Wednesday, March 20, 2013

Wealth Limited

"You can spend the money on new housing for poor people and the homeless, or you can spend it on a football stadium or a golf course" - Jello Biafra

As any parent or teacher will tell children, rules (laws) are essential to any system. It is an obvious tenet that if one person feels free to break the rules, a precedent is set and others will inevitably do the same, leading to erosion of the rule of law and eventual instability, injustice and chaos. In our modern 'global society' (propaganda term alert!), where law-breaking by those who hold the most power is rife, a two-tier system of justice has come into existence; namely one rule for 'us', another for 'them'.

This is nothing new as the rich and powerful have always enjoyed relative immunity from the law but rarely throughout history and only in the most despicable dictatorships has it been as blatant and brazen as it is now, an ominous sign that the global super-rich elite know they no longer have anything to fear. In the bad old days they were forced to at least try to hide their mendacity and criminality.

Witness the European 'Troika', the committee led by the European Commission, the European Central Bank and the International Monetary Fund along with their pet politicians (Merkel and her ilk), try to force the government of Cyprus to skim off the savings of ordinary, hard-working people in order to raise funds for the propping up of two crippled national banks.

Actions like this - along with countless other outrages perpetrated by financial and political elites - are carried out with only the interests of the rich and powerful in mind, and only indifference for the ranks of ordinary citizens you and I belong to.

Democracy is now a word without meaning, a useful construct for career politicians when spouting platitudes at press conferences. Beppe Grillo (warning: strong language) has a point, don't you think?

There is a very clear lesson here: under the dominant neoliberal economic model pursued in recent decades, unlimited wealth for some is not only possible but inevitable. It follows logically therefore that inequality, and all the social ills that accompany it, is also inevitable. It further follows that without being checked, this inequality will widen until societies are torn apart, Greece being a vivid example of what awaits the other economies of the 'developed' world.

The concept of a minimum wage is well known. Given that we have established that inequality is inevitable and that it can destroy whole societies, a maximum wage and, far more crucially, a maximum limit on wealth must be considered.

A 2010 study by Princeton University's Woodrow Wilson School showed that general happiness is indeed connected to income, but that after a certain level is reached, $75,000 a year at that time, happiness no longer increases.

Annual salary, however, is not the issue. A 2012 study by the Tax Justice Network estimated that the extremely wealthy are hoarding around $21 trillion in tax havens like the Cayman Islands.

That is the issue.

From the article:

The detailed analysis in the report, compiled using data from a range of sources, including the Bank of International Settlements and the International Monetary Fund, suggests that for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world.

Oil-rich states with an internationally mobile elite have been especially prone to watching their wealth disappear into offshore bank accounts instead of being invested at home, the research suggests. Once the returns on investing the hidden assets is included, almost £500bn has left Russia since the early 1990s when its economy was opened up. Saudi Arabia has seen £197bn flood out since the mid-1970s, and Nigeria £196bn.

"The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments."


The sheer size of the cash pile sitting out of reach of tax authorities is so great that it suggests standard measures of inequality radically underestimate the true gap between rich and poor. According to Henry's calculations, £6.3tn of assets is owned by only 92,000 people, or 0.001% of the world's population – a tiny class of the mega-rich who have more in common with each other than those at the bottom of the income scale in their own societies.

"These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people," said John Christensen of the Tax Justice Network. "People on the street have no illusions about how unfair the situation has become."


There is no doubt that there are many issues to resolve with regard to the concept of maximum wealth. How does one deal with cash in the bank as opposed to other assets like land or investments. How much does a person really need? What limit would be reasonable? One suggestion, for example, is the level at which it is possible to survive on interest alone.

This is a very different suggestion to what is currently occurring in Cyprus. The target ought to be exclusively the super-rich global elite and multinationals who have exploited loopholes in tax laws and squirreled away enormous quantities of the wealth of resource-rich nations under their control.

These mega-rich entities are running riot with a system designed for an age long gone; antique tax laws are simply unable to cope with complex global transactions. Banking secrecy is also a major issue in nations like Switzerland as transparency is the first step toward having fair distribution of wealth, namely tax justice. The $21 trillion (a conservative estimate) could easily end world poverty, fund a global green infrastructure, or provide free health and education to any who need it. We are talking about significantly aiding literally billions of human beings. Allowing this money to sit in a bank somewhere so a rich guy can watch his Forbes List rank improve is not only obscene - it is insane.

Naturally, the very suggestion of any limit on wealth would be greeted with ridicule and derision from establishment politicians and their enablers in the corporate media, and there is a very good reason for this: such an idea would fundamentally threaten their control over the world's resources and finances. We can not, therefore, expect anything to change under the status quo...under our fake democracies.

There is a way, however: direct democracy. This is a perfectly viable system of government that gives people at least the power of veto over the actions of their officials. It is not 'mob rule', as many mistakenly believe. Beppe Grillo's Five Star Movement (M5S) in Italy last month won 25% of the national vote for the simple reason that Italians are sick to death of lying, corrupt suits lining their pockets and looking out for themselves while pretending to care about the welfare of the people. Grillo has offered them an alternative - direct democracy - and millions have decided they want to give it a try.

This movement is not confined to Italy. Other nations, particularly those like Spain most deeply affected by the economic crises directly brought about by corrupt banks and politicians, are also embracing the concept. The movement is still growing and needs more activists to spread the word. Find out about it and get involved: be a part of something that truly has the power to bring about positive change. A limit on wealth is just one of thousands of possibilities under this revolutionary system of government.

'The 99.99998271% - Why the Time is Right for Direct Democracy' by Simon Wood is available for free download. In this 70-page book, the current state of human rights and democracy is discussed, and a simple method of implementing direct democracy is suggested.
Find Simon Wood on twitter (@simonwood11) and Facebook or at his blog. The Direct Democracy Alliance, a voluntary group dedicated to creating national/global direct democracy, is now also on twitter: (@DDA4586). He can be contacted at swooddda@gmail.com


Author's note: For a year now I have been writing detailed articles on human rights and direct democracy, and have written a book on the topic which is freely available. However, despite some small successes, I am yet to make a scratch in any meaningful way that will bring about real change. For this to happen, I need to create an NPO or similar organization devoted to creating and promoting direct democracy. I therefore appeal to any reader who has significant resources, or who has connections to someone who has, to contact me with regard to making a philanthropic donation to bring about a transparent organization with paid, professional staff which can actually make a difference.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.