Amazon and economic impact: either/or

ABB - Brilon, WerkseroffnungThe Daily Telegraph reports:

Amazon’s UK operation generated £4.2bn of sales last year, but it used a subsidiary in Luxembourg to help it reduce its corporation tax bill in the country to just £2.4m in 2012. According to documents filed at Companies House, the company received £2.5m in government handouts over the same period.


The Seattle-based company would not say which investments the UK Government has helped with, but last year it opened a new distribution plant in Hemel Hempstead, creating 600 jobs, promising to open three more over the next two years.

The comments section for the article is much what you would expect: Why is the government giving money to Amazon!? But we know exactly the argument Amazon’s representatives would use: think of the economic impact! 600 jobs! And the indirect impacts and so on and so on …

The false promise of economic impact studies (see this earlier post) puts all sectors – nonprofit arts, commercial book retailers, casinos, football stadiums, telephone call centers – on the same footing. They can all make the same claims of job creation and spin-off effects. Either we reject this method of analysis, or we recognize that many, many firms will approach government with the same claims.

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  1. says

    Respectfully, so what if “many, many firms will approach government with the same claims” of job creation and economic impact? So what if every living organism announces what economic benefit they bring to the universe? Whereas you see in it something bad, mendacious or even destructive, I would argue that this is precisely one of the kinds of information we want. Note my use of the words: “one of the kinds.” It should never be only metric by which we value, for example, the arts. But surely it should be one of them. To reject it, as you suggest in your final graph, is to knowingly amputate a good argument for the arts’ existence.

    Last time I checked, we live in an era in which threatening proportions of the population fervently believe that all things government-related are suspect, injurious, horrid, ridiculous. I say let’s have as much sunshine as possible regarding what tax breaks and incentives our government (or the UK government) gives corporations and then let’s do something directly addressing your assertion about the “false promise of economic impact studies”: let’s make the recipients of such civic largesse prove they really did create those jobs, really did drive that fiscal activity, really did generate that kind of difference to our society. If they did, why shouldn’t we know? If they didn’t — if the numbers are lies — why shouldn’t we know that, too?

    Your post implies the opposite — that we should “reject” economic impact studies, assume they’re inherently flawed, propagandistic, products of wild, vivid imaginations or simply full of lies. I don’t believe all are flawed or made of spin or conjured from whole cloth or made of Pinocchio-worthy whoppers. To “reject this method of analysis,” as you call it, is really to play the ostrich when what we need is better reporting and better facts.

    Economic impact is real. It is quantifiable. It is not, and it shouldn’t be, the only method of analysis available to us, in or out of the arts. But to “reject” a method entirely — to characterize economic impact studies as the 21st century equivalent of Piltdown Man — makes no sense to me at all.


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