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TTIP: legalizing Kleptocracy |
Of course corruption has always existed in capitalism. But
neo-liberalism, the ‘free market’ system that started in the 1980s,
promoted it on a vast scale for two reasons:
1.
Neo-liberal deregulation and privatisation promoted the dominance of
financial capital and the expense of industry and the state.
Financialisation and low capital gains taxes have turned big companies
and utilities into cash cows, virtual banks with huge wealth, looking to
maximise the
interest
on their money and minimise their tax. Finance capital is, after all,
basically about swindling. In the middle ages they called it usury.
2.
The shift to the right crashed ‘socialist’ command economies and
undermined nationalist governments in the third world, replacing both
with corrupt and usually highly authoritarian neoliberal regimes.
Getting hold of the state apparatus has become a royal road to
mega-wealth for dozens of dictators and their cronies through simple
theft.
The core of it is the banking system. European
and American banks receive (read: launder) billions of dollars every
year from international mafias, and in particular from drug dealers.
Sometimes by accident some of this comes to light. In 2006 Mexican
soldiers intercepted a drug shipment in Ciudad del Carmen and found a
cache of documents showing the Sinaloa drugs cartel had made payments
of $378 billion to the American bank Wachovia, a subsidiary of the
financial giant Welles Fargo.
Roberto Saviano, the
author of the best-selling Gamorrah which exposed the workings of the
Neapolitan crime organisation Camorra, claims that London is the centre
of money laundering for Latin American drug money. Even the British
National Crime Agency says:
“We assess that hundreds
of billions of US dollars of criminal money almost certainly continue
to be laundered through UK banks, including their subsidiaries, each
year.”
Saviano says that Mexico is the ‘heart’ of
the drugs trade and London its ‘head’. Antonio Maria Costa, head of the
UN Crime and Drugs Agency, says drug dealers invested $352 billion in
Western banks in 2008, and this was key in keeping some major banks
from collapse.
So corruption – receiving money from
crime and drug cartels – is deeply ingrained in the culture of US and
European banks. And this is not going to stop, given the vast profits
involved.
The klepocratic state is an old story. It’s
reckoned that no Mexican president leaves offices with less than $100m.
Key Western allies from the 60s and 70s, like Mobutu, president of
Zaire (DRC) from 1965-97 and Suharto, president of Indonesia from
1967-98, both established murderous regimes and systematically looted
their respective peoples of billions of dollars.
Direct
corruption by the state is one thing, influence is something else. In
western democracies influence is stacked in favour of the rich and
powerful. In the United States and increasingly in Britain it is
professional lobbyists who fight their corner. The Atlantic magazine in
the US points out:
“Corporations now spend about
$2.6 billion a year on reported lobbying expenditures—more than the $2
billion we spend to fund the House ($1.18 billion) and Senate ($860
million). It’s a gap that has been widening since corporate lobbying
began to regularly exceed the combined House-Senate budget in the early
2000s.
“Today, the biggest companies have
upwards of 100 lobbyists representing them, allowing them to be
everywhere, all the time. For every dollar spent on lobbying by labour
unions and public-interest groups together, large corporations and
their associations now spend $34. Of the 100 organizations that spend
the most on lobbying, 95 consistently represent business.”
The
above account doesn’t include the direct payments and other gifts
given to members of Congress by big companies, not least the health
insurance and healthcare companies who have fought so long and so
successfully against a universal US healthcare system.
Britain
is going in the same direction. As in the United States, business and
politics are often revolving doors with former minister joining the
boards of companies they dealt with when in power. Seumas Milne says:
“…lobbying
doesn’t begin to cover the extent of corporate influence. More than
ever the Tory party is in thrall to the City, with over half its income
from bankers and hedge fund and private equity financiers. Peers who have made six-figure donations have been rewarded with government jobs.
“But
the real corruption that has eaten into the heart of British public
life is the tightening corporate grip on government and public
institutions – not just by lobbyists, but by the politicians, civil
servants, bankers and corporate advisers who increasingly swap jobs,
favors and insider information, and inevitably come to see their
interests as mutual and interchangeable. The doors are no longer just
revolving but spinning, and the people charged with protecting the
public interest are bought and sold with barely a fig leaf of
regulation.”
Corruption everywhere has the effect
of transferring huge amounts of wealth from the poor to the rich. If
poor individuals are not directly robbed, then their economic
situation, their public services, their health service, their
transport, their education – all these are robbed when taxes are
avoided and government revenues robbed.
You can’t
analyse corruption today by looking for illegal activity alone. Many of
the practices that happen in rich and poor countries are legal or in a
grey area where it’s difficult to tell criminal from the lawful.
For
example, property dealing in Britain is profoundly corrupt. House
prices in London (and thus in the whole country indirectly) are
pressured by the huge amount of hot money from corrupt Russian oligarchs
and assorted gangsters of various nationalities invested in the
expensive end of the market. But nothing here is illegal, as far as the
house purchases in Britain are concerned. It’s just that they are
bought with corrupt money and force up the living costs of millions of
ordinary British people.
Look at the purchase of rare
earth minerals from the Congo, essential for computers and mobile
phones. Much of this mineral wealth is controlled by war lord armies,
guilty of war crimes and crimes against humanity. The companies who buy
the mineral products they control – the moral equivalent of blood
diamonds – have no contact with them at all. Dealers act as a buffer
and through their transactions – perfectly legal – wealth based on rape
and murder is miraculously washed clean.
Finance
capital is by definition corrupt. The investment banks typically do not
disclose their fees to investors in advance (they call their charges
‘consideration’) by deduct self-decided amounts as they go along. Free
charging professionals like lawyers, and in many countries doctors and
dentists, make up their own huge fees. Isn’t this corrupt? But there’s
nothing illegal about it.
The tax dodges by major
companies like Amazon, Facebook and Starbucks, are perfectly legal.
They pay all the tax they are required by law – or by agreement –in
countries like Ireland and Luxemburg where they are registered. Whether
these practices are illegal in the UK for example is a very grey area.
But corruption it certainly is.
All these examples have the same effect: robbing the poor to further enrich the wealthy.
Read more: CADTM - The Panama Papers & Capitalism Today: Neo-liberalism’s World of Corruption