis. You can read more about the developments in Finland here.
Netherlands
Another major development is the announcement of a kind of Basic Income trial in the Dutch city of Utrecht. What is being done there is not a full-scale Basic Income trial because the payments will only be made to the unemployed, however it will be useful in determining if unemployed people are more likely to go out and find work if they get to keep everything they earn rather than having the majority of their earnings subtracted from their benefits as is the case under . Here's a recent article on the Utrecht experiment.
Spain
The Political party Podemos was only founded in March 2014, yet after the Spanish General Election in December 2015 it is now the third biggest party in the Spanish parliament, provides the mayors of Madrid and Barcelona and has a social media following twice as big as all of the other parties in Spain combined! Podemos support the concept of Basic Income, and if their exponential rise in popularity and influence continues, it seems only a matter of time before they enter government, meaning Basic Income would well and truly be on the agenda in Spanish politics.
Switzerland
The long awaited Swiss referendum on the introduction of a Basic Income payment for all Swiss citizens is due in the autumn of 2016. The Swiss political establishment are clearly terrified by the concept (voting 146 to 14 against the idea). Right-wing politicians queued up to spew furious fearmongering rhetoric against Basic Income, describing it as "the most dangerous and harmful initiative ever", "a bomb at the heart of our society and our economy" and a "hand grenade that threatens to tear the whole system apart". Despite the Swiss political establishment's campaign of fearmongering against the idea of eliminating absolute poverty through the introduction of a Basic Income scheme, opinion polls show that public opinion is still quite evenly divided on the subject.
Canada
The Liberal Party won an astonishing election victory, recovering from their worst performance ever in 2011 to win an absolute majority on an anti-austerity platform in 2015. One of the many progressive pre-election policy resolutions is the implementation of a Basic Income scheme for all Canadians. In December 2015 Kingston, Ontario became the first municipality to endorse Basic Income and call on the federal government to develop the measure at the national level. It's unlikely that such a bold progressive proposal would be implemented at the national level without a huge amount of pressure on the Liberal Party leadership, however the fact that Basic Income is on the agenda at all in Canada is definitely a noteworthy development.
Developments in the UK
Considering developments in other countries, the subject of Basic Income is still somewhat in the shadows in the UK. The Green Party are still the only significant UK party to put Basic Income as one of their headline policy proposals. There are Basic Income advocates within the SNP and the Liberal Democrats, but Basic Income was not mentioned in either of their 2015 manifestos. The Labour Party don't advocate Basic Income either, but the new leader Jeremy Corbyn has appointed the Basic Income advocate Richard Murphy as one of his economic advisers.
While the subject of Basic Income seems to have gained little traction within the UK political establishment, it is gaining more recognition elsewhere. Even though several of the recent articles about Basic Income trials in the UK press have been somewhat inaccurate in their claims, it's still notable that the subject is being written about in most of the mainstream newspapers.
It's also worth noting that the RSA have started advocating for Basic Income, as have the innovation charity Nesta.
Conclusion
Basic Income looks set to become one of the big political topics of 2016. If the trials in Finland and the Netherlands are as successful as previous Basic Income trials in demonstrating reductions in poverty, increased entrepreneurship, increased worker productivity, reduced domestic violence etc ... then advocates of Basic Income will have even more hard evidence to argue their case. The Swiss Basic Income referendum towards the end of 2016 is likely to attract a significant amount of press coverage, especially if the Swiss political establishment continue trying to polarise the debate with their policy of transparently alarmist fearmongering.
Whether the Swiss referendum on Basic Income is successful or not, public awareness of the concept is set to increase dramatically over the coming year. In my view it's only a matter of time before Basic Income schemes become commonplace. When people look back they'll recognise 2015-16 as the period when the Basic Income movement really began to gain traction.
Another Angry Voice is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.
One of the things that delights me about having an ever growing audience of politically engaged people is that I can help people get more involved in politics. Some people like to contest that the only way to make a difference is to get out on the streets and protest, but this is wrong headed. Street protests are obviously an important component to dissent but many (especially the elderly, the disabled and those with children to care for) find street protests difficult and/or intimidating, especially given the concerted efforts by the establishment to undermine the right to peaceful political protest and to militarise the police.
I often ask people (if they feel strongly about an issue I've highlighted) to get involved by doing things such as writing to their MP, writing to businesses to explain the reasons for boycotting their products, contributing to public consultations and signing petitions. In my view these activities are just as important as street protests and pickets.
I recently posted the Avaaz Internet Apocalypse petition on the Another Angry Voice Facebook page for anyone who is opposed to the plans to introduce a "two-speed" Internet, where corporations will be able buy special favours from Internet Service Providers at the expense of the wider Internet (non-profit organisations, campaign groups and independent blogs like my own). One of the regular cynics that trolls my page then popped up with an appalling appeal to apathy, saying that petitions are "pointless wastes of time that give people a false belief they are making a difference" and challenged me to "list me 5 petitions of the last 10 years that have made a difference".
I'll do better than that, I'll list 10 petitions of the last 5 years that have made a difference. To be honest, even this challenge (which is 4x as difficult as the one I was actually set) is a bit easy to someone that does like to sign and share petitions.
1. Hugh's Fish Fight: I used to have a bit of a chip on my shoulder about Hugh Fearnley-Whittingstall and his posh-boy cookery show, but he has earned an enormous amount of respect from me after leading the campaign for the abandonment of the extraordinarily wasteful practice of EU fish discards (throwing millions of tons of dead but perfectly edible fish back into the sea). Over 870,000 people signed the Hugh's Fish Fight petition and in December 2013 the EU finally legislated to reform their fisheries policy and abandon the ludicrously wasteful discards policy.
2. Universal Basic Income: A 2013 petition in Switzerland has triggered a referendum on the introduction of Universal Basic Income. The referendum has yet to be held, but the fact that the public in Switzerland will have a say on the issue is entirely down to the people that signed the petition in the first place.
3. Barbarity in the Maldives: One of the most emotive petitions in recent years was one concerning a 15 year old rape victim who had been sentenced to public flogging for the "crime" of sex outside marriage. After more than 2 million people signed the 2013 Avaaz petition, the conviction was overturned.
4. Bank charges: In 2012 A Change.org petition with over 300,000 signatures led to Bank of America abandoning plans to introduce a $5 monthly banking fee within a month of announcing it.
5. The Food Poverty Debate: In 2013 A petition on the UK government epetition website resulted in a parliamentary debate on food poverty. Unfortunately the Tories stonewalled the debate, but they earned themselves an awful lot of bad publicity as they laughed and shouted their way through the debate. The absurdly evasive and misleading speech made by Esther McVey was derided as the "one of the nastiest frontbench speeches I’ve heard in more than 43 years" by parliamentary veteran Gerald Kaufman. Although the petition didn't result in changing the Tory policy of forcing the most vulnerable people in society into destitution (which, after all, is one of their core political strategies), it certainly opened a lot more people's eyes to their sheer callousness.
6. ACTA: An American led drive to censor the Internet was abandoned due to an extremely strong public reaction against it. The EU cited a 2012 Avaaz petition with well over 2 million signatures as a key factor in their decision to abandon their participation in ACTA.
7. The Olympic Tax Dodge: One of the most stunningly successful petitions in recent years was the 38 Degrees campaign against a tax-dodging deal arranged by the IOC for sponsors of the 2012 London Olympics. Within just a few weeks every single Olympic sponsor pulled out of the tax dodge under a tide of negative publicity.
8. Save the Forests: 38 Degrees led the campaign to stop the Tories selling
off nationally owned woodland. Over half a million people signed
the 2010 petition and the Tories were forced to cancel the sell-off.
9. Neoncotinoid pesticides: A 2013 Avaaz petition with 2.6 million signatures drove the EU decision to impose a temporary ban on neoncotinoid pesticides which have been linked to colony collapse disorder in bees.
10. Ryan Ferguson: Ryan was freed after a 2012 change.org petition with 250,000 signatures helped to secure him a retrial in which his absurdly dubious murder conviction was overturned.
These ten are some of the most high profile petitions of the last five years and they are obviously not the only ones (feel free to mention other "petitions that have made a difference" in the comments section).
Of course petitions are not the only way of protesting against injustice (direct action, street protests, spreading awareness, boycotts, strikes, pickets and attempts to engage with the political system are some of many other avenues) but I hope I've made it clear that it is possible to make a difference by signing a petition.
The fact that I've so easily surpassed his request for evidence is a clear demonstration that people like my "petitions are a pointless waste of time"
troll are either hopelessly ignorant about the subject they are
pontificating about, or they are cynically lying through their teeth in some pathetic attempt to dissuade other people from even trying to make a difference.
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Universal Basic Income (sometimes called Unconditional Basic Income, Citizens Income or just Basic Income) is a proposed economic system in which all adults within the economy receive a guaranteed basic income irrespective of whether they have a job or not. It is a very interesting proposal which finds support from across the political spectrum, especially amongst socialists and libertarians.
Arguments in favour
Technology and automation: As technology and automation improve, the requirement for labour in the economy falls. However, the pace of technological advancement is retarded if the public cannot afford the outputs of advanced technology and automation. If the public have their basic human needs met, then they have more wealth to invest in consumption of the outputs, further driving technological advancement.
Wealth Redistribution: Wealth redistribution is economically beneficial because of the Marginal Propensity to Consume (poor & ordinary people spend more of their income than the wealthy). The more wealth that is spent, rather than hoarded, the faster the economy will develop.
Efficiency: Universal Basic Income is the most efficient form of wealth redistribution because there is no need for a massive and expensive bureaucracy to means-test recipients. The only checks would be whether the recipient is a citizen of the state, and whether they are classified as an adult, which would massively reduce the bureaucratic cost overheads of the welfare system.
Smaller government: The introduction of Universal Basic Income would reduce the economic burden of the welfare system through the elimination of almost all means tested benefits and associated bureaucracies.
Reduced crime: Crime rates will be reduced because the Universal Basic Income would effectively eliminate absolute poverty, and massively reduce the economic desperation that motivates a large proportion of criminal behavior such as theft (a Basic Income trial project in Namibia recorded a remarkable 42% reduction in crime).
Balanced Labour Market: The labour market has become ever more imbalanced ever since the rise of neoclassical pseudo-economic dogma, and the attacks on trade unions and labour rights. Workers would no longer be compelled to work in order to meet their basic human needs, so employers would have to offer high wages and good terms and conditions in order to attract workers. Exploitative employment practices would be curtailed and the worker would have greater freedom to pursue the employment that they choose, rather than doing awful jobs for crap wages in order to stave off absolute destitution.
Innovation and small businesses: If citizens are guaranteed a basic income to meet their basic human needs, the investment of time and wealth into the establishment of new businesses would be significantly more attractive and carry significantly less risk. The evidence from trials supports the conclusion that the introduction of such a system would increase the number of business start-ups.
Better capitalism: The resulting boom in small businesses would improve capitalism by increasing the diversity of the capitalist economy, and by increasing competition within existing markets. Increased diversity would lead to a more robust economy capable of withstanding extrogenous shocks, and more competitive markets would result in greater competition and efficiency.
Social justice: If the basic human needs of all citizens are met automatically, then the requirement on charity and state administered welfare is dramatically reduced, meaning that those with charitable intentions can assist the needy elsewhere in the world, rather than fighting to combat poverty in their own developed nations.
Arguments against
Loss of work incentive: Opponents argue that the incentive to work would be destroyed, and that capitalism would grind to a halt without the fear of destitution driving workers to continue working. This objection is not supported by the experimental data, which shows that the vast majority of people continue to work, even if their basic human needs are met. Trials in North America showed that the only demographics to significantly reduce their working hours were new mothers (to spend time with their babies) and teenagers/young adults (who spent additional time in education). The trial in Namibia actually showed a significant increase in economic activity, due to the increase in economic demand and the establishment of new businesses.
Idleness: One of the most commonly wielded criticisms is that if a guarantee that the individual's basic human needs are met is given, then the individual will be inclined towards idleness. Not only is this concern disproved by the trials that have been carried out, it is also disproved by an appeal to "common sense". If having sufficient wealth that our basic human needs are met causes idleness, how is it possible to explain the fact that multi-billionaires like Warren Buffet or George Soros carry on working, when they have accumulated enough wealth to provide their basic human needs for ten thousand lifetimes or more? Why do actors like Keanu Reeves carry on working, when they have made more than enough money to live in comfort for the rest of their lives? Why do sportsmen carry on working even after they have become multi-millionaires? How is it possible to explain the fact that the current UK government is absolutely stuffed full of multi-millionaires? If having "enough to survive" was a disincentive to work, then all of these people would surely have retired to a life of idle luxury. The only way that this objection makes any kind of sense is if you accept the ludicrous right-wing stance that the rich are best motivated by more money, and the poor are best motivated by the threat of absolute destitution.
Something for nothing: Another one of the most common objections is the "why should people get something for nothing" argument. This kind of attitude lies behind the irrational British obsession with welfare spending. It is estimated that the UK economy loses £120 billion a year to tax-dodging, however this issue is completely dwarfed (in terms of column inches and public opinion) when it comes to the cost of welfare, of which only £1.2 billion is claimed fraudulently. The British public are easily riled with the sense of injustice that they must work hard, whilst others have a roof over their head and food in their belly despite not having a job. The sense of injustice is a powerful emotion, and the right-wing press deliberately weave it into their anti-welfare narratives, but it in economic terms it is a meaningless objection to Universal Basic Income, because if everyone is entitled to an income that guarantees them a basic standard of living, whether they work or not, the objection that the unemployed are getting something that the employed don't no longer carries any weight at all.
Reciprosity: Another objection is that the guaranteed income is basically unconditional, and that means that there is no conditionality that the recipient must put anything back into the economy. This objection demonstrates a basic lack of economic literacy because the recipient will either spend it (creating economic demand) or save it (creating the capital reserves that the capitalist system requires in order to fund the credit economy). The only way that it would be possible for the individual to extract the wealth from the economy entirely would be through off-shoring it, but that is a problem of capital flight and tax-dodging, not a problem with the principle of unconditional income.
Welfare for the rich: Another objection is that the Universal Basic Income would result in payments to citizens that are already wealthy, and have no trouble meeting their basic human needs. In my view, this is a particularly short-sighted objection for two reasons. Firstly, because making the payment conditional on wealth and income would necessitate a large bureaucracy in order to means test everyone, which would undermine one of the main benefits (efficiency); and secondly, because if the wealthy and powerful (generally high-tax payers) are excluded, they are likely to oppose the scheme because they are paying for it, but getting nothing back. If guaranteeing the basic human needs of the majority in the most efficient way possible must come at the price of giving the already wealthy "a bit extra" too, then so be it. To hopelessly compromise the whole concept of a universal benefit out of a desire to make sure that the rich don't get a share of it would be to throw the baby out with the bathwater so to speak.
Inflation: Of all of the regularly stated objections, the only one that carries any significant economic weight is the threat of inflation. It should be fairly easy to understand how this might happen. Take rent for example: If the idle rentier class is aware that their tenants are in receipt of a monthly payment designed to meet their basic human needs, it is clearly in their financial self-interest to then massively increase the rental charge so that it takes the entire amount (and probably a bit more for good measure). An example of this kind of rent seeking behavior can be seen in the UK childcare sector after the introduction of Child Tax Credits. The childcare providers knew that working families were getting a payment from the government to cover the cost of childcare, so they raised the cost of childcare so much that the UK now has the most expensive childcare in the developed world (33% of family income, as compared to the OECD average of just 13%) meaning that the Child Tax Credit allowance is nowhere near enough to cover the inflated cost of childcare. If Universal Basic Income is introduced, then it must be done with a package of anti-inflationary measures (such as rent caps) or the value of the payment will soon be eroded away through the rent seeking behavior of the idle rentier class.
Another solution to the rent seeking behaviour of the idle rentier class could be to ensure that the UBI payment is linked to the cost of living, so that if the cost of rent, energy rates and water bills go up 10% in a year, the UBI payment would rise proportionately. This would of course result in inflation, but the inflation wouldn't end up driving ordinary people into poverty because they would be getting an inflation adjusted UBI payment to meet their basic needs.
Disclaimer
I've outlined some of the arguments for and against Universal Basic Income.
The problem is that most of the arguments in favour are backed by
empirical evidence and sound economic reasoning, but most of the commonly raised
arguments against don't make any sense at all from an economic perspective, are
contradicted by the evidence, and amount to little more than opinion. This means that it is absolutely impossible to construct a "balanced" article without giving the
completely false impression that the arguments against are somehow equal
to the arguments in favour, when aside from the valid concerns over
inflation, they are transparently not.
Politics
The concept of Universal Basic Income is compatible with several political ideologies, especially socialism and libertarianism. I would also argue that it is also compatible with most forms of free-market capitalism (apart from the extremely rabid variety that opposes any kind of welfare intervention whatever).
Socialism
Perhaps the most famous left-wing advocate of universal income was the British philosopher and social critic Bertrand Russell, who wrote in 1918 that "those who choose not to work
should receive a bare livelihood, and be left completely
free" and that under such a system "The dread of unemployment
and loss of livelihood would no longer haunt
men like a nightmare".*
Other left-wing advocates for the Universal Basic Income include James Meade, who argues that it represents the only way by which full employment can be regained, and the Belgian philosopher and economist Phillippe van Parijs, who founded the European Basic Income Network in 1987.
Libertarianism
Libertarianism can crudely be divided into two schools, and advocates of the Universal Basic Income can be found in both of them.
Left-libertarianism
One of the early left-libertarian advocates of Universal Basic Income was the American economist Henry George. He proposed a progressive tax system where tax would be levied upon land and under which every citizen would receive a basic income called a "citizens' dividend". The benefit of such a Land Value Tax system is that tax is levied upon wealth, and not upon consumption or income.
In recent years the Green Party of the United States has proposed a universal income for all adults regardless of health, employment, or marital status,
in order to minimize government bureaucracy and intrusiveness into
people's lives.
Right-libertarianism
Many Conservatives might be inclined to oppose Universal Basic Income because they have been conditioned to hate the welfare state, but many of the ideologues of the neoclassical ideology that the Conservative thinker implicitly supports are advocates of forms of Universal Basic Income. These advocates include Friedrich Hayek, Milton Friedman and Gary Johnson (the Libertarian party candidate in the 2012 & 2016 US Presidential election).
Right-libertarians often propose a form of conditional Basic Income called Negative Income Tax, where people earning below a certain income threshold receive supplemental payment from the government instead of paying taxes to it.
Free Market Capitalism
One might assume that the concept of universal welfare is completely at odds with free-market capitalism,
but it isn't. Universal Basic Income would increase the competitivity of the market by freeing people from concerns over their basic human needs, and giving them the liberty to start their own businesses. A rise in the number of small businesses would increase market competition and promote greater efficiency.
If the free-market capitalist believes in any form of welfare at all, then the logical form to support would be the form that involves the least government interference and the smallest amount of costly bureaucracy, which would quite clearly take the form of some kind of universal income, rather than a bureaucratically administered means-tested benefit.
Conclusion
Universal Basic Income is a very interesting idea. There are numerous research projects being conducted all over the world, meaning we will learn more about the benefits and pitfalls.
It is clear that the underlying principle of a universal bureaucracy-free welfare system has a great deal of appeal to people from either side of the political spectrum, given that it has supporters from either extreme (from Bertrand Russell to Fredrich Hayek) and many in between.
Many of the critics rely on economically illiterate objections such as the "something for nothing" complaint or faux concerns about "idleness".
By raising such ludicrous concerns that the poor and ordinary would cease work at the very instant their basic human needs are met (whilst ignoring the fact that the rich continue to work despite their basic human needs being met many times over), the opponent is essentially admitting that their view of capitalism relies upon exploitation of the fear of destitution, rather than the willing participation of the workers.
Another thing that this kind of "something for nothing" objection reveals is the absurd idea that the only way in which it is possible to contribute to society is through paid labour. The idea that the individual is incapable of contributing anything at all to society apart from through submission to capitalist exploitation. This stance is ludicrous nonsense, not only because the individual would contribute to the economy every time they spent or saved their Universal Basic Income, but also because non-remunerated activities such as bringing up children, caring for elderly or disabled relatives, volunteering for charities or investing time in unpaid endeavours such as education, writing or the arts are all clearly contributions to society, it's just that they are much less easily monetised by the "cost of everything, value of nothing" brigade, so they are dismissed as worthless "non-contributions".
Another Angry Voice is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.
The reason Starbucks should be boycotted is simple. Starbucks is an aggressive user of tax-dodging scams to avoid paying tax in the UK. The company has used the technique of siphoning all of their profits into subsidiary companies based in Switzerland and Luxembourg to ensure that they paid 0% corporation on sales of over £1 billion, over the last three years.
In 2012 they paid absolutely no corporation tax on sales of over £368 million and they have paid just £8.6 million in tax over the last 14 years, an effective rate of below 1%.
It is absolutely no wonder that they have managed to drive hundreds of small, independent, tax-paying family owned cafes out of business. They have had the massive, unfair advantage of not paying any UK tax on their profits.
The research into Starbucks tax-dodging activities was conducted by Reuters, you can read their full damning report here.
Starbucks are tax-dodgers, the schemes they have used to avoid paying their fair share of tax are legally allowable, but only because successive Tory and Labour governments alike have created and maintained gaping loopholes in the UK tax code. Any part of an anti-tax-dodging campaign should involve applying
pressure on politicians to close the gaping tax-loopholes that companies
use to apply a veneer of legal legitimacy to their immoral and
anti-competitive practices.
Whatever the legal status of a particular tax-dodging scam, it is immoral to avoid paying tax in a country in which your company generates enormous revenues. Tax-dodging is immoral because it is a clear demonstration that a company is happy to benefit from the taxes other people pay in order to generate their profits, but they refuse to pay taxes themselves. To give a few examples.
Starbucks employees benefited from their education, from access to free healthcare, etc. Without these provisions, Starbucks would have to select their employees from amongst the diseased and illiterate. By avoiding tax, Starbucks are essentially saying that they are
happy for others to keep their workers healthy and reasonably educated, but they won't contribute themselves.
The majority of Starbucks customers benefited from taxpayer funded infrastructure to even get there, roads built and maintained at taxpayer expense, the taxpayer subsidised rail network or London underground. By avoiding tax, Starbucks are essentially saying that they are happy for others to fund the infrastructure that contributes to their profit margins, but they won't contribute themselves.
Whenever a crime is committed in a Starbucks, the staff will call a taxpayer funded police force to deal with it. By avoiding tax, Starbucks are essentially saying that they are
happy for others to fund the police that protect their property and their employees, but they won't contribute themselves.
Starbucks employees and customers pay tax. By avoiding tax, Starbucks
are essentially saying that they are
happy for their staff and their customers to pay tax on their part of transactions that occur as part of the Starbucks business, but they won't contribute themselves.
Starbucks should thank UK taxpayers for fact that their employees (often but not always) have basic literacy and numeracy and have been vaccinated against horrific diseases like polio and TB, they should thank the taxpayer that their customers are even able to get to their local Starbucks outlet, they should thank the taxpayer that their stores are protected by the police and fire services and they should thank their own staff and customers for making tax contributions. The best way for Starbucks to recognise the contribution of the taxpayer, is by paying their fair share of tax.
The second key argument against tax dodging a free-market argument. A free and fair market is dependent upon there being a level playing field so that competition can take effect. If one agent utilises anti-competitive practices, the playing field is not fair and the market becomes un-free.
If a state allows loopholes that can be utilised only by large multi-national corporations with a team of specialist tax lawyers and accountants and the ability to set up foreign based shell-companies, they are allowing corporate outlets a vast competitive advantage over small independent businesses. Small businesses that have no choice but to pay the standard rates of taxation. Once a state allows aggressive tax-dodgers this kind of cost advantage, it isn't long before the independents are eradicated from the market by the tax-dodgers. This is bad for the consumer, because they are left with less choice, it is bad for the government because they are left with fewer tax revenues from the sector and it is bad for the sector itself because the agents that have established monopoly or oligopoly positions have lower incentives to increase efficiency because their competition has been eradicated.
I believe I have established both the moral and the economic case to protest against tax-dodgers, but the most important measure of a protest isn't actually whether it is valid, but whether it can be effective.
It has been clearly shown that social media campaigns and boycotts can work, just consider the remarkable effectiveness of the Olympic tax dodge protest.
Since the Reuters investigation was published, their brand reputation has been significantly harmed. YouGov’s BrandIndex (which records brand identity strengths) has shown that Starbucks reputation has fallen from +4.6 to -3.99 in just a week and that their "buzz score", based on how many positive and negative comments customers have heard, has plunged from +0.7 down to a four year low of -13.9.
Sarah Murphy of BrandIndex said: “To say this story has been a
disaster for the Starbucks brand would be a bit of an understatement.
It’s still too early to say what the long-term impact of this is going
to be, but in the current climate we’ve seen the public take a fairly
dim view towards accusations of corporate greed".
This is why we must speak out against Starbucks tax-dodging activities and promote a Starbucks boycott. The only way these vast corporate enterprises will be made to listen, is by ensuring that their brand gets the maximum negative publicity, and that they are made to suffer financially. If 100,000s of their customers begin boycotting their stores, then perhaps they will be incentivised to pay their fair share of tax.
