While the wealthy evade billions
in taxes, ordinary citizens continue to bear the burden of budget cuts.
Meanwhile, those who resist are punished for it.
“What is rewarded above is punished below … Profits are privatized, losses are socialized.”~ Eduardo Galeano
Upside Down: A Primer for the Looking-Glass World (2001)
This week it was revealed
that HSBC — Europe’s biggest bank — has been actively running and
propagating a massive tax evasion scheme through its Swiss subsidiary,
allowing some of its wealthiest international clients to hide over
$120bn in undeclared assets in 30.000 secret Swiss bank accounts.
Leading British regulators, MPs and government officials were aware of
the malpractices and the names of potential tax evaders (including movie
stars, drug lords and heads of state), but never pressed criminal
charges.
Instead, the UK — like the
rest of Europe — ushered in an age of austerity. Where the billions of
the rich escaped to Switzerland and the Caymans, the benefits of the
poor were cut “to balance the budget.” Last year, David Cameron pledged
to slash “wasteful” public spending for another decade, as it “comes out
of the pockets of the same taxpayers whose living standards we want to
see improve.” The irony of the Prime Minister speaking from a golden throne was hardly lost on anyone.
Welcome to the topsy-turvy reality of austerity politics.
As
for HSBC, of course the diligent observer will not have been very
surprised by the news of the bank’s umpteenth mega-scandal. Already back
in 2012, financial journalist Matt Taibbi made it clear
that HSBC had been engaged in “more or less the worst behavior that any
bank can possibly be guilty of.” So far, the bank has managed to avoid
prosecution despite laundering billions of dollars for some of the most notorious Mexican drug cartels as well as a Saudi bank linked to Al Qaeda, and systematically rigging interbank interest rates and reaping lavish profits in the infamous LIBOR scandal.
The
decision of US and UK regulators to reach deferred prosecution
agreements with HSBC and not to press criminal charges in these scandals
signals the double standards at the heart of our contemporary justice
systems. In the US, where more than half
of the prison population is doing time for minor drug offenses, the
white collar criminals who aid and abet the violent traffickers of these
same drugs get off with a slap on the wrist. As Taibbi puts it, “for
the crimes [HSBC] committed, getting away with just [a fine] — and it’s
not even their money, it’s the shareholders’ money — it literally is a
get out of jail free card.”
Yet it is
very important not to let the criminal behavior of a single bank
distract us from the bigger picture. HSBC is but one notoriously
scandalous player in a financial system that is dominated by some of the
most criminal organizations of our times. Focusing our wrath on
individual acts of misbehavior risks missing a deeper dimension. While
it is the illegal practices that mostly hit the headlines and cause
indignation, the real theft still occurs within the bounds of the law —
in the everyday transactions and ordinary financial operations at the
heart of these banks’ business models.
In this sense, the greatest scandal of our times is systemic in
nature and rests upon the wholesale transformation of the world economy
over the past four decades. With the onset of financialization in the
1970s, the international banking system began to act like Galeano’s
magnifying glass: grossly amplifying pre-existing inequalities and
inverting reality in the process. In the first instance, the system
sucks up billions in interest and tax money from below. Starting with
the bankruptcy of New York City in 1975 and the Mexican debt crisis of
1982, austerity became the key mechanism whereby the banks effected a
historically unprecedented redistribution of resources from the bottom
to the top.
At the other end, the
magnifying glass created the preconditions under which the world’s
wealthiest businesspeople, Third World dictators and white-collar
criminals could further increase their accumulated capital — obtained
through decades’ worth in pillage and plunder of state resources and
common property — and stuff it in offshore bank accounts and foreign
assets, where this immense stolen wealth largely escapes taxation,
regulation and criminal investigation.
The financial privileges obtained through this process, which has been referred to by David Harvey as “accumulation by dispossession,”
stand in direct relation to the fiscal deprivation at the bottom.
Ultimately, major scandals like HSBC’s Swiss tax evasion scheme are
merely flash points offering us a clearer view of the hidden dynamics at
work in the world economy: what is taken from one side shows up at the
other. In a word, there is no such thing as austerity; there is only an
outrageously skewed redistribution of resources. In this upside-down
world of financial capitalism, money doesn’t trickle down — it steadily
flows upwards.
The result is a stable
set of outcomes in which profits are perennially privatized and losses
are systematically socialized. Those who question this state of affairs
are told that “there is no alternative,” and those who actively resist —
like the social movements and progressive governments in Latin America
and Southern Europe — are ruthlessly punished for it. First the cops
will beat ordinary citizens over the head when they protest, then
investors will beat popular governments over the head when they do the
same. Foreign capital is withdrawn, bond yields spike up, stock markets
collapse. Where the bankers above are rewarded for criminal behaviour,
those who struggle for justice from below find themselves imprisoned
within the narrowing perimeters of the permissible.
from here
Much as we can agree with the main thrust of this argument we must, once again, point out clearly that the 'systemic injustice' written about here is the capitalist system and also point out that it is working as it should, as it is meant to do - for capitalists. That's why we say over and again that the answer is the abolition of capitalism in favour of socialism, a system organised by the people, for the people, with respect for the well being of the planet in everyone's interest.
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