“The Internet is an elite organisation. Most of the population of the world has never even made a phone call.”
Who indeed would have foreseen the commercial and social disruption brought about by the internet over the past 20 years, impacting communities across the world and challenging both national law-makers and international agreements?
In another context both a former national security adviser and a former prime minister warned - independently of each other - of the breakdown in the rules-based international order. Sir Mark Lyall Grant was referring to international security, and Gordon Brown to dealing with financial crises in a leaderless world. They were both looking forwards: but you don’t need to look forwards to see the commercial and social disruption which has already resulted from internet exploitation.
Amazon is the cheerleader of that current disruption, and over the past week it’s thrown John Lewis (& Partners) into confusion, and set the Archbishop of Canterbury on the warpath.
Donald Trump’s plan for making America great again - if it is a plan - is becoming clearer by the day: it’s massive disruption at all levels. It’s increasingly being recognised as such: not only are world leaders gradually coming to terms with it, but also officials in the White House itself are searching out checks and balances to make sure it doesn’t go too far.
However in the business world American tech giants regard disruption as a virtue, and Amazon is at their head with its $1 trillion market capitalisation. Exploiting the absence of international coordination to the full, they minimise their tax payments, exploit their local workers (to the extent that they use them at all), and create quasi-monopolies to drive out local competition.
Sir Charlie Mayfield, Chairman of John Lewis (& Partners), doesn’t know which way to look. Last Monday he was quoted in the Telegraph business section saying that he “struggled with the belief that internet companies should be penalised because they have managed to carve out a leaner business model”, thus opposing the revenue-based tax which Philip Hammond is currently considering. Then on Thursday he announced a 99% slump in John Lewis profits, and blamed it on Brexit uncertainty!
Perhaps he hadn’t noticed House of Fraser going to the wall - or Debenhams teetering on the edge of administration.
John Lewis is one of Britain’s finest companies. It provides service quality, excellent employee relations, and generally competitive pricing. But Amazon’s advantage is not just that ‘leaner business model’: it operates on a worldwide canvas, and takes advantage of all the inadequacies and breakdown of rules-based order that it can find. The John Lewis employee-based model simply doesn’t stand a chance in this environment.
So now the Archbishop of Canterbury is entering the fray, and his challenge is moral, not commercial. He may find friends at the TUC, but neither Amazon nor any of the other tech giants is likely to heed his call.
However, while they may ignore calls for morality, they do comply with legislation: indeed they were quick to respond that they complied with their tax obligations. So that’s where the focus should be concentrated. There are four key areas to address, on each of which the Archbishop would find a listening ear in the current Government when he is not courting the left:
- Tax: a tax on revenues is the only solution, when there is no international agreement to stop multi-nationals from shuffling their profits from country to country to minimise tax;
- Employment: decent working conditions are already required under UK law. They must be enforced properly;
- Unfair competition: the European Union has done well in requiring a level playing field. After Brexit we must keep up the pressure to ensure that the internet superstars don’t ride roughshod over smaller competitors;
- Democratic capitalism: means healthy public markets and widespread personal share ownership. Tech giants could do much to foster this, but their influence thus far has been to polarise and institutionalise wealth.
So the Archbishop is right to focus on the need for change, but it is Government which must deliver it.
Of course his comments were not limited to Amazon: he has also been extensively involved in the IPPR report on Economic Justice, on which we have commented in the past. One of its main proposals is the further extension of universal benefits, to include wealth distribution. As we have said, targeted asset-based welfare is far more effective in providing opportunity for the disadvantaged, particularly for young people, and seventy years of universal benefits, since Archbishop Temple ceded welfare to the state, has proved disastrous for the National Debt: and moving targeted welfare away from the Church has done no favours for the C of E.
The Church itself, however, has much more to do in the field of economic justice. The most challenging statistic, which was reported at a General Synod fringe event this July, is that it devotes £25 of resources per head of population in wealthy rural parishes in contrast with just £5 in urban estates. A wholesale re-balancing, of the scale last seen in the mid 19th century, is now necessary if the Church is genuinely to serve the poor.
So we have these two great British institutions in the media firing line over the past week: John Lewis and the Church of England, both struggling to find safe havens in the commercial and social hurricane which is disrupting everyday life today. They should both look for answers in that great Christian value to ‘love our neighbour as ourselves’. And who is our neighbour? Just read the parable of the Good Samaritan.
This kind of unconditional love - care for others - simply cannot be delivered online.
For John Lewis, care for others is at the heart of customer service, and for the Church, care for others through action in the community is the cutting edge of Christian witness.