Panama Papers shows a sham democracy of the capitalism


Is it the people, represented by their elected government? Or is it the leading players in the world of finance, who are the beneficiaries from the legal loopholes revealed by the recent leaks from Panamanian law firm Mossack Fonseca?
Clearly, in a so-called democracy of the capitalism it should be the former — people should hold the power. The Merriam Webster Dictionary’s definition of democracy reads as follows: a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections.
Well, in the United Kingdom — and throughout the majority of the Western world, I would suggest — we have a “government”, we have a “system of representation” and we have “periodically held free elections.” No complaints on any of those fronts.
But what we do not have is “supreme power … vested in the people and exercised by them.” Supreme power, when you peel back the layers of bureaucracy and examine what lies beneath, is in the hands of the corporate world, and especially the financial world.
That is not always clear. Most of the time, we chug along, living our unremarkable day-to-day lives, laboring under the illusion that just because we are sometimes given the opportunity to elect and dismiss our governmental officials in free elections, we are living in a well-functioning democracy.
Occasionally, however, the truth reveals itself. The most obvious recent example came with the global credit crisis of 2007-8, which was essentially caused by banks getting greedy and chasing quick and easy profits by lending money which didn’t exist. The second part of that sentence might be contentious and the overall causes of the crisis, which deeply damaged the lives of millions of people, are not easy to pinpoint in a few words.
What remains beyond doubt, however, is the first part: the crisis was caused by banks. It was not caused by governments, or monarchs, or the armed forces, or mafia gangs. It was caused by banks.
And what happened? Ordinary people — the people who should, remmember, hold the power in a democracy — were forced to come running to the banks’ rescue with a series of “bail outs” funded through the tax system. The banks which had caused the crisis were rescued by the people who they were supposed to be serving because, we were repeatedly told, they were “too big to fail.”
Really, what should be “too big to fail” is democracy; but by forcing people — who were given no choice in the matter and had been seriously adversely affected already — to pay for the rescue of the banks, we saw where the power really lies.
And now we’re seeing it again. The Panama Papers have revealed the fine details of something we already knew: how the super-wealthy are able to evade their tax obligations by taking advantage of loopholes which are, no surprise, only open to the super-wealthy.
It’s hardly surprising. Everybody knows that “crown dependencies” such as the Cayman Islands, the Virgin Islands and Bermuda are tax havens. Everybody knows that Swiss bank accounts are dodgy. Everybody knows that countless major corporations do not pay enough tax. We have known all of that for years.
Defendants of these practices would argue that the investors or corporations concerned have not done anything illegal. But that’s a petty, small-minded argument — if legal loopholes allow certain members of the privileged and powerful elite to dodge tax, the laws should be changed to close those loopholes.
If the majority of people didn’t like these practices — which we don’t — and wanted to prevent them, it would not be difficult. Laws are not forces of Nature: they are made by people, and can be changed if people don’t like them.
The mass data leak which has been christened the Panama Papers is one of the largest in history. It contains enormous amounts of information, much of which concerns the financial arrangements of powerful and famous people. Many of them are politicians, even national leaders. The response in the press, and from the publics of many countries, has been correspondingly outsized.
The Prime Minister of Iceland has stepped down; David Cameron, Britain’s Prime Minister, has faced a very difficult week indeed, including many awkward questions about his father’s financial dealings. Many other international figures have been caught up in the ensuing scandal. On Tuesday, 5th April 2016, the Prime Minister of Pakistan, Nawaz Sharif, addressed the nation to calm heightened anger over the Panama Papers’ leak. He tried to prove that his family is not involved in any financial corruption.
The Panama Papers exposed the fact that because of Democracy, rulers and powerful people throughout the world, whether they are from the West or East, whether they belong to the developed or underdeveloped world, transfer their wealth with ease to places where their wealth will not be taxed or scrutinized.
         In Democracy, people who are elected in the name of the people use their legislative authority to fulfil the interests of their masters, cronies and themselves. Democracy gives the right of legislation to the representatives of the people, so these representatives use this authority to declare a thing or an act Halaal (allowed) or Haraam (prohibited). Today a discussion is taking place throughout the world as to the need for legislation to compel the rulers to pay tax on their wealth, so that the common man can be relieved from tax burdens. However, one fundamental question that has been overlooked which is that how on earth will people who have been given the right to legislate, make laws against their own interests? Therefore whenever this sort of scandal surfaces, the ruling elite make more “stringent” laws or announce judicial commissions to calm public anger, but always leave loop-holes so that their interests remains unharmed in the long term. Moreover, Democracy allows the rulers to usurp the wealth of both the public and the state, through privatization. And Democracy makes this all possible and is clearly rule for the rich by the rich to get even richer. It is the nature of Democracy of the Capitalism./.
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