Australian consumers are collateral damage in Amazon's stoush over GST
“While we regret any inconvenience this may cause customers, we have had to assess the workability of the legislation as a global business with multiple international sites.”
That was global retailer Amazon recently on its decision to avoid GST by geobarring Australians from its main site, a neat illustration of the degeneration of what we once called globalisation.
For a brief period after the fall of the Berlin Wall, the ideologues of big business raised “globalisation” as a kind of battle cry.
Back then, the term possessed distinctly utopian connotations.
The collapse of eastern Europe prefigured, we were told, the downfall of tyrannies everywhere, as the free market ushered us all into a new and borderless order. Communism had failed; capitalism would succeed in withering away the state, since modern multinationals required of governments only that they got out of the way.
Those were the days when the New York Times’ Thomas Friedman preached the so-called Golden Arches Theory of Conflict Prevention, a doctrine that held that no two countries boasting McDonald’s restaurants could or would fight a war. No longer anchored by nationality, corporations would float serenely hither and yon, spreading tolerance, Pepsi Cola and the music of U2.
In his Declaration of the Independence of Cyberspace, John Perry Barlow dismissed the state as an embarrassing anachronism, irrelevant to the digital capitalists who dealt only in ones and zeros.
“Governments of the Industrial World,” he thundered, “you weary giants of flesh and steel, I come from Cyberspace, the new home of Mind. On behalf of the future, I ask you of the past to leave us alone. You are not welcome among us. You have no sovereignty where we gather.”
Of course, when the jetliners crashed into the twin towers, they brought such fantasies tumbling down. After 2001, the state came roaring back, as the weary giants threw their flesh and steel into the war on terror.
Yet the corporate world proved not at all discomforted by talk of international harmony and a borderless planet morphing into post 9/11 rhetoric of generational conflict and national security.
The Bush regime was, after all, both pro-corporate and pro-state, a combination that multinationals rather liked.
Strangely enough, the corporations weren’t actually hostile to government. Indeed, they thought strong governance was just fine, so long that strength delivered a probusiness environment.
Amazon shows how that works in practice.
In 2017, the company announced it required “a stable and businessfriendly environment” for its new headquarters – and duly invited cities to bid for the opportunity.
At first glance, the resulting contest – a kind of Hunger Games for down-at-heel municipalities – highlighted the unbridled power of a mega corporation to bend governments to its will. New Jersey offered a stonking $7 billion in tax incentives; Stonecrest, Georgia invited the company to build its own city from scratch, Dallas promised a special Amazon station on its bullet train, while Tucson gifted Amazon CEO Jeff Bezos an enormous 21-foot saguaro cactus (he turned it down).
Yet the strange bidding war also revealed how even Amazon – the quintessential internet success story – depended on state support.
That was, after all, the whole point of the contest. The company couldn’t establish its headquarters anywhere because it relied on a certain kind of environment, not least a taxpayer-funded education system producing ready supply of techsavvy employees.
Barlow might have thought the businesses of the future didn’t need the governments of the past but Jeff Bezos understood that, in the final analysis, cyberspace still rested upon flesh and steel.
Hence the stoush over GST in Australia.
Amazon says that collecting tax would be too onerous. But that’s a furphy – no one really believes that Amazon’s famous algorithms couldn’t perform the necessary calculations. The real issue pertains to politics, not technology. As Neil Chenoweth argues, the company is sending a warning to “the European Commission and US states that it will resist attempts to impose new turnover taxes and it is prepared to punish governments who pursue them”.
In that sense, Australian consumers, forced to pay higher rates on their online purchases, are merely collateral damage. Amazon’s prepared to take on the Australian government because it needs the state in its bigger markets to deliver the low tax rates to which it’s been accustomed.
Then again, that’s what corporate globalisation has always meant – a division between a tiny number of winners and a huge pool of losers.
It’s worth looking back to the rhetoric of the 1990s, if only to note how the promises made then were fulfilled for some and not for others. For the super-rich, the world did, indeed, become effectively borderless, while immigration controls were tightened for everyone else. The state didn’t disappear but rather grew more militarised, even as multinationals became more adept at bending it to their will. The McDonald’s restaurants in Moscow didn’t stop Putin annexing Ukraine, where the golden arches could also be found. In place of internationalism and the United Colours of Benetton, we got border force and the rise of the alt right.
Amazon provides the perfect illustration of how the system works for big business. It’s high time we started asking what it would mean to globalise the interests of ordinary people.
• Jeff Sparrow is a Guardian Australia columnist