Multinationals: The Role of Consumers and a New European Fiscal Trend

Abstract

This chapter consists of three sections. The first discusses the role played by elasticity of demand in enabling multinationals to make profits. Consumers long for goods charged with meaning for their social prestige and self-esteem; thus the elasticity of their demand support the oligopolistic profit.

The second section focuses on how multinationals produce with a view to profit alone lowering production costs, paying very badly their workers and, in the case of the multinationals producing meat, exploiting animals. In so doing they pollute the environment, grab land and clear forest to grow larger and larger.

Another way to lower production costs is to avoid and/or elude taxation and this is the subject of the third section of this chapter. The proposal formulated during the Ecofin in Tallinn in September 2017 to levy a so-called web tax on multinational producing digital products is seen as a very important step against their power of damaging consumers, industrial relations, ecosystems, and their subtracting resources to finance public expenditures, social policies of the countries where they act.

The web tax could also be seen as a good step towards a possible common European fiscal policy.