Joe Sabatini discusses how the Panama Papers have confirmed what we knew about the ruling class and looks at how they provide an opportunity to re-engage the public discussion over how our economies are being run, by whom and for whom.
The leak of 11.5 million documents from Panamanian law firm Mosseck Fonseca is the greatest release of ‘private’ information in history. It provides a treasure trove for investigative journalists, activists and anyone who wants to understand who rules and what they did with our money.
The leaks confirm our increasing realisation that we are being ruled by an interconnected class, a 21st Century ruling class. The disconnect between where wealth is produced and where it is stored can now be traced, and the leaks make the job of Marxist critique all the easier.
We can now see how the future Icelandic prime minister was able to keep financially afloat when the value of the local currency halved, how David Cameron was able to make tough speeches while secretly blocking moves to reform tax havens. The leaks also reveal the way leaders of states get around sanctions regimes, so that the leaders of North Korea, Syria and Russia continue to hold accounts that they can access.
This shows the true extent to which the ruling class have been operating with two intersecting logics. The first logic is driven by competition between capitals and inter-state competition, which is what we see being played out most of the time in the news. The second is their unity in terms of the way they accumulate personal wealth, and reproduce themselves as a class. This latter is secretive in a way that is far more telling than that of the secret services.
They want us to believe solely in the first logic. That the world is made up of two groups of leader: those who are democratic and those who are not. The problem when we follow the money is that it looks like there is only one type of leader – the person who uses their wealth and power to avoid tax and build up a fortune to hand to their children. This is a form of class inheritance which has much in common with the feudal and slave holding societies of the past.
Yet in these previous societies the drivers were more open, war, direct appropriation of wealth and inter-marriage. In a late and globalised capitalist world, the market mediates the production and consumption of wealth. This has enabled those on the top to hide their personal appropriation. Where in previous class societies wealth, visibility and power were interconnected, the reverse is the case under capitalism. We are not peasants looking up at the castle, knowing who is inside.
This is why the revelations are so damaging. And when we think that Mosseck Fonseca is the fourth largest offshore bank, we are left with the thought that we are looking into a fraction of what is out there.
The Panama Papers highlight the role that is being played by hackers and whistleblowers. As capitalism has become more integrated and secretive the role of whistleblowers has increased. Chelsea Manning and Edward Snowdon have provided evidence of state intrusion into private lives, extra-judicial killings and torture. Whistleblowers have been important in bringing banking scandals to light and have been critical in surfacing issues such as celebrity child abuse.
Yet possession of information needs to be complemented with action – in Iceland it was not the revelations that brought down the prime minister, but the fact that 22,000 people out of a population of 320,000 occupied the square in front of parliament.
The situation in Iceland has also been instructive in terms of going beyond the taking down of figure-heads towards achieving structural change. While headlines internationally have concentrated on the Prime Minister stepping down, the local Icelandic news is focusing on continuing manoeuvres by the president and the governing parties to retain control at least until autumn, and by the failure of the parliamentary opposition to block the early release of jailed bankers.
This raises the question of voting in a different government. Again Iceland’s experience is instructive. A recent Jacobin article highlighted the experience of the government that was elected in 2009 – the first majority government in Icelandic history that was made up of social democrats and the Green-Left Party. While preventing the worst of austerity falling on the population, they cut a deal with the British and the Dutch to pay them back as creditors, and enabled the centre-right forces who had been ousted to remobilise around defence of the nation against foreign creditors, and in defence of indebted householders who are paying higher taxes.
This resulted in the very tax dodgers who have been ousted coming back in 2013 only to be caught out a second time by the Panama Papers.
The depth and rapidity of anger expressed this week contains both the unfinished business of 2009, and an opportunity to learn from history and have another go. The fact that larger numbers of Icelanders demonstrated this week than in 2009 is a sign of hope.
Just as we have been seeing in Iceland, the Panama Papers offer people across the world an opportunity to re-engage the public discussion over how our economies are being run, by whom and for whom.
While we should be putting the spotlight on the culprits, we should also be focusing on questioning why such wealth exists in the first place. Even if they paid their tax, the overall structure in which in one class produces the wealth and another appropriates it would remain.
We have seen during the 20th century that is it is possible to place limits on private wealth appropriation, but the same century also revealed the process by which the ruling class circumvented those limits. It is for this reason that we much connect the revelations in the Panama Papers to capitalism, and show that when we live in a system in which one group of people has a monopoly of money and another has to sell their capacity to work for their share. That when the first group gains too much political power they hoard their wealth and pass it to their children, creating an aristocracy that is rooted in capital, but has everything to do with birth.
This is the challenge that faces all political forces that seek to operate within the system. Even people pose as outsiders like Jean and Marine le Pen have been found out in the Panama Papers – which goes to show that these Fonsecans are a bunch of stashists.