Mainstream media has been making a massive deal about the Panama Papers, and it is working overtime to impress upon us that this is a “revelation.” It is no such thing. As the bosses of the international media well know (largely because they too are in on it), we’ve known about this for a long time. All that the publication of the Mossack Fonseca documents have succeeded in doing is giving us proof that it’s going on. In all fairness anyone with a few thousand euros can open up their own offshore shell account. It’s no big deal. Anyone can do this legally because the loophole was created to facilitate the real big deal – the massive tax avoidance of the super-rich.
Offshore accounts in tax havens around the world are all about avoiding tax legally. When we do that sort of thing here it’s no longer called “tax avoidance;” it becomes “tax evasion” and it gets people put behind bars. For the most part this is a legal fiction, because the rich and powerful write the laws they get to say who can keep their money tax free and who can’t. Obviously they can. So much money being sucked out of national economies causes immeasurable damage; with less cash in the state coffers there is less with which to provide public necessities like healthcare and education.
Oddly enough these international financial sinkholes don’t exist only for the purposes of dodging the taxman. They were created as part of a wider process of financialisation by which those at the pinnacle of the global wealthy élite safeguard their war chests – and they are war chests, because this is the near limitless supply (estimated to be in the hundreds of trillions of dollars) that is used to persuade nation states to bend the knee to the march of neoliberalism. In the United States alone the owners of this wealth buy and fund politicians and political campaigns, and donate money to the breaking of organised labour and the undergirding of the neoliberalist project of slashing public spending, deregulation, and cutting tax to the corporations.
All of this happens because it has to happen. This astronomical wealth didn’t appear out of nowhere, it was accumulated as a result of the neoliberal project, and this has given its beneficiaries – people like the Koch brothers in the US – unimaginable power and influence over governments. Their undemocratic power, however, depends on their ability to continually accumulate money and maintain their wealth, and it is for this reason that this is the way things have to be. Elected heads of state who resist – few as they are – quickly find the wheels of media acting against them. If this doesn’t work they discover, as has happened before, this global élite has the power to fund wars. The present world economic system – the “free market” – is finely engineered to keep these people rich and in power.