Society

On Monday 5 September 2016 I noticed a link in the bottom right-hand corner of the home page of Apple’s UK site.

It wa entitled, ‘A Message to the Apple Community in Europe’, and it was in response to a fine levied by The European Commission at the instance of the EU competition commissioner, Margrethe Vestager.

This is the text of Tim Cook’s message, which I copied at the time because who knows how long it would remain available.

Tim Cook’s Message

August 30, 2016 A Message to the Apple Community in Europe 
Thirty-six years ago, long before introducing iPhone, iPod or even the Mac, Steve Jobs established Apple’s first operations in Europe. At the time, the company knew that in order to serve customers in Europe, it would need a base there. So, in October 1980, Apple opened a factory in Cork, Ireland with 60 employees.

At the time, Cork was suffering from high unemployment and extremely low economic investment. But Apple’s leaders saw a community rich with talent, and one they believed could accommodate growth if the company was fortunate enough to succeed.

We have operated continuously in Cork ever since, even through periods of uncertainty about our own business, and today we employ nearly 6,000 people across Ireland. The vast majority are still in Cork — including some of the very first employees — now performing a wide variety of functions as part of Apple’s global footprint. Countless multinational companies followed Apple by investing in Cork, and today the local economy is stronger than ever.

Steve Jobs visits Apple’s new facility in Cork, October 1980. The success which has propelled Apple’s growth in Cork comes from innovative products that delight our customers. It has helped create and sustain more than 1.5 million jobs across Europe — jobs at Apple, jobs for hundreds of thousands of creative app developers who thrive on the App Store, and jobs with manufacturers and other suppliers. Countless small and medium-size companies depend on Apple, and we are proud to support them.

As responsible corporate citizens, we are also proud of our contributions to local economies across Europe, and to communities everywhere. As our business has grown over the years, we have become the largest taxpayer in Ireland, the largest taxpayer in the United States, and the largest taxpayer in the world.

Over the years, we received guidance from Irish tax authorities on how to comply correctly with Irish tax law — the same kind of guidance available to any company doing business there. In Ireland and in every country where we operate, Apple follows the law and we pay all the taxes we owe.

The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.

The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.

At its root, the Commission’s case is not about how much Apple pays in taxes. It is about which government collects the money.

Taxes for multinational companies are complex, yet a fundamental principle is recognized around the world: A company’s profits should be taxed in the country where the value is created. Apple, Ireland and the United States all agree on this principle.

In Apple’s case, nearly all of our research and development takes place in California, so the vast majority of our profits are taxed in the United States. European companies doing business in the U.S. are taxed according to the same principle. But the Commission is now calling to retroactively change those rules.

Beyond the obvious targeting of Apple, the most profound and harmful effect of this ruling will be on investment and job creation in Europe. Using the Commission’s theory, every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.

Apple has long supported international tax reform with the objectives of simplicity and clarity. We believe these changes should come about through the proper legislative process, in which proposals are discussed among the leaders and citizens of the affected countries. And as with any new laws, they should be applied going forward — not retroactively.

We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment. We firmly believe that the facts and the established legal principles upon which the EU was founded will ultimately prevail.

Breaking That Down

• The message is addressed to the Apple Community, and by making a public statement it is telling the EC it is not going to back down and it is confident it is right.
• Apple has been in Ireland for a long time – thirty-six years, in fact.
• Apple is an important player in Ireland, with 6,000 employees.
• Apple is an important player in Europe, in the USA, in the world.
• The principle is that countries are taxed where they create value. Apple’s R&D is in the USA and that is where the value is created and that is where the tax should be paid.
• The EC wants to retroactively remake the tax laws for Ireland and internationally.
• This will adversely affect many companies, not just Apple.
• If the EU wants to change its tax laws, it should do so by legislative change and this should be applied going forward and not retroactively.
• A warning that if the EC does change the tax laws even going forward, remember what is set out in the preceding points and realise that Europe will be the loser.

EU Court Decision Today

Now fast forward to today, 15 July 2020 when the European Union’s general court has ruled that Apple does not have to pay the thirteen billion euros fine because the Commission had failed to proved that Apple had benefited from an allegedly illegal arrangement with the Irish authorities.

So that is €13bn that Apple can take out of its provision and add back into its general pot.

I just read an article entitled Invisible Smiles, reproduced in the 4 April issue of the Week. It reports on a study carried out at Kyoto University. The article says the report was published in the journal Royal Society Open Science.

The study compared the ability of young people in their 20s and people in the 70s to recognise facial expressions. In particular, the participants were shown a smile, an annoyed face, and a neutral face. The study showed that older people were good at recognising annoyed expressions but not smiles.

Younger people were better at recognising smiles. Older people found it harder to classify an expression as a smile or a neutral face.

The conclusion was that older people need to be more protective, so they hone their skill in recognising threats.

Well yes, possibly.

The faces the subjects were shown were real faces. The following quote is from the Invisible Smiles review at Royal Society Open Science. The review is under the title Older adults detect happy facial expressions less rapidly. And it was published 25 March 2020 by Akie Saito , Wataru Sato and Sakiko Yoshikawa

“Photographs of real faces displaying normal expressions and anti-expressions of anger and happiness served as target stimuli; neutral facial expressions served as distractor stimuli.”

Here’s another interpretation of the results: Perhaps the older people were wiser and more adept at seeing behind the smile.

Compare This To Estimating The Passage Of Time

It would be different if for example the older group were unable to judge the passage of time. Let’s say the older group were unable to estimate five minutes as accurately as the younger group. Unless one wants to be truly solipsist, we can all agree that the measurement of time is independent of interpretation. We can all verify how much time has passed by looking at a watch. In the absence of a timepiece we are all either good or bad at knowing how much time has passed.

But any study that depends on the interpretation of a facial expression depends on something else. It depends on the universality of agreement as to what the expression signifies. So let’s say an older age group of people see the facial expressions differently. What does it mean? It may mean that they are more able to discriminate facial expressions.

Happy Birthday sung twice is the length of time for which one should wash one hands after possible contact with the corona virus, the Prime Minister Boris Johnson suggested today.

He said that people should wash their hands with soap and water. He didn’t explain why that is effective, but it dissolves the lipid membrane of the virus and destroys it.

This follows the advice from the Government health advisors that one should wash ones hands for twenty seconds.

I imagine the Prime Minister or someone in his office realised that without a watch handy, people would have a poor idea of how long twenty seconds is. In contrast, we know how long to sing Happy Birthday twice. We just sing it. But how fast do we sing it? Well, if we imagine we are singing it to someone, we know how fast that is.

The Talmud

In the Talmud a question is asked as to how long one should allow a witness under oath to change the narrative of their evidence.

Should one believe them if they say something and then fifteen minutes later contradict what they said?

Peace Be With You, Teacher And Rabbi

The Talmud considered the question and decided the length of time for testimony to be accepted as continuous without alteration. They decided it should be the time it takes a person to say Peace be with you, teacher and rabbi.

if a witness takes longer than this then we question the truth of the testimony. We don’t automatically reject it, but it gives us cause to wonder. That change of testimony becomes part of the evidence.

The beauty of this is something we all recognise. That is that there is a speed and a cadence to the way that a person would say Peace be with you, teacher and rabbi. We would not rush the sentence, or if we did then we would say that is not the correct speed. And if we were to slow down to a crawl we would say that is not correct either.

Therefore, anyone can estimate the time without needing a watch or a timer. And it is something that can span all ages. Therefore we can always know how long a witness can take to correct his testimony.

To confuse things a little, another version gives a slightly shorter version, which is Peace be with you rabbi. I guess the decision might hinge on what testimony is being given and by whom.

I forgot the source of the decision. So I asked at the place I used to study – and received this reply.

The source is the Babylonian Talmud, Tractate Makkos 6. The Talmud teaches that a witness can retract their testimony within tokh k’dei dibur (תוך כדי דיבור) or the space between what is said.

Happy Birthday Sung Twice

So, for washing one’s hands after possible contact with the corona virus, it’s Happy Birthday sung twice.

I wonder how the Prime Minister’s office came up with that particular piece of advice. And who specifically came up with it?

Was it Boris Johnson himself? He has a good educational background, so he may know about the Talmudic decision. Or it may be coincidence.

In conversation with friends recently I’ve been saying that the economic downturn could be the best thing that has happened for the chance to stop the destruction of the environment.

I want to take a moment to say that there is a tremendous danger in arguing that the reason to stop polluting the Earth is to prevent the kinds of catastrophe that global warming is likely to bring about. Of course that is a very potent reason.

But let us suppose that someone came up with a sky-scrubber that sat ten miles up in the atmosphere and pulled all the hydrocarbons and excess CO2 out of the system. Let us suppose it was up there, chugging away and cleaning up the mess. Would that be a reason to treat the Earth like a toilet and keep on pumping rubbish into it?

No it wouldn’t.

Treating The Earth With Respect

Treating the Earth with respect requires no more reason than a tree needs a reason to be there and to go on growing.

Having got that out of the way, I have been arguing that the economic downturn (a phrase I prefer to ‘going off a cliff’) presents the best opportunity we could hope for in order that responsible government would have the power to force big business to clean up its act.

And big business is more likely to be in a frame of mind to listen, quite apart from being weak and having to listen.

Psychologically, when you are running at 100 miles per hour, making money and the world is full of smiles, you are least likely to listen to that still small voice inside telling you that you are destroying everything around you.

But when things turn bad, you are more likely to listen.

Which brings me to the report by Reuters and the Wall Street Journal. President Obama is said to have required the automakers to build a ‘company of the future’ with clean and energy-efficient vehicles as a condition of giving financial aid.

The political administration would have had a much harder time bringing this about if everything business was doing well.

And this carries into every other field where government is strong. This decade could be just what is needed for the tipping point to tip the right way.