International Economics: IB Economics

Another tech story - with Just Eat shedding nearly 2,000 jobs, and again another market structure angle, with Deliveroo also having done the same. The sector is currently retrenching as levels of demand have fallen, perhaps in result to lower incomes, and a continued readjustment to the post-COVID environment.

Another bad day in the world of big tech, with Meta announcing another 10,000 layoffs, and 5,000 unfulfilled job adverts closed - is this a portent of the shape of things to come in macroeconomic terms, necessary restructuring, the result of increased use of AI, or an example of the impact of the product life cycle applied to social media.

Or all four? 

I have relatively little to say about this, other than: it's about time. 

The big tech firms have, it is true, brought an awful lot of benefits. However, they've been able to free ride on technological developments generated by the public sector, harvest data at zero cost, in a way that discriminates against consumers and avoid tax to a ridiculous degree. 

Instead of lionising Sergei Brin, Larry Page, Mark Zuckerberg et al shouldn't we be vilifying them for not paying their dues to society? 

And here's the BBC take on the challenges facing Joe Biden and the American economy: coronavirus, climate, taxes, tech and trade.

On the plus side, after last night's farcical Republican press conference, Four Seasons Landscaping in Philadelphia should have plenty of work in the weeks ahead.

Just remember "We're All in this Together" - unless, of course, your on of the Big Tech firms, with the possible exception of Apple - who've done astoundingly well from the past few months.

It seems the Facebook has admitted tax evasion, in agreeing to pay France nearly 106 million euros in back taxes. Yet again, the company is forthright in asserting that it takes it's obligation to pay its taxes and has agreed to increase its tax payments to France for 2020.

However, it seems that in doing this, it is also effectively admitted that its decision to pay taxes is arbitrary, and this seems to indicate that the tax system lacks 'certainty', one of Adam Smith's canons of taxation. 

Again, it rather implies that Facebook's approach to tax is one of minimal legal compliance, rather than an ethical commitment to meeting its tax obligations. 

The Head of the OECD has called for nations planning to introduce digital technolgy taxes - such as France and the UK - to hold fire. For now.

He wants there to be global agreement about the nature of such taxes - but given the vested interest of the United States, it's tough to see what form a solution would take. And even the vested interests argument is complex: tech companies themselves seem willing to pay an "appropriate amount" of tax; the President, however, may see things in another light.

Here we go again - no doubt the President will hit out at French attempts to introduce a digital tax on US tech giants - highlighting the fact that the bullies doesn't like people standing up to them.

And it raises wider issues of tax avoidance, and the impact it would have on the global economy. 

Mohammed El-Erian argues that the tech giants are driving a paradigm shift in policymaking, suggesting that such is their ability to persistently drive down prices that this present policymakers with new problems.

However, he also warns that this might not be a permanent effect - and that tight labour markets and declining levels of competition in certain markets might yet see inflation return.

It seems as though the tech giants haven't stopped shedding jobs - with Amazon announcing that another 9,000 jobs are going to go in the next few weeks, making it 27,000 job losses all told. Bear in mind though that they employ 1.5 million people worldwide.

That said, is this another indicator of a softening of global demand. 

Are G7 nations likely to reach agreement on tax avoidance, and the use of tax havens, particularly by the tech giants, in the run up to this summer's Cornish G7 summit? 

Certainly, this Guardian article suggests this possibility. 

It's not been a great end to the year for Big Tech companies, with the news that ten American states are accusing Google of illegally maintaining it's monopoly on online advertising. 

Has the tide turned? It seems that competition authorities around the world have become keener to challenge the tech giants. 

Unsurprisingly, there's a lot of coverage of the US economy - and that prospects for it under Joe Biden. Here's the Guardian's take - he's likely to reverse corporate tax cuts, look at stronger regulation of big tech, and increase support for the unemployed.

Tax avoidance, big tech, the developing world. 

No surprises that its technology companies gaming the system once again - and the ethics of it? Well, their denying developing economies tax revenues that could help fund healthcare and education. 

I just have to 'scoop' this to highlight astonishing US policymaking: PresidentTrump has indicated that he is going to ban TikTok in the US unless it sells the US arm of its business to Microsoft.

It's remarkable, given that last week the US government was arguing against big tech firms growing bigger. Further, the request for a 'cut' of the TikTok deal smacks, as one observer suggests, of 'gangsterism'. 

At least people can't say that they were surprised by the latter...

Proof that bullying sometimes works - in this instance, France is delaying the introduction of its digital sales tax on the big tech companies, to avoid US retaliation via the introduction of tariffs on French goods and services. 

The unilateral French action has aroused President Trump's ire: although longer-term, this issue will need to be addressed. It strikes me that the tech companies are adept at tax avoidance, and avoiding regulatory interventions, in a way which might reduce economic welfare. 

A question of tax avoidance or protectionism? The French would argue the former, the US the latter. 

I suspect that, as ever, the truth lies somewhere between the two.