Super Rich View Poor as Mere Collateral Casualties


"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage," John Kenneth Galbraith wrote in 1977.
Both the British and German treasuries have struck deals this month with the Swiss government to tax their citizens' hidden accounts in Switzerland's globally harmful banking system.

However, the identities of these account holders will not be disclosed, allowing Swiss bankers to maintain their bizarre boasts of "privacy" and "confidentiality."

The agreement with Germany sees the latter accepting a paltry $2.8 billion from the Swiss banks said to be holding an estimated $276 billion of Germans' undeclared wealth.

The Swiss authorities will in future tax Germans at the rate of 26 percent on their interest from their accounts and hand that money over to the German government. Similarly with U.K. citizens.

The vast majority of nations whose public wealth is siphoned off to tax havens by their political masters, drug barons and business elites have no such bargaining powers.

The Tax Justice Network and Christian Aid have been advocating for years an end to banking secrecy in offshore tax havens, such as Switzerland, Lichtenstein, Cayman Islands and Bahamas.

The unilateral German and British actions have undermined that painstaking work. The Tax Justice Network estimates assets held offshore total $11.5 trillion, which if taxed could yield revenues in excess of $225 billion.

But leave aside taxation; these havens are vast pools of illicit funds and make the fight against corruption, money-laundering and international crime so much harder.

We are treated to the spectacle of European and American governments thrown into a panic over their budget deficits and taking out their fears on their citizens who are least responsible for the problem: the urban poor and the lower middle-classes who are being subjected to crippling cuts in health care, education and the provision of public services.

The super-rich are allowed to get away with tax evasion on a gigantic scale; and immediately cry "foul" if the rulers whose palms they grease even suggest a rise in taxes. (Warren Buffet is a rare exception to this rule!).

I am often reminded of the late John Kenneth Galbraith's memorable words, written back in 1977:

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich. So it was in the Ancien Regime when reform from the top became impossible, revolution from the bottom became inevitable."

How refreshing to turn to Professor Zgymunt Bauman's recent book, suggestively titled "Collateral Damage: Social Inequalities in a Global Age."

Bauman is one of the most original and insightful social thinkers of our time. Even at the age of 85, his output is prolific and his prose still clear, trenchant and thought-provoking.

He lives in his retirement near Bradford, a city in the north of England that has repeatedly witnessed bouts of rioting and inter-ethnic violence.

Writing well before the most recent spate of riots in London and other English cities, Bauman notes that in Bradford 40 percent of youngsters live in families without a single person who has a regular job, and one in 10 young people already have police records.

Such a statistical correlation, he points out, "does not in itself justify the reclassification of poverty as a criminal problem; if anything, it underlines the need to treat juvenile delinquency as a social problem."

(Prime Minister David Cameron and others of the ruling class in Britain were quick to label the recent acts of arson and looting as a "law-and-order problem," as if this settled the matter.)

For Bauman, there are social roots that lie "in a combination of the consumerist life philosophy propagated and instilled under the pressure of a consumer-oriented economy and politics, the fast shrinking of life-chances available to the poor, and the absence for a steadily widening segment of the population of realistic prospects of escaping poverty in a way that is socially approved and assured."

The term "collateral damage" has recently been added to the vocabulary of military forces to refer to the unplanned, unintended (but not necessarily, unanticipated) effects of armed interventions, effects that are damaging, harmful and costly in human terms.

Many military commanders retrospectively exonerate themselves by saying that while such risks were noted they were worth taking, because one "cannot make an omelet without breaking eggs."

What is glossed over in such accounts is someone's usurped power to decide which are the eggs to be broken and who gets to savor the omelet (certainly not the broken eggs).

Thinking in terms of collateral damage tacitly assumes an already existing inequality in people's rights and life chances. The situation of youth in Bradford, Bauman suggests, "is a collateral casualty of profit-driven, uncoordinated and uncontrolled globalization."

The richest 10 percent of adults worldwide own 85 percent of global household wealth, with the richest 2 percent among them capturing more than half that wealth.

London is the most unequal city in the world. The financial brokers, hedge fund managers and corporate Fat Cats routinely pilfer and pillage on a scale that dwarfs whatever happened recently in English cities.

But they are never hauled before magistrates' courts for summary sentencing. Nor are they even publicly rebuked. Until, of course, like a certain media tycoon, they fall out of favor with their political cronies.

Vinoth Ramachandra is secretary for dialogue and social engagement for the International Fellowship of Evangelical Students. He lives in Sri Lanka. A version of this column first appeared on his blog.

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Tags: Inequality, Poor, Poverty, Super Rich, Tax Havens, Taxes, Vinoth Ramachandra


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