Last Sunday, The Observer newspaper did a service to the people of the world, although in a week when pointless metal-encased flames and uniformly branded sportswear are the biggest news in town, you would look hard in the rest of the British media to find out.
In a series of articles, and in conjunction with the campaign group Tax Justice Network, London’s most venerable liberal(ish) weekly exposed the true state of the world economy. It is not a pretty sight, but at last, we critics of trickle-down free market horseshit have some reasonably accurate figures to throw back at Adam Smith/Cato Institute blowhards. Not to mention third wayers like Progress…
The former Chief Economist at McKinsey, Mr James Henry has just produced the most detailed estimates of the offshore economy – you know, all that moolah stashed away in tax havens from the Caribbean to the Channel Islands, by way of Switzerland and Lichtenstein. This is forensic accounting at its best, echoing the work over the years of Mr “follow the money”, Greg Palast.
To quote from the front page:
Their wealth’s, as Henry puts it, “protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy.”
Helpfully, the report can quantify in numbers both the approximate number of individuals and what the probably keep hidden, although the report is careful not to attempt to put a price on the number of apartments in Chelsea, Canalettos on the wall, or Van Gogh sketches owned by this global elite. The figures are pretty instructive:
- The Approximate amount of wealth held “offshore” in tax havens – £13 TRILLION to £20 TRILLION. Thats between $21 and $32 TRILLION.
- The approximation number of people hiding money offshore around the globe – ten million.
- Estimated amount owned by just 92,000 of the above ten million – $9.8 TRILLION.
I suppose that we can now put a number on the size of our true global Ruling Class, and, as a result, we know have to radically rethink our idea of the gap between the rich and poor, as both the poor and the very rich are now palpably underrepresented. It also puts the supposed “death of class politics” (TM Mssrs P. Mandelson, W. Clinton, A.L.Blair) into its proper perspective.
Typically, the biggest losers in the period measured, from the 1970’s to 2010, have been Oil and Mineral rich developing nations and the former Soviet bloc. Russia lost $798 Billion since 1990, the Ukraine $167 Billion, & the Kazakhs $138 Billion. Predictably, Africa has suffered badly, Nigeria bleeding $306 Billion and Ivory Coast $141 Billion respectively.
But these are notorious Kleptocracies surely? This doesn’t happen in Democracies does it? Err, yup ‘fraud so – Mexico lost $417 Billion, Venezuela $406 Billion, Brazil a whopping $520 Billion. to name but three…
Fans of the Chinese model of free market dictatorship will be ashamed to learn that since the 1980’s, her economy has lost a staggering $1,189 Billion to offshore tax havens. The rest of us are not all that surprised…
To put this in perspective, if the Super Rich paid only 30% tax on their interest, it would amount to more than the rich economies spend in a year on aid – some $189 Billion. (That’s if they only “earned” 3% interest)
The figure of £13 Trillion is a sum that dwarfs the combined economies of the USA and Japan.
Under increased pressure to do at least something, the British Government recently entered into the mother of all sweetheart deals with Switzerland and its Bankers – UK residents are going to be able to make a one-time payment of between 21% and 41% to clear the slate on undeclared assets. This allows tax dodgers to still avoid both the current 50% top tax rate, and the future 45% rate.
One of the most industrious founders of the UK-based tax haven industry was reportedly one Ian Cameron, father of the Right Honourable David Cameron, our Prime Minister.
The Mayor of London, Boris Johnson, has repeatedly made statements to the effect that, since 2008, it is time to stop “bashing bankers” and let them get on with it, and his hopes to make the City of London some sort of “haven” for international finance. He also trousers £250,000 per annum for writing a column for Telegraph Newspapers, owned by the Barclay brothers, who are all registered offshore for tax purposes. This amount is somewhat more than his substantial salary for running our Capital City. There is, of course, no suggestion of any linkage here.