February 2024
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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.

4 comments to How the rich have bought our democracy

  • NoMore

    Governments if they could get away with it would take ALL off our money because they believe they know best how to spend it. So I can’t condemn the wealthy for using tax havens just for trying to game the system with crony capitalism (Blairism, the EU etc.)

    I think corporation tax, employer NI and CGT should be scrapped also as these are just taxes on job creation.

    Frankly I would be happy with a flat rate tax of 15% for all with 10% NI ring-fenced to each contributor so everyone gets their own pension fund (you get out what you put in). The tax income would flood in and a lot of tax lawyers would be seeking other employment. Naturally you would be responsible for your own unemployment insurance and health insurance and so on but that’s called being a responsible adult. The Welfare state would revert to being a safety net for the UK citizen only.

    Of course the Left do not understand percentages so they will think the “rich” are “not paying their fair share” but the Conservatives will never have a better chance to do something radical like this. If they set tax at 98% for the wealthy the Left would still not vote Tory so may as well be hung for a sheep no?

  • Americanian

    I’m an American who grew up in Trump’s casinos. Trump IS NO DIFFERENT than Koch Brothers and Goldman Sachs.

    He’s the ultimate narcissist on the ultimate power trip and only cares about his own sweet a$$. He’s telling the people what they WANT to hear.

    He also has temper tantrums and hissy fits when he doesn’t get his way, just like a little baby.

    Trump is the last person you’d want in the White House. Trust me on this. The guy puts his photo and name on everything in sight he can. He’s DANGEROUS.

  • David Brown

    AMERICANIAN Trump says he wants to reduce third world migration eg Mexico / Pakistan. This is demographical destroying the America that was. Yes he may be lying to get elected. All the other candidates openly support destructive immigration and the outsourcing of American production to low wage economies.

  • Stuz Graz

    I think the reasons explained in this article are behind Trump’s success. Its a hold your nose none of the above vote on the basis it cannot be any worse than what we already have even if the only thing it does is clean the decks.

    Can now almost guarantee Trump is fairly clean financially. The slightest hint of anything Trumpy in the Panama files and it would have been everywhere. The silence probably suggests the opposite and it would be terrible if the Clinton Foundation was highly implicated in such things. Hopefully wikileaks publish the files and then we can all be reassured.

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