Capitalism. The word we all love to hate. It’s a word that’s seeing a lot of traction these days in the media, due to latest financial scandal. This scandal is the Panama Papers.
The Panama Papers are an enormous cache of documents from Mossack Fonesca, reputed to be the world’s fourth-largest offshore law firm. These documents reportedly show how many of world’s wealthiest politician’s, their families and associates, are hiding vast sums of wealth using a variety of means. These papers were leaked by an anonymous source to a German newspaper, Sueddeutsche Zeitung, which has shared them with the International Consortium of Journalists, the BBC and the Guardian.
The figures being named include Vladimir Putin, Jackie Chan, David Cameron, and the now former PM of Iceland, Sigmundur Davíð Gunnlaugsson, who has just resigned after large protests forced him from office.
As with the 2008 financial crisis, critics have carped that this is the fault of capitalism: the Papers purport to show the immense inequities and failures of global capitalist systems. The Socialist Worker, a ragged leftover of Ing-Soc, gleefully says that the Papers, “shows how capitalism works – we need to get rid of it.” The Atlantic speaks in ominous terms of, “a murky world of secret offshore bank accounts and companies, which world leaders, politicians, celebrities, and sports stars used to conceal and shuffle millions of dollars.”
It is suspicious that the names being revealed are those of people who don’t live in Western nations. The money is being hidden in the British Virgin Islands, Panama, the Bahamas, the Seychelles, and other places known for their banking. A small sample of the owners shows a large proportion of them are in Russia, China, and Hong Kong. The Chinese premier’s brother-in-law has been named in the Papers, as has international move star Jackie Chan.
Why would these men, or the associates of Putin, want to move money from their own nation to others? The media isn’t saying, or even asking the question.
The most prominent names appearing in the Papers have not been those of Mark Zuckerberg, George Soros, or Miley Cyrus. These people, all quite wealthy, have no reason to hide their money in overseas accounts or offshore investments. Why? Because they live in the United States, where–for the most part–property is protected by the Constitution and other law.
So how should we understand this scandal, which seems poised to shake the capitalist world order? We should start by not being deceived.
As is common in journalism, a certain narrative is being taken for granted with reporting on the Panama Papers. The narrative, in this case, is roughly as follows: greedy capitalist elites, unregulated by government, have taken the wealth of nations, evaded rightful taxation, and hidden it by using a firm of slimy lawyers to store it all over the world.
On the surface, this narrative appears correct. But find out what’s really happened, we need to look deeper and find the things we don’t yet see.
Be sure to watch TCC for part two of Christopher McDonald’s report.