How the rich have bought our democracy

I normally wouldn’t recommend articles from the useless Global Warming-obsessed, migrant-loving, Europhiliac Guardian. But today I’ve slightly adapted and shortened an article which I think beautifully sums up how the rich have bought British and American democracy while also avoiding making any contribution to paying for the societies in which they live:

At root, the ‘Panama papers’ are not about tax. They’re not even about money. What the Panama Papers really depict is the corruption of our democracy.

The Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Nicholas Shaxson, an expert of tax havens and author of the excellent book Treasure Islands describes them as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…

But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. In the US, the billionaire Koch Brothers and banks like Goldman Sachs and JP Morgan have huge influence on the results of presidential elections. For them someone like Donald Trump, who has his own fortune and is thus not in hock to the business and banking Establishment, is a threat that must be destroyed.

In Britain, the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative Party’s election funds, effectively bought the Tories their first taste of government in 18 years.

 A Berlin-born economist called Albert Hirschman, who died in 2012 at the age of 97, argued that citizens could protest against a system in one of two ways: voice or exit. Fed up with your local school? Then you can exercise your voice and take it up with the headteacher. Alternatively, you can exit and take your child to a private school.

In Britain and in America, the super-rich have broken Hirschman’s law – they are at one and the same time exercising economic exit and political voice. They can have their tax-free cake and eat it.

What the past few days have confirmed is that David Cameron is effectively the Downing Street branch of the super-rich. That he himself is part of the 1% is beyond dispute. His father was worth an estimated £10m which is now being distributed to the Cameron family in a gradual and tax-efficient way with much of it probably still offshore.

What have the super-rich got for their investment in British politics since 2010? Cuts in personal taxes, invitations from George Osborne to advise on overhauling corporation taxes, the security of knowing that their tax havens will be treated with due leniency and sweetheart deals allowing them and their companies to pay little to no tax while HMRC crushes any ordinary people it suspects of not paying sufficient tax.

We are led to believe that Britain is a representative democracy. But we now have an era of un-representative democracy. With a few exceptions, our politicians no longer resemble, nor do they work for us.

Amid a crisis in the rental market, you have a housing minister, Brandon Lewis, who runs a private rental portfolio. You have a former investment banker, Sajid Javid, now claiming to be trying to save the British steel industry while his government has stopped the EU from imposing tariffs on the cheap Chinese steel that is destroying the British steel industry.

And you have a super-rich prime minister who vows he’ll take on tax havens, all the while blocking any serious attempt to do so and also profiting from them all his life.