A Troublemaker’s Charter
Ten years ago George Monbiot published Captive State: the Corporate Takeover of Britain, written in the wake of the 1999 WTO protests. Its final chapter, ‘A Troublemaker’s Charter’ still resonates today, especially the paragraphs on taxation and the true nature of democracy. Make what you will of his concluding call to arms, no doubt influenced by the unrest witnessed on the streets of Seattle, but the book still provides ample food for thought:
“When aristocrats enjoyed inordinate power in Britain, they insisted that they were the only ones who had the wisdom and expertise needed to run the country. Today business people make the same claim. Governments as well as newspapers appear to have convinced themselves of this proposition, and it has led, among other interesting phenomena, to the curious spectacle of government seeking a mandate from the corporations. The flow of power prescribed by the democratic model has been reversed. Big business has become the leviathan of the third millennium, the monster before which our representatives feel obliged to prostrate themselves. The people we have appointed as guardians of our liberties have delivered us into its maw.
Global taxation measures - harmonising corporate taxes, preventing companies from shifting their money to tax havens, and levying a tariff on all international currency transactions - would forestall one of the world’s gravest impending problems: the erosion of the tax base as states offer ever more generous terms to the ultra-rich in order to attract their money. These would not be easy either to implement or enforce, not least because they would hand a formidable advantage to countries playing outside the rules. Whether we intervene or not, however, corporate tax will converge worldwide, but downwards, rather than upwards. It is possible to conceive of a system of sanctions against tax havens, rather like the sanctions imposed today upon countries seeking to protect their markets. Perhaps there should also be a worldwide cap on executive pay, tackling inequality by ensuring that managers and directors cannot be given more than a certain multiple - eight or ten perhaps - of the salary of the lowest paid member of their workforce, including sub-contractors. If bosses wanted to raise their wages, they would have to raise everyone else’s as well.
The corporations are powerful only because we have allowed them to be. In theory, it is we, not they, who mandate the state. But we have neglected our duty of citizenship, and they have taken advantage of our neglect to seize the reins of government. Their power is an artefact of our acquiescence.
Governments will reassert their control over corporations, in other words, only when people reassert their control over governments. If political participation could break the bars of totalitarian state communism, it can certainly force elected governments to hold corporations to account.
This will happen only through the peaceful mobilisation of millions of people in nations all over the world. Globalisation, in other words, must be matched with internationalism: campaigning, worldwide, for better means of government.
We have little power as consumers. Consumer democracy is an illusion, not least because some have more votes than others. Those with the most power in the market are disinclined to use it to change the system which has rewarded them so well.
There is no political system which, if we were only to embrace it, would solve all our problems. There is no utopia, no perfect state. Political arrival is the prerequisite of tyranny, as the architects of heaven always end up designing a hell. Rather, democracy is sustained not by the system which prescribes it, whatever that might be, but by the challenges to that system. A political system is only as good as the capacity of its critics to attack it. They are the people who enforce the checks and balances which prevent any faction - the corporations, the aristocracy, the armed forces, even, for that matter, trades unions or environment groups - from wielding excessive power.
Our strength, in other words, lies in our citizenship, in our ability to engage in democratic politics, to use exposure, enfranchisement and dissent to prise our representatives out of the arms of the powers they have embraced. We must, in other words, cause trouble. We must put the demo back into democracy.
Legitimate protest takes many forms, including parliamentary opposition, lobbying by constituents and pressure groups, campaigning journalism and adamantly non-violent direct action. It should not be confined to parliamentary politics or even to strictly legal channels. Parliament is incompletely representative. It tends to concentrate on the concerns of target voters and powerful institutions, rather than on those of the poor, the vulnerable or the unborn. Elections are blunt instruments, generally won or lost on a small number of issues: tax, for example, or the economy. They do not allow us to refine our demands. Their results can be fine-tuned only by means of more persistent political activity.
Troublemaking is the means by which both our dispossession and the laws enforcing it are challenged. It is a costly nuisance, a drain on public resources, an impediment to the smooth functioning of government. It is also the sole guarantor of liberty. It forces our representatives to listen to those they have failed to represent. It inoculates the political agenda with new ideas and new perspectives. Without it, political systems sclerotize and succumb to corruption. As the freed slave and anti-slavery campaigner Frederick Douglass wrote in 1857, ‘Those who profess to favour freedom and yet deprecate agitation, are men who want crops without ploughing up the ground. They want rain without thunder and lightning…Power concedes nothing without a demand. It never did and it never will.’”
The Artful (Tax) Dodgers
Tax dodgers? Those sneaky little so-and-so’s, fiddling their expense forms, trying to sneak a few extra quid into their pockets whilst the taxman has got his back turned? Or MPs, as they’re better known? Such misguided, dithering backbenchers have a lot to learn from the pros. Our right honourable representatives, along with the benefit scroungers Jeremy Kyle and his ilk have decided to declare war on, are rank amateurs compared to numerous multinational corporations, who have been busy turning tax dodging into an duplicitous art form. You can almost admire the sheer gall of it, so long as you’re capable of performing the mental gymnastics required to ignore the incalculable harm such tactics are now causing the vast majority of society. This article highlights just some of the ingenious tricks employed by our brave captains of industry, all whilst they steered the good ship Global Economy headlong into the rocks. And the scariest thing of all is that not a single law has been broken by any of the firms and people mentioned below - they have always kept a step ahead of government’s beleaguered efforts to close one legal tax loophole after another.
The weapons of deceit are many and varied. One such card played by many companies is to move their intellectual property - brand names, patents, know-how - into offshore accounts. In other words they are manoeuvring assets that don’t physically exist, but are something to which some kind of value can be attached. Corporations have invented ways of moving such ‘property’ into either tax havens or, more commonly, to other European countries not officially recognised as tax havens but have laws that render them as such in some respects, e.g. the Netherlands, Luxembourg, Switzerland. The Netherlands, for instance, levy no tax on royalties generated by the music industry. Fun fact of the day: Bono moved his band’s company ‘U2 Ltd’, set up to deal with royalty payments, to a finance house in Holland in 2006 after the Irish Government scrapped an artist income tax exemption scheme. Very Zen, Mr Hewson.
Corporations such as Wellcom have placed indefinable, ethereal entities such as ‘management foresight’ offshore, and were thus able to pay a royalty to themselves of around £200million a year. This was a fairly common trick conceived by auditors such as KPMG, and pioneered by the likes of notorious convicted fraudster Conrad Black. Another tactic is to place famous brand names in tax-haven subsidiaries which can then charge huge sums for their use, shrinking the apparent taxable UK profits. The ‘shell’ or scallop symbol of the Shell corporation is owned by a separate company (but still under the Shell umbrella) registered in low-tax Switzerland. They essentially pay themselves for their own logo, and avoid paying vast amounts of tax in this way. Other creative companies leave losses in the UK while piling profits into subsidiaries in tax havens. Banks and other financial institutions such as Morgan Stanley run their money back and forth through various outlets in the US and UK in order to avoid taxation.
For years bank profits have gone through the roof (and still do to this day), yet the tax recovered from such organisations has, in most cases, actually fallen. The Treasury should have been reaping the reward in terms of increased revenues, yet during most of the previous decade the proportion of tax paid by the top companies has decreased. An independent study revealed that around a third of FTSE 100 companies pay no net tax whatsoever, and another third pay a minute proportion of their profits. It’s pretty likely that the same people who concocted the web of debt devices that brought down many of the banks are also involved in calculating these tax avoidance strategies.
As journalist Polly Toynbee wrote last year, “The justification is that "everyone does it", and even that it is a company's moral duty to save shareholders from standard tax. But shareholders are also taxpayers who have to shoulder the extra burden…."Corporate social responsibility" becomes an oxymoron when top companies who avoid so much tax parade policy documents adorned with pictures of wind turbines, smiling black faces and laughing children labelled "sustainability", "diversity" and "community". Many do good charitable work; but what is the use of boasting that "We are a good corporate citizen" while going to grotesque lengths to push their tax responsibility on to the rest of the "community"? The way to prove they are the "good corporate citizen" they claim to be is by paying the modest 28% that is the starting rate for all companies. Maybe culture change won't happen until we get out there with saucepans to rattle and bang some shame into those inside corporate headquarters.”
But at least the government itself is keeping its hands clean whilst it chases these firms in vain, right? Wrong. It turns out the HMRC itself has sold off its own building, and now rents the offices from an offshore entity. In other words, the people in charge of collecting tax actually aid tax avoidance, by renting their own building. They’re all artful dodgers now.
See ya Jimmy
Yesterday saw the funeral of Scottish firebrand Jimmy Reid. He led the Upper Clyde Shipbuilders’ work-in of 1971, successfully thwarting Edward Heath’s government in their attempts to close the shipyards. Below are excerpts from the sensational speech he gave at his inauguration as rector of Glasgow University the following year. So sensational that it was reported upon by that well known left-wing pamphleteer, the New York Times, who deemed Reid's words and delivery as worthy of comparison with Lincoln’s Gettysburg address. Read on, and realise that this was a bad time indeed to lose old Jimmy...
‘Alienation is the precise and correctly applied word for describing the major social problem in Britain today. People feel alienated by society. In some intellectual circles it is treated almost as a new phenomenon. It has, however, been with us for years. What I believe is true is that today it is more widespread, more pervasive than ever before. Let me right at the outset define what I mean by alienation. It is the cry of men who feel themselves the victims of blind economic forces beyond their control. It’s the frustration of ordinary people excluded from the processes of decision-making. The feeling of despair and hopelessness that pervades people who feel with justification that they have no real say in shaping or determining their own destinies.
Many may not have rationalised it. May not even understand, may not be able to articulate it. But they feel it. It therefore conditions and colours their social attitudes. Alienation expresses itself in different ways in different people. It is to be found in what our courts often describe as the criminal antisocial behaviour of a section of the community. It is expressed by those young people who want to opt out of society, by drop-outs, the so-called maladjusted, those who seek to escape permanently from the reality of society through intoxicants and narcotics. Of course, it would be wrong to say it was the sole reason for these things. But it is a much greater factor in all of them than is generally recognised.
Society and its prevailing sense of values leads to another form of alienation. It alienates some from humanity. It partially de-humanises some people, makes them insensitive, ruthless in their handling of fellow human beings, self-centred and grasping. The irony is, they are often considered normal and well-adjusted. It is my sincere contention that anyone who can be totally adjusted to our society is in greater need of psychiatric analysis and treatment than anyone else.
It is easy and tempting to hate such people. However, it is wrong. They are as much products of society, and of a consequence of that society, human alienation, as the poor drop-out. They are losers. They have lost the essential elements of our common humanity. Man is a social being. Real fulfilment for any person lies in service to his fellow men and women.
[There is] widespread, implicit acceptance of the concept and term “the rat race”. The picture it conjures up is one where we are scurrying around scrambling for position, trampling on others, back-stabbing, all in pursuit of personal success. Even genuinely intended, friendly advice can sometimes take the form of someone saying to you, “Listen, you look after number one.”
Reject these attitudes. Reject the values and false morality that underlie these attitudes. A rat race is for rats. We’re not rats. We’re human beings. Reject the insidious pressures in society that would blunt your critical faculties to all that is happening around you, that would caution silence in the face of injustice lest you jeopardise your chances of promotion and self-advancement. This is how it starts, and before you know where you are, you’re a fully paid-up member of the rat-pack. The price is too high. It entails the loss of your dignity and human spirit. Or as Christ put it, “What doth it profit a man if he gain the whole world and suffer the loss of his soul?”
Profit is the sole criterion used by the establishment to evaluate economic activity. From the rat race to lame ducks. The vocabulary in vogue is a give-away. It’s more reminiscent of a human menagerie than human society. The power structures that have inevitably emerged from this approach threaten and undermine our hard-won democratic rights. The whole process is towards the centralisation and concentration of power in fewer and fewer hands. The facts are there for all who want to see. Giant monopoly companies and consortia dominate almost every branch of our economy. The men who wield effective control within these giants exercise a power over their fellow men which is frightening and is a negation of democracy.
From the Olympian heights of an executive suite, in an atmosphere where your success is judged by the extent to which you can maximise profits, the overwhelming tendency must be to see people as units of production, as indices in your accountants’ books. To appreciate fully the inhumanity of this situation, you have to see the hurt and despair in the eyes of a man suddenly told he is redundant, without provision made for suitable alternative employment…Someone, somewhere has decided he is unwanted, unneeded, and is to be thrown on the industrial scrap heap. From the very depth of my being, I challenge the right of any man or any group of men, in business or in government, to tell a fellow human being that he or she is expendable.
The concentration of power in the economic field is matched by the centralisation of decision-making in the political institutions of society. The power of Parliament has undoubtedly been eroded over past decades, with more and more authority being invested in the Executive. The power of local authorities has been and is being systematically undermined. The only justification I can see for local government is as a counter- balance to the centralised character of national government.
To measure social progress purely by material advance is not enough. Our aim must be the enrichment of the whole quality of life. It requires a social and cultural, or if you wish, a spiritual transformation of our country. A necessary part of this must be the restructuring of the institutions of government and, where necessary, the evolution of additional structures so as to involve the people in the decision-making processes of our society. The so-called experts will tell you that this would be cumbersome or marginally inefficient. I am prepared to sacrifice a margin of efficiency for the value of the people’s participation.
To unleash the latent potential of our people requires that we give them responsibility…I am convinced that the great mass of our people go through life without even a glimmer of what they could have contributed to their fellow human beings. This is a personal tragedy. It’s a social crime. The flowering of each individual’s personality and talents is the pre-condition for everyone’s development.
In this context education has a vital role to play. If automation and technology is accompanied as it must be with full employment, then the leisure time available to man will be enormously increased. If that is so, then our whole concept of education must change. The whole object must be to equip and educate people for life, not solely for work or a profession. The creative use of leisure, in communion with and in service to our fellow human beings, can and must become an important element in self-fulfilment.
My conclusion is to re-affirm what I hope and certainly intend to be the spirit permeating this address. It’s an affirmation of faith in humanity. All that is good in man’s heritage involves recognition of our common humanity, an unashamed acknowledgement that man is good by nature…I would like to think that our generation took mankind some way along the road towards this goal. It’s a goal worth fighting for.’