Amancio Ortega or how anti-capitalist bias clouds the judgement of left-wing populists

Amancio Ortega or how anti-capitalist bias clouds the judgement of left-wing populists

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Amancio Ortega doesn’t make the headlines very often. Zara’s magnate, a self-made man who rose from being clerk in a clothing store to founding the largest fashion retailer in the world, has always avoided being in the spotlight, which has worked for him thus far. Yet when one is the sixth richest person on earth, it is inevitable to end up in the news once in a while.

Ortega was recently involved in controversy on account of his philanthropic activities after a spokesperson from Podemos, Spain’s left-wing populist party, said on Twitter that the Spanish public health care system shouldn’t accept donations from Inditex’s founder. And she wasn't the only one. Pablo Iglesias, Podemos’ leader and former advisor to the late Venezuelan president Hugo Chavez, declared that “any democracy worthy of the name does not accept alms from multimillionaires to fund its health care system; it makes them pay their fair share of taxes.”

The controversy dates back to 2017 when Ortega’s foundation committed to donating around €310 million to the Spanish public health care system for the period 2017-2021. Particularly, the funds were earmarked for renewing the cancer diagnosis and treatment equipment of hospitals all over the country. At the time, the donation was criticized by the Federation of Associations in Defense of Public Health Care, arguing that public health care doesn't need to “draw upon, accept or thank the generosity, altruism or charity of any person or organization”.

What are the reasons that may lead someone to demand that the government reject a donation that can potentially save the lives of many cancer patients? Those who object to Ortega’s donation argue that the public health care system cannot depend on charity. Instead, it should be funded via a progressive tax system where multinationals and wealthy people pay their fair share. The problem with this argument is that it's pure demagoguery: Spain’s health care is already paid almost entirely by taxpayers’ money. Voluntary donations represent a minimal fraction of the budget.

However, this is not the whole story. Inditex has been accused of failing to fulfill its tax obligations in several occasions. For this reason, critics accuse Ortega of hypocrisy: whereas Inditex’s founder is giving money to improve Spain’s health care services, his company is evading taxes that could be used to maintain and expand the pillars of the welfare state.

Unfortunately for those who have fiercely opposed Ortega’s donation, there is no evidence that Inditex has evaded taxes. Claims against the clothing multinational are based on 2016 report elaborated by an European Parliament group (The Greens/European Free Alliance) where Inditex is accused of tax avoidance over the period 2011-2014. Leaving aside that Inditex publicly showed its disagreement with the conclusions of the report, it should be noted that tax avoidance isn't the same as tax evasion.

Whereas the latter is blatantly illegal (though ethical, according to some), tax avoidance implies using all legal means available to minimize one’s tax liabilities. In fact, tax avoidance is not unique to big businesses and wealthy people: it is what most of us do when tax time arrives. For instance, any UK citizen that makes regular contributions to a pension plan commits tax avoidance as contributions help lower the tax bill; a behavior that no one would dare to describe as immoral.

But even if we assumed that Inditex perpetrated tax fraud, this wouldn’t be a good reason to turn down Ortega’s donation. After all, by rejecting it, the government wouldn’t be punishing him or his company, but the potential patients that would benefit from new cancer treatments. Publicly denouncing Ortega’s alleged hypocritical behavior isn't incompatible with accepting a donation that will certainly improve the living standards of thousands of people suffering from cancer.

Given the lack of solid arguments against Zara’s magnate for his contribution, one should wonder if the root of this criticism isn’t just an anti-capitalist bias dressed up as concern for the welfare state. This would explain why the same people that now despise Amancio Ortega for his philanthropic activities criticized Inditex in the past for exploiting its workers ignoring the fact that those countries that opened up to evil multinationals three decades ago have managed to raise their living standards dramatically.

In sum, the same old class hatred that caused so much damage in the past seems to be the source of today’s animosity against Amancio Ortega and his donations. What else could explain such an insensitive attitude?  

Luis Pablo de la Horra

Luis Pablo de la Horra
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