The Biggest Players Have Left the Room

The bank that used to be on our high street was a building. It had a manager. The manager lived two streets away. If you had a problem, you went in and talked to him, and sometimes he said yes and sometimes he said no, but he said it to your face, and he paid his taxes in the same town you did.

The biggest companies in the world used to be like that. Tied to places. A factory was in a town. A bank had a country. The country could tax it. The country had power over it.

This is not how the biggest companies of our time work. I had this explained to me more than once before I understood it. They exist in clouds, in code, in money that can cross a border in the time it takes to blink. Where the customers are, where the profits are recorded, where the owners live, and whose laws apply, can all be different places. The country whose citizens a company serves may have no real hold on the company at all.

This means the country cannot tax the company properly. It cannot make rules the company has to follow. The country watches, a little helplessly, as the biggest winners of the economy pay very little into the systems that made their winning possible.

When the biggest winners visibly refuse to pay in, something happens to everyone else. People who used to pay their share, without thinking about it, begin to think about it. Why should I, if they won't? The willingness to pay in was never only about the law. It was about a sense that everyone was playing by the same rules.

When that sense goes, the willingness goes with it. The tax base weakens at every level, not only at the top. The state loses capacity. The capacity has to be replaced by more borrowing, or more pressure on the middle, or by letting the schools and the roads slowly fall behind.

And somewhere, meanwhile, the biggest companies sit in offices in countries that ask less of them, and count their profits, and remain the most important organisations in the lives of hundreds of millions of people they will never pay a penny for.