#PanamaPapers scandal applies a blowtorch to the murky workings of capitalism

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The Panama Papers have shown us just how the murky world of capitalism works and why we need to get rid of it, writes former ATO Assistant Commissioner John Passant.

POLITICIANS WHO insist there’s no money for wages, pensions, benefits or public services had their secret hoards exposed this week, writes Socialist Worker UK.

The Panama Papers revealed the clients of just one of the world’s top tax dodging offshore banks. They include 12 former and serving heads of state, three top Tories and David Cameron’s dad.

Much of the media coverage focused on Russian president Vladimir Putin and senior figures in China and North Korea. But these corrupt tyrants are part of the same ruling class that lords over us here.

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The papers included 9,000 names from Britain and thousands more from other Western countries.

In theory, tax-dodging breaks our rulers’ own rules. But they’re almost all at it — so it’s no wonder they get tangled up in hypocrisy.

Cameron huffed and puffed that tax dodging was “morally wrong” when comedian Jimmy Carr was in the spotlight. But when it comes to Cameron’s inheritance, tax dodging is a “private matter”.

When Google’s tax arrangements came under fire in 2012, boss Eric Schmidt had a more honest defence of the schemes he was “very proud of” saying:

“It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”

Capitalism is built on accumulation — turning money into more money. It’s enforced by ruthless competition. Capitalists who fail to grab as much as they can risk being torn apart by the rest.

Far from opposing this competition, states and their laws are deeply embedded in it. They enforce and underwrite it at home and get stuck in against competitors abroad.


So the Tories’ repeated promises of a clampdown have rung hollow and delivered only crumbs.

We’ve heard the same fake fury from our rulers over steel job losses. They claim indignation at China’s “dumping”. Yet all it really means is that Chinese firms have cut their prices to boost flagging sales. It’s what any capitalist – even good honest British ones – would do.

The accusations are all the more dishonest given the blackmail Britain’s bosses used to force their way into other countries’ markets, from Empire’s gunboats to the International Monetary Fund.

Business secretary Sajid Javid was making a speech in Australia extolling the virtues of free markets as the steel crisis was unfolding in Britain. According to the Financial Times, he made an “inspiring” defence of both free trade and free enterprise.

The business secretary declared:

“In recent times, these twin concepts have come under attack like rarely before — and they really need to be defended.”

The real culprits for destroying thousands of livelihoods are successive steel bosses who’ve run the industry down with decades of underinvestment. They are the shareholders who got rich wearing workers out but won’t pay their pensions in their old age.

They are the Tory politicians happy to throw the workers on the scrapheap because they see more potential for profit in the City banks.

And for all their callous hypocrisy, they are acting exactly as capitalism demands.

The good news is that they are in trouble. We need to go on the offensive against the Tories — and to link that into a fight to get rid of the whole rotten system.

This story was originally published on John Passant's website en Passant on 12 April 2016 and has been republished with permission. John is a former assistant commissioner in the Australian Tax Office in charge of international tax reform. You can follow John on Twitter @JohnPassant

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