What do the leaders of the UK, Iceland, China, and footballing body FIFA have in common? They all had a moment this week in which their palms became clammy, heart beating, and they asked their advisor “What did you say about Mossack Fonseca?”
Because what a week it has been. With the leak of the Panama Papers rich pants have been pulled down in all corners of the globe, revealing sets of embarrassing boxers from Reykjavik to Beijing. The papers, leaked by an unknown source to a German newspaper, list over 200,000 offshore companies, incriminating a staggering 143 politicians worldwide. Headlines are quick to proclaim the latest name to be dragged through the mud, and opposition politicians eager to cry corruption and call those involved “absolutely disgusting” (to quote Labour MP Jess Phillips).
But hey wait a minute- doesn’t this all sound a bit familiar? Except last time it was a Panamanian leak but a Luxembourgish one. In 2014, those pesky folk at the International Consortium of Investigative Journalists leaked the twisted tax secrets of 300 multinationals based in Luxembourg. Among those outed in the LuxLeaks scandal were Apple, Amazon, Starbucks, Walt Disney, Facebook, Microsoft, HSBC, Citigroup, Pepsi…the list goes on…and on.
So what’s different this time around? Well, the focus is more on the world leaders associated with offshore banking than any well known brands. This time it’s people, not just companies, being dragged through the mud. You can almost sense the tabloid journalists salivating. And yes, it does seem highly hypocritical (not to mention ironic) that David Cameron has ‘benefited’ from his father’s involvement in offshore wealth- all whilst battling to reduce a deficit exacerbated by missing corporate taxes. But I don’t blame him, nor any of the others. Why not? The left cry- this is greed, pure, dirty greed.
Well, I disagree. I would like to quote Eric Schmidt here, ex Google CEO, who said he was “very proud of the structure that we set up… it’s called capitalism”. And what is Capitalism? It’s a system that doesn’t discriminate between moral and immoral, race or gender. It only cares about money. A company’s only aim is to make money and grow. So what happens if the competition are using Tax Havens?
Take Apple for example. Between 2009 and 2012, a staggering $74 Billion was shuffled through an Irish tax scheme, allowing the company to pay just 2% tax on that sum. Now imagine you are a competitor of iTunes that doesn’t have an Offshore tax scheme. Suddenly your company is leaking money at the borders of every country you operate in while Apple is happily using a smokescreen to only pay tax in the Haven on all of it’s non-domestic trade. So do you adapt, or do you honorably cough up big chunks of your income while your competitor grows unhindered by such things?
It is testament to to this logic that so many high profile companies have been involved in these scandals. In a Capitalist world, it is adapt and grow, or be crushed. There is no time for ‘doing the right thing’ and customers (as 2014’s weak ‘Boycott Starbucks’ campaign shows) really do not care enough to be a factor. Last time I checked, Starbucks revenue was still over quadruple that of it’s nearest competitor (Tim Horton’s) worldwide.Don’t get me wrong- if I were a Politician, or in any role where I needed people to like me I would go nowhere near, and Cameron, Gunnlaugson, Infantino, Poroshenko and the rest of them were fools to do so. But money doesn’t care if you like it- it only cares about making more money.
So should Tax Havens be stopped? Definitely- but good luck. To do so would require laws to be passed in an international effort- one which banking lobbies in the US and UK will fight to avoid. The reason? A lot of that money that would’ve been paid in taxes the world over lands neatly in the pockets of the First World elite, including our own Prime Minister. It seems that fiddling taxes is the music piracy of the rich and powerful. Everyone does it, and nobody is quite sure whether it’s illegal or not. Whether it is moral, sensible or logical is a question our Prime Minister and other world leaders that caught called out this week will have to deeply consider. But money is like a river, it will flow through the easiest path. And neither moralists nor taxmen will stop it.
Dream.Think.Speak 
Tax Havens Matter
The response to the mysterious release of the so-called ‘Panama papers’ has been rather mixed. From the hard left we have suffered a tirade of futile indignation and an attempt to convince the general public that tax evasion matters at all. The public, for its part, has mostly responded with a shrug of the shoulders. After nearly seven years of financial scandal why should any of this surprise us anymore? Is this not exactly what we expect politicians to be doing?
The truth is that it does matter.
The reason this is significant is because it is one of few occasions where the mask of the elite slips and we see its true nature. It is important for people in the UK to see the permanence of the aristocracy that governs us.
This is particularly true of David Cameron and his ilk. No, we should not be surprised that his father flew off to the Caribbean to hold board meetings for a contrived corporation. The entire Cameron family descends from the imperial money-lending class, with a dose of illegitimate royalty, slave ownership and war-financing thrown it just to complete the caricature. Think ‘Blackadder’ and you’re not far off.
The elite in this country does what all elites do; converting position into wealth and using wealth to entrench its position. Cameron is part of the same pheasant-owning class that has run the country for close to a thousand years.
Is this important? Well yes, it is important if we regard democracy as something valuable. Does it not seem rather coincidental that after hundreds of years of struggle for democracy we find that our democratic rulers are from the same few titled families that led this country before it became a democracy? If these are the results of our system, it is not one we should trust to be representative.
The defence given by and for these people is that capitalism is the best option we have,and that the free market improves peoples lives. This is undoubtedly true, but a millennial elite is not a free market concept. Libertarians argue that without state enforcement it is impossible to entrench position, and this means a genuine competition between rival people and companies, with innovative products resulting. People like Cameron, Osborne and Johnson are the ultimate counter to this claim. They lead not because they’re the best, but because they look like their predecessors and have been anointed on that criterion.
Our response to this should be a deep distrust of people with trusts, titles, dubious family histories. Sidelining an elite is inherently a difficult task, but it seems to me that giving them a hard time when leaks like the ‘Panama papers’ occur is the very least we should do.
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