Welby Amazon social justice church investment
Market and Economics

Shared humanity, solidarity, and social justice are all well and good, but one must protect the CofE’s return on investment

It must be found in the Rite of Ordination somewhere.

Bishop: Dost thou, therefore, in the name of Social Justice, renounce the Market and all its works, the vain pomp and glory of fiscal solvency, with all covetous desires of the same, and the sinful desires of fiduciary responsibility, so that thou wilt not follow, nor be led by them?

Ordinand: I renounce them all; and, by God’s help, will endeavor not to follow, nor be led by them.

Bishop: Except, of course, for the Pension Fund.

Ordinand: So help me God.

Justin Welby – First Admiral of the People’s Fleet – thought it a good idea to attack yet another mortal sin of the Western World. (No, not abortion.) Donning red cap and cloak, he sallied forth in the People’s Trireme to puncture Amazon below its waterline. “Ramming speed!” cried the Admiral, and his red-clad crew pulled at the ores in response. There was the sound of impact, and of shattering wood, and of men thrown into the ocean. Great was the force of the collision. It should be noted that Amazon didn’t much notice. Amazon’s stock price did not plunge. The Amazon Board of Directors did not huddle in terrified conference trying to decide how to respond. The Good Ship Amazon proceeded on steady course. There were, however, reports that someone on the bridge did say “What was that?”, and the crew did wonder at the mysterious smudge of paint on the side of the hull.

So how did Archbishop Justin end up like this, floating in the water clinging to wreckage? He thought it fitting to address a collection of Socialists at something called the Trades Union Congress, and there he decided to attack the Class Enemy of all Socialists – Big Business. In this case, he fixed his sight picture upon Amazon. Quoth the fearless Archbishop:

Not paying taxes speaks of the absence of commitment to our shared humanity, to solidarity and justice. If you earn money from a community, you should pay your share of tax to that community. I was in business, and I know that, within limits, its right and proper for people to arrange their tax affairs, and for companies to do so. But when vast companies like Amazon, and other online traders, the new industries, can get away with paying almost nothing in tax, there is something wrong with the tax system. They don’t pay a real living wage, so the tax payer must support their workers with benefits. And having leached off the tax payer once they don’t pay for our defence, for security, for stability, for justice, for health, for equality, for education. Then they complain of an undertrained work force, from the education they have not paid for, and pay almost nothing for apprenticeships. Those are only a fraction of the costs of aggressive tax management.

Let’s examine this statement, shall we?

In the first place, paying taxes is a matter of law: it has nothing to do with Welby’s assertion about a “commitment to our shared humanity, to solidarity and justice”. The state seizes a portion of a man’s property for its own purposes and enforces its right to do so with the threat of violence. Economic entities do not pay taxes voluntarily: they pay under compulsion. The level of taxation is set by the law, and is therefore determined by the lawgiver. An entity’s “fair share” is set forth in the law. It is not a subjective assessment: it is a legal levy. Now, you may say that certain entities do not pay as much tax as you think they should, and that their “fair share” as determined by the law is less than you think it should be. That is a problem with the tax law, not a problem with the tax payer. The framing of this statement is therefore completely wrong. Amazon does not owe some “socially responsible” amount of tax. It owes what the law says it owes. This is by definition its “fair share”.

Welby then proceeds to impale his case on his own grappling hook. He states that “within limits, it’s right and proper for people to arrange their tax affairs, and for companies to do so”. This is a euphemistic way of saying that people and companies can use the law to minimise their tax liability under the law. He has to say this both to appear reasonable and because he is speaking to a room full of individuals who do exactly that. Every mother’s son among them would zero his tax liability if the opportunity presented, so Welby has to provide some means of differentiation. He does so by including the phrase “within limits”. But in doing so, he has made the argument one of degree and not kind. Amazon, by Welby’s own admission, has not done anything essentially unethical: it has simply used the tax law too well for its own advantage. This leaves open the obvious response of “How can you judge Amazon for following the law too well? Its ‘fair share’ is determined by the law and it has acted in accordance with the law. If you don’t like the outcome, change the law.”

Welby’s judgment regarding a minimum ethical tax liability (for that is what he is advocating) is not dispositive. If “vast companies like Amazon, and other online traders, the new industries, can get away with paying almost nothing in tax” then it is because the tax system has been adjusted to allow them to do so. The lawgiver perceives some advantage in creating this outcome. You can say that “there is something wrong with the tax system”, but you can’t say there is something wrong with Amazon for acting within its constraints. It is not obligated (morally or otherwise) to pay more than its assessment. Do you, dear Reader? Of course, you don’t.

He then goes on to describe his vision of the impact of Amazon’s alleged moral offence. He declares that Amazon doesn’t pay a living wage – which should be news to Seattle given that Seattle recently tried to enforce a head tax on Amazon employees. It seems that Amazon employees are so well paid they are bidding up the price of housing in downtown Seattle to such an extent that others are being priced out of the market. Seattle tried to impose a head tax in order to force Amazon to pay for the externals created by the presence of its highly-paid workforce. Amazon doesn’t pay every worker such a wage but it certainly doesn’t pay them all minimum wage either. In fact, cities are actively competing for Amazon to establish a local presence precisely because it brings in large numbers of highly paid workers. The economic impact of those citizens – both in terms of taxable income and increased property value – generates large amounts of tax revenue. Amazon may not pay taxes directly, but its indirect tax contribution is enormous. Lawgivers know this. Perhaps that is why they set the tax laws the way they do?

A little later in the speech, Welby crows about his part in the end of Wonga – perhaps a little too loudly. He said: “Five years ago, I said to the Chief Executive of Wonga that I wanted credit unions to compete him out of business. Well he’s gone!” Alas, but the Law of Unintended Consequence has made itself felt, and now people are worried that its loans might be sold off to high-interest lenders at bargain prices. There was some thought that the Church of England might use some of its £8.3 billion in investments to rescue the debtors from ‘loan sharks’. Since Welby was (by his own claim) instrumental in ending Wonga, perhaps the Church of England should take some responsibility for the aftermath. But the Church Commissioners were not amused. They have a fiduciary responsibility to manage the church’s investments wisely, and what is wise about purchasing a portfolio of high-risk loans? There were legal ramifications to consider. Shared humanity, solidarity, and social justice are all well and good, but one must protect the CofE’s return on investment.

Welby did not go before a Socialist crowd this time. He did not issue a stinging rebuke about an overly aggressive attitude towards protecting asset value against the need for human solidarity. He said:

My chief concern has been to ensure that the poor and vulnerable are as well protected as possible following the collapse of Wonga’s UK business. I fully support and respect the decision of the Church Commissioners not to participate in a potential buy out. They have given this option close attention and I thank them for their time, advice and consideration. I will be continuing to examine ways to make affordable credit, debt advice and support more widely available and convening interested parties at Lambeth Palace. If we make the economy fairer for all, we will also make it stronger. When prosperity and justice go hand in hand, every part of society benefits.

Just not with Church of England money. The one method he will not examine is using CofE funds to cover the debt. Perhaps he should hector Amazon about its social responsibility to fork over £400 million to atone for its “aggressive tax avoidance”. Because, Lord knows, the CofE won’t do it. There is a Pension Fund to protect.