A World to Win: Google

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Wednesday, June 05, 2013

Growth addicts meet in Watford

George Osborne, the ConDem’s chancellor and Labour’s Ed Balls, who are locked in a fierce agreement about the need for more austerity to promote growth – work that one out for yourselves – are in not-so-exotic Watford this week.

They are rubbing shoulders with the rest of the 140-odd big shots, aka “global political and financial elite” of the US and European capitalist economies attending the highly secretive 61st annual Bilderberg meeting.

This year, however, it’s not quite so secret, as the organisers have decided to pre-empt the leaks by publishing lists of the participants from 21 European and North American countries and 12 key topics.

The assembly is heavily skewed in favour of the top men of banking and finance, but they’ve been joined by the key figures from the most visible global corporations including Jeff Bezos, Amazon’s CEO, Google’s Eric Schmidt, Jorma Ollila, chairman, Royal Dutch Shell, Craig Mundie of Microsoft and a small number of big hitters from other key industries.

Also on board are opinion leaders from politics and the media who’ll be advancing what they’ve learned of the developing needs of the powerful in the year to come. With resistance to austerity growing everywhere, the organisers have brought in the military.

In attendance are General David Petraeus, former head of the US Army, and Olivier de Bavinchove, Commander of Eurocorps, the little known 60,000 strong standing army of the European Union.

Top of the list of key topics is “Can the US and Europe grow faster and create jobs?” No surprise there. Perhaps it is just a touch odd, however, that the list doesn’t include even a passing reference to climate change.

Especially in the light of current extreme weather events spanning the globe.

Or is it?

As the participants assembled, heavy rain had deluged large parts of Central Europe – Germany, Poland, Hungary, the Czech Republic, Austria, and Switzerland. Some areas like Passau on the Danube have experienced their worst floods in 500 years.

Meanwhile, the US National Weather Centre announced that, at 2.6 miles, one of last Friday’s five tornadoes to hit Oklahoma was the widest ever recorded - with wind speeds reaching 295 mph. This followed the devastation of the Oklahoma City suburb of Moore on May 20 that killed 24 people. It was the first time in that two such powerful tornadoes struck have Oklahoma within such a short period of time.

Following last year’s unprecedented drought in the USA, 82% of New Mexico is experiencing “severe” or “exceptional” drought conditions, according to Dan Ware, of the state’s forestry agency, of historic proportions not seen since the 1950s. A wave of vast wildfires has been sweeping through California.

This intensification of extreme weather across the globe is the result of the Bilderbergers’ top priority – profit-driven, economic growth. The reckless exploitation of resources to produce commodities with limited life spans, an addictive dependence on fossil fuel and the industrialisation of food production have driven climate change to crisis point.

And they want more of it. They’ll try anything and everything within their power to pursue it. More public spending cuts in the dream of reviving the private sector? Don’t worry, Labour agrees with the Tories on that one.

Unrepayable debt? Never mind, generations to come will be made to pay. Record levels of unemployment reaching as high as two-thirds among young Greeks? Press on, it’s reducing the cost of labour. Demonstrations, riots, violence on the streets? Bring out the army. Governments overthrown? They just appoint their own.

Breaking the power of the Bilderbergers and their ruling class chums throughout the world is a priority if we’re going to get through this historic economic, political and ecological crisis in one piece.

Gerry Gold

Economics editor

Friday, May 17, 2013

Amazon and Google having a laugh at taxpayers' expense

Whatever angle you come at it from, the state at national level, as well as key global agencies, exist to make life easier for corporations like Amazon and Google when it comes to taxation.

States everywhere may be short of revenue as the worldwide recession continues to takes it toll. But instead of demanding more from the corporations, the very opposite is happening.

The ConDems are telling business they can pay less. In the March budget, they cut corporation tax for the third time since 2010. It’s now fallen to 24% and will be reduced to just 21% next year. The cut will cost the Treasury about £400 million in 2015-16.

Where’s this shortfall to come from? Chancellor George Osborne is demanding £11 billion more in spending cuts in 2015-16, a level which has even frightened most of the cabinet into passive resistance. Front-line services like fire face draconian cuts and mass redundancies following today’s announcement by the government’s former chief fire and rescue officer.

Of course, global corporations do everything they can to avoid paying tax on their operations in Britain. Instead, companies like Amazon are registered in lower-tax territories like Luxembourg. They claim that although they employ thousands of workers in Britain, they are not actually based here!

MPs on the public accounts committee can rant and rage all they want – as they did yesterday when they had Google up before them – but the fact is that the UK tax authorities are pretty powerless to do anything about it. Moral pressure cuts no ice with the Googles of this world.

Take the example of Amazon. A Reuters investigation shows that over the past six years, Amazon has paid just £5.9 million in tax on over $23 billion of sales to British customers. Yet Amazon claims it runs a single European business out of Luxembourg.

Reuters says, however, has gathered evidence which shows that Amazon’s UK operations have a high degree of autonomy, and while the corporation likes to identity itself as a virtual company, this is far from the case. Microsoft and Expedia are other firms that claim a similar position in order to minimise tax bills.

The investigation explains: “The practice is based on international tax rules which allow companies to conduct ‘preparatory and auxiliary’ activities in a country without creating a taxable presence there. The UK tax authority, Her Majesty's Revenue and Customs (HMRC), has never sought to define in court the limits of what an internet company can do in Britain before it is deemed to have a taxable presence.”

However, does such a limit actually exist? Not according to Jacques Sasseville, head of the tax treaty unit at the Organisation for Economic Co-operation and Development (OECD), which advises rich nations on tax policy. He said where sales were conducted online, it was almost “impossible to prove a taxable presence in a jurisdiction, irrespective of how much activity is conducted in that country.”

So with the tax authorities pretty much powerless in the face of transnational, internet-based operations, Osborne is playing along. The cut in corporation tax to 21% puts the rate on a par with Luxembourg’s, although well above Ireland’s 12.5%.

Corporations exist solely to maximise profits, minimise costs (including tax) and increase the market value of traded shares. This is a legal obligation, enforced by the same capitalist state that is at their beck and call. Herein lies the problem.

The state and its agencies through essentially political actions sustain the economic system. They are a perfect example of the division of labour first noted by the economist Adam Smith as capitalism established itself in Britain. That’s why we should never look to the present state to sort out the corporations. That’s not the job of what is now a market state.

Paul Feldman

Communications editor

Monday, February 04, 2008

When corporations rule the world

Google’s owners are not the only ones troubled by Microsoft’s unsolicited bid for rival search engine Yahoo. No less than the right-leaning, pro-business Daily Telegraph believes that Microsoft’s move is yet further evidence that corporations have become more powerful than governments. The Telegraph has discovered what many have known for a long time – that corporate-driven globalisation is at odds with what are considered to be the norms of a parliamentary democratic state.

Microsoft is a case in point. The corporation has a virtual monopoly on the software used to run personal computers. And it wields tremendous influence in government circles, including in Britain. Microsoft is tied into the New Labour government’s educational policies and practice, for example, and chief executive Bill Gates is close to prime minister Brown, as he was to his predecessor. Bids by the US and the European Union to weaken Microsoft’s monopoly have come to nothing.

For the Telegraph, this is all too much. Its editorial (2 February) concluded that Microsoft’s decision to offer to buy Yahoo shares at 62% over their closing price was essentially aimed at Google. Yahoo has lost out to its search engine rival and the company’s revenues are in decline. The paper is concerned that If Microsoft and Yahoo combine successfully then the future of internet technology will be dominated by a battle between Microsoft-Yahoo and Google, adding sardonically: “So much for the diversity of the free market.”

The conservative newspaper has clearly had its faith in capitalism shaken by the current financial crisis, because the editorial goes on to say: “A Microsoft-Google duopoly, meanwhile, is more subtly political: it brings us close to a world in which corporations wield more power than governments. In both cases, massive issues of sovereignty and commercial freedom are being decided not in parliaments but in boardroom negotiations. The West's elected politicians have some serious catching up to do.”

This is where the Telegraph has missed the point, however. The “West’s politicians” are deeply embroiled in the whole process of corporate-driven globalisation. They have willingly bowed to the power of the corporations in order to attract foreign investment. Politicians have given vast powers to the World Trade Organisation and the EU to promote deregulation and open markets. New Labour has brought business figures like banker David Freud into government. Freud has just proposed that millions of people should be denied invalidity benefit and compelled to work. What a surprise.

The transition from the welfare state to the market state we now live under, actually began under the Tories in the early 1980s and has been completed by New Labour. The Telegraph may be alarmed now, but it was complicit during this lengthy process. The paper embraced the alleged benefits of the free market economy when it seemed to be in the ascendancy. Now it is concerned that growing inequalities and instability will lead the public to question the legitimacy of the capitalist system as a whole.

The Telegraph is right to be worried. The parliamentary state is clearly incompatible with corporate-led globalisation and that is why it becomes more authoritarian with each passing day. In just one week, the state under New Labour has announced the reintroduction of arbitrary stop and search powers for the police and effective detention without trial for terror suspects. Even its own MPs are not safe from police bugging operations. Taking on corporate power will mean building a new, democratic state that supports the transfer of shareholder ownership into common, co-ownership by workers and producers. Now that’s a project the Telegraph won’t be too keen about!

Paul Feldman
AWTW communications editor

Tuesday, June 12, 2007

Google bowls a googly

Google, the world’s most used internet search engine has been rated ‘hostile to privacy’ and placed bottom of the pile of Internet based service companies, whilst other big names like AOL, Apple and Yahoo! are identified as companies with policies and techniques that pose substantial threats to privacy.

The word “googling” officially entered the English language a year ago in June 2006 as billions around the planet got into the habit.

We enjoy it for the seamless way in which we can surf and trawl the oceans of the web. But the free lunch offered by internet companies comes with a price - the notorious “cookies”. These are files which are stored on our computers every time we use the web and note the details of our computer as we access a webpage.

A report published this week by Privacy International, the result of a six-month investigation, places Google, which handles 75% of all search referrals, at the bottom of its “race to the bottom”. It falls into the category of “comprehensive consumer surveillance and entrenched hostility to privacy”.

Google is seducing cash-strapped university authorities with offers of email services they can’t refuse. Google hopes that students will be locked into “a relationship for life”. Students at Trinity College Dublin are being provided access to Google Apps for Education, an email network which they can retain throughout their life. Arizona State University in the US and Linkoping in Sweden already have such networks, while in Africa universities in three countries are using the company’s education package.

The data acquired by search engines provides a comprehensive idea of internet users’ lifestyle, tracking and recording products searched for, news items, video clips, images and maps as well as recording when we actually use the search engine itself. Plus they have the personal details you have to supply when registering for their services.

Google’s dirty-tricks department has hit back accusing Privacy International of being biased towards Microsoft. But PI’s conclusions indicate the scale of abuse throughout the industry in the race for market share. It says: “The current frenzy to "capture" ad space revenue through the exploitation of new technologies and tools will result in one of the greatest privacy challenges in recent decades. The Internet appears to be shifting as a whole toward this aim”.

Another Google critic, Googlewatch, has pointed out that the information gathered by search engines can be put into the hands of government and the police and that the boundaries between commerce and government are dangerously blurred.

In Britain the government can demand encryption keys to any and all data communications, with a prison sentence of two years for those who do not comply with the order. And, since 9/11 and the Bush-Blair “war on terror”, the issue of consumer protection and government surveillance have become dangerously inter-twined.

Googlewatch points out that: “Google's relationships with government officials in all of the dozens of countries where they operate are a mystery, because Google never makes any statements about this. But here's a clue: Google uses the term ‘governmental request’ three times on their terms-of-use page and once on their privacy page. Google's language means that all Gmail account holders have consented to allow Google to show any and all email in their Gmail accounts to any official from any government whatsoever, even when the request is informal or extralegal, at Google's sole discretion.”

Internet companies’ willingness to sacrifice freedom of speech to their commercial interests and comply with government demands is ultra clear in China. “Google’s statements about respecting online privacy are the height of hypocrisy in view of its strategy in China”, said Reporters Without Borders which campaigns for journalists’ rights to press freedom. Organisations like Privacy International and others are campaigning for a responsible attitude to privacy by the corporate giants. But with an increasingly authoritarian state this is utopian. What is needed is a commonly-owned and co-operatively driven internet, owned and controlled by its users and free from commercial and state imperatives.

Corinna Lotz
AWTW secretary