Panama Papers

Panama_papers_sz_chatThe good people of Reykjavik must be feeling an overwhelming sense of déjà vu. On the 20th of January 2009, thousands of citizens from all walks of life took to the streets to peacefully overthrow the Icelandic government, kick-starting the infamous Pots & Pans protests that would lead to a crowdsourced constitution and the complete reimagining of political life as they knew it.

Scenes outside the national parliament have been almost identical this week, and their grievance likewise. The Pots & Pans movement was born of the financial crisis and their government’s drastic mishandling thereof: fast forward 7 years and the now-former Icelandic Prime Minister, Sigmunder Davio Gunlaugsson, has been ousted as one of many political leaders caught up in the #PanamaPapers scandal.

Gunlaugsson was supposed to be of a new generation of Icelandic politician. His youth was an apparent testament to a break from the past, while his tenure was one of steady progress and consolidation. Yet, somewhat inevitably, Gunlaugsson has turned out to be a mere modernisation of those old and haggard figureheads he so condemningly trampled on his road to office.

But are we entirely surprised? One might have reasonably assumed that, given the movement Gunlaugsson came from, he would have harboured the principled nature of a dynamic grassroots representative. Instead what we have is yet another political leader, sucked in by the promise of greatness and corrupted by the rotten system around him.

Or maybe I’m being cynical. Maybe it is not the system but the man who is corrupt – maybe he is one of the rogue minority; a bad egg in the leadership box. Of course, that would be much easier to believe were it not for the other 11.5 million documents linking a myriad of global leaders and financiers to that self-same Panamanian company: including our very own Prime Minister David Cameron.

Many questions are begged of the Panama scandal: who in our country is implicated, how does the scandal affect us, is tax avoidance illegal etc. etc. These are all entirely legitimate lines of enquiry as we establish how best to proceed. But few, it appears, have identified the most obvious and damning truths exposed in the case of Gunlaugsson and many others – deep down, we’ve known them all along.

The Panama leak has pulled back the curtain on elitist rule, or rather the corrosive venality thereof. Even next generation leaders who stand in apparent opposition to the sleaze of global financial networks will struggle to resist such expansive forces; forces that will endeavour tenaciously to draw them in by hook or indeed by crook.

Many will find themselves drawn in out of pure necessity. This is because, in order to be taken seriously, even the most astute and principled of leaders must learn to play the game, which means giving more than a small part of oneself to it. Those who refuse and decide instead to stand by their principles will usually find themselves ostracized (see: Yanis Varoufakis) from any position of real influence or authority.

For most, then, joining-to-beat-them is the illusorily desirable option. At first, those who subscribe to the system perhaps do so with the best intentions of fighting from within, once their standing as a trustworthy economic player is secured. But it is rare that such intentions endure beyond the honeymoon period.

In the case of Ireland, proving their standing meant the repeated implementation of some of the most scorching austerity measures Europe has seen; in stark defiance of the will of the Irish people. The bending-over of former Prime Minister Enda Kenny in 2011 – after promising a new and fairer vision of Irish economics at the beginning of his second term – represented not and extension of the Irish austerity success story, as European financial forces might have spun it, but a subservience of Kenny to financial networks over his own people.

Such was his initiation into the international fold; a necessary hoop to jump through for all figures with a little bit of sway over economic performance in a thoroughly globalized world. It is in this initiation process, then, that the values attached to basic human decency become secondary: how else can one justify the culture of greed and inequality in which they are now directly implicit? The arrogance, the sleaze, the detachment from humanity that accompanies the quest for wealth and the consolidation of power based thereupon is indeed sickening, but remarkably contagious.

It is the most vicious disease known to man, infecting the minds of those at the top and attacking the very body of human society – and it dictates every sphere of global governance. The psychological fabric of modern leadership must become one that can reduce people to numbers and crunch them quite efficiently, because that is how one best proves their worth on the global stage. The rich must be seen as our saviours, our wealth-builders and economy drivers, while the poor must be seen to do little but scrounge off their success.

Such thinking has done all to perpetuate the greatest double standard of modern life; that is, the blind eye turned to the perversion of elites whilst the penniless and vulnerable are persecuted for all to see. Give aid to refugees, single mothers or the unemployed and they’re a drain on the pockets of hardworking people: let a financier or political leader cheat his country out of taxes by the million and it’s considered fair game. There is no deportation or sanctions process for the rich. They make the money, so that’s OK.

The warped financial idolatry of global leadership has given rise to a belief in the invincibility of elite actors, allowing them to first rig and then cheat the system without guilt or fear of repercussion; Gunlaugsson is as much a proponent of this belief as a symptom. Is every leader inextricably preordained to become a greedy and shameless money-hoarder? Absolutely not. But many will as a necessary product of their environment, such is the corruptive nature of a world governed by the theological doctrine of capitalism. As long as money talks, the cycle continues, and human beings will exist as a second-rate commodity.

Comments (35)

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  1. Alison says:

    Excellent article. The problems are also due to the sheer size of this kind of global network. As soon as an organization or system of any kind becomes too big, it starts to suck people in and lose any ethical bearing.

    One environmental campaigner (I forget who) said that if we were to attempt to create an alternative sustainable system big enough to rival the current one, it would inevitably become corrupted or unworkable. One of the founders of the Occupy movement also made the point that the problem is what the system does to individuals, more than vice versa, adding that they weren’t trying to overthrow the 1% to make a new 1%. So rather than focusing on the corruption of individuals, we need to focus on undermining the integrity of the whole system (although targeting corrupt individuals to bring them to justice and to illustrate how disgusting the system is can play a role in that)

    Iceland can get rid of its prime minister because it’s small enough in population to still function somewhat as a real democracy. Another reason for more devolution and local power (even after we’re independent). People keep telling me to read ‘Small is Beautiful’ by Michael Schumacher. I haven’t got round to it yet but it looks like it’s time.

  2. Alison says:

    Woops. Obviously not Michael Schumacher. E.F. Schumacher. (Damn, wish I could edit comments!)

  3. Mary MacCallum Sullivan says:

    small is beautiful – and more manageable! Let’s start here, in Scotland….

  4. Alf Baird says:

    Much of Scotland’s economy (and land/estates) is today owned and run by offshore private equity ‘funds’/trusts who suck out surpluses/gains to non-tax jurisdictions. These ‘funds’/trusts depend on maintaining inflated asset values (paid for by consumers) in part via exploiting regional monopolies (i.e. monopolies given to them by the ‘host’ nation, ‘us’ in other words!). It is possible for the ‘host’ nation to significantly reduce these inflated asset values (e.g. through much stronger and focused regulation, licensing, land taxes etc), which could in turn see the offshore ‘funds’/trusts depart, in due course, as their asset values decline, and their inability to service debt. Even Holyrood has such powers available to it.

    1. Ian Kirkwood says:

      Yes Alf. I am fed up being a part of the host to these parasites. Collecting the full land value (at 5% a year in AGR) cancels land speculation totally and immediately. No more land market. With AGR we can have affordable housing and reformed land ownership patterns automatically. Speculators should go elsewhere, and invest in ideas, enterprises and industries – something productive in GDP terms – and stop betting on private gains from the public value (society’s investments) invested in land. That value is a nation’s birthright.

  5. bringiton says:

    It should be a condition of UK citizenship that people domiciled in the UK pay their taxes in the UK.
    Those who claim to be domiciled in another country should be stripped of UK citizenship and forced to live here under a visa system.
    I believe that BoJo recently renounced his USA citizenship when they threatened to tax his UK income,we should be doing the same.

  6. Ronnie Morrison says:

    How right Fraser Stewart is – it is the system which needs to change because no one can manage a corrupt system without becoming part of it.
    We have inherited a unique grassroots movement from the Referendum. It needs to consolidate into a sufficiently strong force to ensure that our representatives in parliament remain accountable to the electorate at all times – not just every four years. They are elected to represent, not to invent or pursue their own ppersonal interpretation of what is best for us. Only by a muich closer relationship between elected members and activists – as opposed to the Party Machine, can we exert pressure for basic system change.
    The National Yes Register was established to provide a link between all of these groups in Scotland and it deserves the enthusiastic support and participation of all interests and groups who believe the system can be changed for the better.
    http://www.nationalyesregistry.scot

  7. impossiblysmoothcobra says:

    “such is the corruptive nature of a world governed by the theological doctrine of capitalism”

    And your alternative is – what? Socialism?

    State ownership and control of the commanding heights of the economy? Socialism?

    The Socialism that has consistently failed to provide a quality of life and standard of living remotely comparable to the successful alternative, state-regulated Capitalism?

    The Socialism that has been and continues to be a complete disaster EVERYWHERE it’s tried, bringing wholesale misery to entire population, and killing millions (sometimes deliberately)?

    Rather Socialism, than state-regulated capitalism? The state-regulated capitalism that continues to raise quality of life and standard of living? Where people live longer and happier lives? That is lifting millions our of relative and absolute poverty around the world.

    Yes, let’s have Socialism. That’s a great idea.

    Oh wait, let me guess:

    “It will be better next time

    1. John Page says:

      Do you get paid to post this same shite every time someone contributes an excellent article on Bella…….

    2. Darby O'Gill says:

      I think you may be confusing socialism with something else. Socialism does not mean state ownership but simply public ownership as with the NHS, which few would describe as a complete disaster.

    3. Frank says:

      I’m getting fed up with you trying to turn every discussion on Bella Caledonia into a discussion on socialism; moreover, your dog whistle comments coupled with your cold war rhetoric suggests that your motivations are not sincere; perhaps you are a troll causing trouble? I suggest the editor considers blocking your address if such a thing is possible. People like you can seriously ruin a good website. From now on I will be ignoring you – I suggest others do the same.

      1. Frank says:

        Sorry my last comment was aimed at impossiblysmoothcobra not Darby.

    4. Coul Porter says:

      No. Something of an antithesis to your impossiblypolysyllabic moniker – one word – HONESTY

      ‘State-regulated’ capitalism (as practised in the City State of London) begs the question; Who regulates the regulators?
      It is also responsible for the marginalisation of those not who are not ‘on-message’ either socially or geographically.

  8. Fraser Stewart says:

    Never once did I suggest socialism anywhere in this article, nor do I advocate for it. Also, the word socialism itself is an immensely vague term, which differs in meaning depending on where in the world or which point in history you refer to. I don’t advocate really for the implementation of any, but important to clarify. Lastly, not-theological capitalism does not strictly amount to radical Marxism; I’m merely suggesting that the values attached thereto are detrimental and fundamentally incompatible with governance based on the will and benefit of actual people.

  9. Brian says:

    We should be applying the same kind of pressure on Westminster as the Icelandic people are placing on their government.

    Is there an appetite for that?

  10. John Page says:

    Thank you very much for a great piece, Fraser.
    I suppose the key message is that democratic units should be small enough so that when this shenanigans comes to light the people are sufficiently near their elected leaders to go round and kick their arses. An independent Scotland needs to have the truly local and empowered democracy that Andy Wightman and Lesley Riddoch have been advocating for years. (……and spare me the response from the ejit above about Scandinavian politics being whatever……)
    John Page

    1. impossiblysmoothcobra says:

      “An independent Scotland needs to have the truly local and empowered democracy that Andy Wightman and Lesley Riddoch have been advocating for years”.

      John Page.

      ———-

      John, 100% serious question:

      Your SNP’s popularity continues to increase. Therefore it is reasonable to assume that their approach and policies are popular, and what the people who vote for them want.

      Far from acting to develop a ‘truly local and empowered democracy” (which in fairness is more in evidence in parts of Scandanavia), your SNP are doing exactly the opposite – Centralising (power … which is what they are all about, power. Not ‘people power’ – their power.)

      While insisting that ‘nothing can be done’ (about local democracy, or anything really) in the absence of ‘independence’, ‘powers’, ‘magic levers’ etc.

      So, seriously, on what basis do you believe that in the event of a Yes vote at any ‘indyref 2’ there is any likelihood of any kind of “truly local democracy” emerging?

      And not a centralised controlling big nanny state?

      People in Scotland want what many other people in other parts of the world want. They want a kind of benevolent dictatorship; they want someone else to do everything for them, so they can get on with having fun

      (Waving saltires, painting saltires on your face, gathering in crowds and shouting, National Vanity etc. in your case)

      The floor is yours.

      ps “Because Andy Wightman and Lesley Riddoch say we should” is not evidence that ‘local democracy’ will actually emerge.

      1. John Page says:

        Away an’ raffle yersel………

      2. G Kirk says:

        It’s reassuring to know that you know what the people of Scotland want – how do you manage to say lots of words that make very little sense and then post it thinking ‘that’ll show them’. Your ego is way bigger than your IQ. You snipe and criticise like a school bully. Go away you pathetic little man.

  11. w.b.robertson says:

    the panama papers surfaced via good old fashioned journalism, now getting its act together on a global scale. what an embarrassment for the world`s moneyed elite who want to rule in the dark. We should be thankful – and remember that it was only a wee while back that Britain was in the throes of a witchhunt against the media led by our own “unco guid”. All kind of do-gooders were out to manipulate the law to put the shackles on those who blow whistles and let in the light. Society needs more transparency. Not less.

    1. J Galt says:

      Or perhaps a good old fashioned “psi-op” like all these other “Leaks” jobbies.

      Damn few prominent Americans among the villains being served up to us – funny that?

      Do you honestly think this would have seen the light of day if it seriously harmed “them”?

      1. c Rober says:

        There is a reason why few Americans are being served up , they remember being burned first time with panama , ie Noriega first time around , so offshore elsewhere or have their onshore ways to avoid tax.

        Google , Apple , Amazon and intel , all use the likes of friendly EU states for corporate tax avoidance , the individuals all use the system in America – through creating legislation in their favour.

  12. pedandtrypedant says:

    Your eth’s not working: Sigmundur Davíð Gunnlaugssonin. And i-acute (Davíð).

    1. pedandtrypedant says:

      Gunnlaugsson! Gunn. Laugs. Son. Face. Palm.

  13. Ian Kirkwood says:

    We are all by nature ‘rent-seekers’. By that I mean we are driven, especially when it is ‘legal’ to take for ourselves a portion of the public purse to enrich ourselves relative to others. It equates to a survival mechanism from biology. To get away with not paying a tax is one example. It is however dwarfed by the mass privatisation of public value created by society in the form of the rental value of land. This ‘economic rent’ is the rent referred to in the economists’ term ‘rent-seeker’. This activity is parasitic, living off the industry of others, itself producing nothing (GDP).

    Until we each view our private free capital gains on our site values as ‘legal’ theft from the public purse, we are no better than the Panamanian ‘company’ holders.

    And only when that Annual Ground Rent (AGR) is collected in place of landlord-designed taxes, will we be free of tax evasion (AGR cancels all tax evasion immediately by billing annually all plots of UK land at 5% of their value, minus improvements).

    See http://www.slrg.scot

    1. John Page says:

      Very sound and relevant comments in the context of evasion/avoidance……….the only way to avoid AGR is to claim your land is worth lower than the value put on it by the land tax body……….in which case you wouldn’t mind it being compulsorily purchased at the lower figure………
      John Page

      1. Ian Kirkwood says:

        Sites on which AGR was not paid would be considered vacant, repossessed and auctioned off. No need for state revenue to be invested/wasted in compulsory purchases. It is not even necessary to know the identity of the former owner.

        1. John Page says:

          Even better, thank you
          John Page

  14. john young says:

    Maybe impossiblysmoothcobra could go to some of the countries at the cutting edge of our imposed capitalism and see for himself the the raising of their life expectancy standard of living e.t.c. as their land is vandalised assets stripped/stolen so that we in the capitalist societies can enjoy a better life style,why not try Eastern Timor a population of 1mil of which 1 3rd were massacred/raped their tiny enclave no threat to anyone all but consumed by the capitalists of the USA/Australia and the UK nodding as usual in the background all for the oil/minerals worth billions,that is to name but one.

  15. John Bryden says:

    Thanks for the excellent article. It happens that I was, for about 6 months, the economist in the Cayman Islands government, in 1969 when it was just getting going as a major tax haven. The register of companies and trusts there was a publicly accessible document, and I duly read it at the time. It made interesting reading because although there were many names there that I did not recognise, there were the names of several well-known politicians from all three of the then major UK political parties. So this is an old story. What is new is the vast expansion of tax havens, tax havenry, tax avoidance, and nefarious off-shore activities since Liberalisation of international and national financial regulation after the 1970s, and the ‘skillful’ activities first of UK-and Channel Islands based lawyers and tax experts to develop the business. The excellent book by Nicholas Shaxton ‘Treasure Islands’ has a lot of the history, and evidence, around the subject.
    We must remember that the UK tax avoiders are probably not the most obvious Panama clients, because they have many other options, including the ‘other three’ major legal firms dealing with this business, as well as no doubt others. And the British Virgin Islands are far from the only tax haven out there. A number of US states have set themselves up as tax havens, again since liberalisation, and motivated by the fact the US tax avoiders and corporates organising transfer pricing schemes were using UK based (or UK dependent territories tax haven based) avoidance schemes and service providers. So what we are seeing in the currently discussed leaks is probably only the thin edge of the wedge.
    The much lauded London financial sector is of course a major beneficiary of the whole business, as Shaxton makes clear in his book. Therefore the UK government, for all the noises over the years, has probably not been very enthusiastic about closing ‘its’ tax havens down!

    1. Alf Baird says:

      John, I would agree that “what we are seeing in the currently discussed leaks is probably only the thin edge of the wedge.” Indeed, much of the Scottish economy is today offshore owned through non-transparent ‘funds’ and ‘trusts’, including major utilities in transport (ports, airports) and energy, as well as land estates, property, whisky, aggregates etc. We should perhaps change Scotland’s epitaph to: ‘bought and sold for offshore gold’. I don’t see any SNP policy to deal with this, which means one must assume that they either support it or are merely ignorant of it. Our Scottish Government cosies up to it nonetheless, the recent £10bn China infrastructure ‘fund’ being an example. Many ‘prominent’ people in Scottish public life hold authoritative positions in some of these offshore funds/trusts; perhaps we should ask them to consider their positions, as with Mr. Cameron, and the Prime Minister and Government of Iceland, etc?

      1. Ian Kirkwood says:

        Yes. Whisky, for example, not much use to Scotland (exports).

      2. Phil says:

        I thought that the SNP would propose to ensure land holdings over a certain size / sale value must be beneficially owned by identifiable (preferably onshore?) owners. If so it might seem a meager start, but still a start.

        1. Alf Baird says:

          Phil, the SNP joined with the unionist parties in actually voting against a Greens amendment to the recent Land Reform Bill which would have introduced such limitations on offshore owners.

  16. Neil says:

    I look forward to the many Rangers hater posters in the Bella Caledonia tribe to call for the head of Celtic supremo Dermot Douglas. It is clear that where Rangers went wrong was that they were simply incompetent (David Murray) or (probably deliberately) negligent (Craig White) compared to the much more professional approach to tax avoidance taken by those who prop up Celtic.
    Reckon all I’ll see is hypocrisy – no chance of anyone on here doing the right thing.

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