Wealth trickles out not down
Ninety Five percent of our work coincidentally consists in selling vehicles to avoid taxes.
Mossack Fonseca Partner
There is a reason that politicians are so keen on the glittering generality that is ‘Hard Working Families’: it is a phrase that appeals to us at a deep moral level. It resonates with an internal schema many of us hold as to how our society best functions and how we can play a productive role in it. It is OK to be aspirational as through our industry and success we can earn enough to be loving providers to our families, pillars of our community, valued colleagues and the taxes our labour generates can provide public services and help those less fortunate.
The phrase chimes with our belief that we have obligations as citizens which if we fulfil entitles us to some rewards. In return for our endeavour, and ceding some of our sovereignty and money to the state, our remaining freedoms will be protected. It is an ethical bargain most of us enter into to avoid the chaos life would be if everyone was solely only working for themselves. Members of ‘Hard Working Families’ are good citizens, doing their bit to keep society from falling apart. It’s a powerful phrase which the establishment repeat over and over.
Another thing the phrase does is alienate and turn people against those who are not contributing. Those that are often referred to as “scroungers”. An ideology that was perpetuated by Thatcher herself when she said:
I think we’ve been through a period where too many people have been given to understand that if they have a problem, it’s the government’s job to cope with it. ‘I have a problem, I’ll get a grant.’ ‘I’m homeless, the government must house me.’ They’re casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. There’s no such thing as entitlement, unless someone has first met an obligation.
And it is a problem when some get many of the benefits of society without fulfilling the obligations. Although one thing that is seldom acknowledged is how much harder it is for those born into poverty to succeed. Social mobility is decreasing year on year. The middle classes are shrinking. While I can see why people get upset that there are so many others that need subsidising. Many of those who take more than they receive from the system are not avoiding their obligations, they have just never been able to or don’t know how to get into a position to fulfil them. It is a waste of human potential and a failure of the system more than anything else that so many are dependent on the toil of others.
That said, the recent leak of the Mossack Fonseca papers has shone a light on a section of society who are more than capable of contributing but who seek to deliberately avoid their obligations.
Globally the super rich have siphoned offshore at least $21 trillion, and possibly as much as $32 trillion. This is an amount much greater than the total economy of the USA. Not only is this money that is being stolen from indebted national budgets and which could be spent on hospitals and other key public services, it is money that is unproductive in that vast quantities of it are just sitting around doing nothing. Trickle down economics may work in principle in a perfect society, but now the elite have become so rich that they can’t possibly distribute their wealth.
The CEO who avoids tax can’t spend or invest all of his £9 million pay package. However, if his 4500 employees were paid £2000 each extra then most of that money would be spent. The CEO might be in a position to invest in a start up but it is the spending power of the ‘Hard Working Families’ that allow that start up to flourish. While the CEOs, politicians and bankers get richer, they have been presiding over a period of lower wages and higher profit margins. A lower wage economy is not a distributive one and lower wages prevent new businesses from surviving as ‘Hard Working Families’ have less money to spend. Not only is the tax avoider not paying his/her way they are preventing others from generating more tax.
And these same people, the elite and their political pawns, who avoid their responsibilities both in terms of paying taxes and paying their employees a good wage, also subvert democracy by lobbying to enact policies that favour a small percentage of people. Whether that be turning a blind eye to financial misconduct, or selling off state assets at bargain prices, or privatising public services or eroding workers rights. They own our current system while dodging their obligations as citizens. The big accountancy companies help create our tax laws and then they advise their clients how to subvert them. The party of the current government has a dwindling grassroots membership but is funded by the very same super rich who are so keen on not paying their way. The Tories don’t need support from the public to get into power. They just need millions from businesses based in tax havens. That’s enough PR money to achieve the less than 30 percent of the popular vote to secure a majority government. Then they are free to enact policies that help that elite and in turn reduce the number of ‘Hard Working Families’.
The sole role of modern government is to enable as much profiteering as possible while spinning the mythos of societal togetherness.
It will be interesting to see if these leaks make a difference to the behaviour of the establishment. Shame can be a powerful tool for change. The spell only works if there is an illusion we are all in it together. When Brown and Cameron use the phrase “Hard Working Families”, it is inherent that we think that they are like us, that they have gotten to the top by just working that little bit harder. However, the truth is they don’t live by the same rules. They are disconnected from everyday reality. What we think is wealthy is just normal to them. They preach the Big Society but they only leach from it.
You can see how distanced from reality they are by reading the words of Sir Alan Duncan MP:
Shouldn’t the Prime Minister’s critics really just snap out of the synthetic indignation and admit that their real point is that they hate anyone who has got a hint of wealth in them?
May I support the Prime Minister in fending off those who are attacking him, particularly in thinking of this place, because if he doesn’t, we risk seeing a House of Commons which is stuffed full of low-achievers who hate enterprise, hate people who look after their own family and know absolutely nothing about the outside world
I don’t hate wealth, but I hate wealth that avoids its moral responsibility to contribute to society. I don’t hate people who look after their families, but I hate those who do so by actively trying to make it harder for others to do the same.
As much as I hope shame will make a difference, the most likely scenario is that this scandal, like all of the previous scandals, will fade into obscurity. We will quickly forget that the illusion was shattered and continue to strive to be ‘Hard Working Families’. After a period of contrived humility the establishment will continue to milk us for everything they can get.
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