UK Uncut: pious fascism is still fascism

Tomorrow we are promised the spectacle of widespread mob rule by UK Uncut, as they occupy branches of Starbucks at various locations. As libertarians are the first to deny the legitimacy of the state to act in numerous ways, if not its legitimacy in toto, and do not believe that the law, at least where that word means whatever legislation is on the books, should automatically be obeyed, some may not understand what objection a libertarian would have to such political action. Let me try to explain at least my objections.

For a libertarian, the Law could be summed up in one commandment: thou shalt not initiate force or fraud against another person or their property, nor threaten to do so. Therefore, where legislation violates this principle, it is not considered legitimate.  As Thomas Aquinas said: an unjust law is no law at all. So, it is not the case that, a priori, law-breaking, including civil disobedience, should be condemned. Morality may dictate to the individual conscience that a law must be broken, in full knowledge of the penalty that may be incurred, and there are many martyrs who libertarians are right to venerate as heroes for doing just this.

If all UK Uncut planned to do was boycott Starbucks, then no offence would be committed, either against the non-aggression principle or any law, even if based on the screwy political views of the group in question, and the boycott is a wholly legitimate act, one which could be used far wider than is presently the case, but they go further, and what they plan to do is clearly a breach of the non-aggression principle, as they say they are going to forcibly take over businesses, and deny those businesses their liberty to trade.  Every penny of lost trade is a tort against those businesses. It’s possible that those businesses, due to the threats against them, will shut up for the day to avoid the mob, or that UK Uncut are only hoaxing their plans, and will instead do something else. Even so, the threats have been made, and the damage will be done.

As for their justification, on the face of it, it’s ludicrous. They are blaming Starbucks for various cuts to welfare that the government have imposed (the mythical ‘austerity’, in which the government keeps spending way above what it shakes out of us in taxes), as if Starbucks paying over money it doesn’t legally owe to the government would change that. They see no distinction between evading tax, a crime (malum prohibitum, but certainly not malum in se), and minimising one’s tax, emphatically not a crime. It’s not enough as far as UK Uncut is concerned to obey the law, you must do more, you must pay whatever the cackling sans culottes demand or face their mob.

All the while the establishment media, at least the left-wing side of that (BBC etc) are lionising these latter-day blackshirts, along with Richard Murphy, the movement’s version of Oswald Moseley, without the tight-fitting tunic, thankfully. The response of the authorities will be interesting, as UK Uncut are driving forward an agenda in the interests of the bloated state, in peddling the absurdity that handing over more money to the unproductive, parasitical part of the economy, somehow we all benefit.

Fundamentally, UK Uncut are the foolish foot-soldiers of a very nasty ideology, which, secondo Murphy, proclaims that the state owns everything, and you should be grateful for whatever crumbs it leaves you, once it’s helped itself to your money and resources. As George Harrison sang in ‘Taxman’, with reference to the contemporary 95% income tax rate; “Should five percent appear too small, be thankful I don’t take it all”.

The ideology is laid out for the drones in Murphy’s opus ‘The Courageous State’, or as it was historically known, the totalitarian state. Murphy waits impatiently for the ‘courageous’ leader, who will embrace the task of providing milk and honey to the suffering masses, and won’t be constrained by those weak and unmanly principles of individual liberty, property or the law. We have seen such ‘courageous’ leaders before. Perhaps Murphy could emulate one particularly famous such leader, by going down in a bunker and chomping down on a cyanide capsule while blowing his brains out. If so, I will offer my services in carrying him outside and pouring on the gasoline.

Starbucks giving up

Unlike the plucky fighter pilot of the same name, Starbucks the corporate coffee giant has wilted and turned like Monty Python’s King Arthur.

According to Channel 4:

Given the week ahead, Starbucks may have been trying to pre-empt criticism by issuing a statement saying: “Starbucks has complied with all the tax laws in this country but has regretfully not been as profitable as we would have liked.”

“We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more,” Starbucks said. “As part of this we are looking at our tax approach in the UK.”

© Diego Duarte Cereceda

Starbucks could at least have had the courtesy to duke it out for one Saturday lunchtime against UK Uncut. I would have cheered if, in a statement of uncomfortable truths, Starbucks had announced that due to public misconceptions we have been forced to restructure our tax affairs in order to voluntarily pay additional UK Corporation tax and would therefore, as a direct result, be adding 10p to the price of a coffee in order to protect staff wage increases inline with inflation. Such would be the policy of Gibbo’s Coffee Emporium public relations department, had it existed. As it is, Starbucks’ new approach to public relations helps to conceal the fact that it’s actions were ultimately in everyone’s best interests. They might not have made the case that tax is better spent by them, which would be easily arguable to anyone familiar with Mises, but would at least have exposed the real cost of tax to the UK public and refocused the debate.

What I’ve learned from following this story is that the UK public discourse is narrow-minded and hubristic when it comes to taxation. You often hear people, colleagues, family, charities, talking about what they think should be done with tax money. There is a strangely arrogant tone to it which is married with a kind of modestly that causes them to believe that the people in power could also do an okay job too if it weren’t those pesky Tories/Tax evaders/establishment types/special interests. When you consider economics as a problem of knowledge, skills and decison making though, it’s obvious that the more spending power is decentralised the better will be our economic progress. None of that is reflected in the media discourse on this story. The media would have you believe that tax is an unqualified good, not the unjustifiable error that it is.

I had thought of heading over to Starbucks with members of the meetup to give those arrogant UK Uncut types a stern dressing down well composed leaflet about Austrian economics, and try to get some media traction. If I had gone ahead I would have been busily taping cardboard to placard poles on Sunday evening when I heard about Starbucks’ change of heart. The deafening silence and earnest lack of co-operation I got when I floated it on Facebook saved me a wasted weekend. Just as the UK media are years away from being able to properly discuss these ideas in a balanced way, the UK’s libertarian tendency is not ready to take to the barricades. I wonder if that because my colleagues have realised long before me how far the UK media are away from taking libertarian ideas seriously, or whether we must focus for a few more years on simply running up the flag and building up the strength of the community.

UPDATE: feedback from the pub is that it was a technology failure. I’m pleased, that’s considerably easier to fix.

Starbucks do not pay corporation tax

I don’t work for them, I don’t even like them. The coffee is as bland as the shop, but I use them anyway because it’s convenient and they have wifi. At least the staff are consistently friendly and try their best despite atrociously long queues. Starbucks is insanely popular. Whether we like to admit it or not, we all like to use Starbucks, but it seems some of us would like them to “contribute” a bit more tax, for the good of the country.

© Shinji WATANABE

The problem is that “Starbucks” is a legal and marketing fiction, an abstract concept, like “blue” or “liberty”. Blue walls don’t paint themselves. Liberty doesn’t fight for itself and “Starbucks” does not pay tax, and it never could. People paint walls blue. People must fight for liberty. People must pay taxes. The law says this legal fiction can have money of it’s own, and it has a bank account from which taxes are expected to flow. If “Starbucks” isn’t a person then who’s money was that really? Shareholders, yes, but also employees and customers.

Tax is paid for by earning revenue from sales to customers, as are the investors seeking a return for their outlay. To get the same return, if costs go up, investors will insist on higher prices or their money back. Why wouldn’t they? They will be trying to get by without their money for a long time and risk loosing it. Often that money is someone’s pension. It doesn’t matter if the new cost is a tax, the price of toilet cleaner, or the premium paid for the Fair Trade logo, it all comes from people buying stuff, in this case, coffee. Corporation tax is levied as a proportion of profit so reduces an investor’s return (their pension) directly. You buy the coffee that pays for it so corporation tax is pushing up the price you pay.

There is another group that ends up paying part of the corporation tax bill: the staff, from logistics, marketing, fat-cat management or shift-working barristas; all of them are paid from revenue just as the corporation tax is. The barristas are competing for sales money with all these other costs, including all the taxes, employers NI (our hidden 13.8% job tax), VAT, local authority rates and corporation tax. Even tax paid on behalf of employees (income tax and NI) pushes up the cost of salaries to the business and the costs of administration too. Once again, share holders who agreed to invest for a certain return fairly insist that any costs be trimmed out of wages. Corporation tax lands on shareholders, and on every member of staff too. That applies to every company.

Whether you work at Starbucks, or any other company, remember that abstract brand names don’t pay corporation tax. One way or another, you do.