Our reaction to leaks like the Paradise Papers will determine the type of society we want to live in – particularly as the inequality gap widens.
Revelations like the Paradise Papers don’t generate as much public interest as they really should. The huge cache of documents, leaked from law firm Appleby and corporate services provider Estera, reveal the many and murky ways that the global elite systematically avoid tax.
And it’s truly the elite, in every sense of the word. Tory grandee Jacob Rees-Mogg; industrialist billionaire and Trump confidante Robert Kraft; multinational conglomerates Apple, Nike and Glencore; Oxford and Cambridge Universities and the British royal family are just some of the parties named in the papers.
The revelations aren’t surprising – it’s long been known that the rich and powerful stash their money in offshore havens to avoid tax. What’s more significant is the wider context for the world, and what the revelations say about the collective future we face.
Global inequality has reached such obscene levels that the social fabric isn’t just fraying; it’s starting to tear. The recent UBS/PwC Billionaires report found that billionaires increased their combined global wealth by almost a fifth last year to a record $6tn (£4.5tn) – more than twice the GDP of the UK. Apparently the world’s super-rich now hold the greatest concentration of wealth since the US Gilded Age at the turn of the 20th century (as The Guardian framed it).
The inequality gap grows ever wider, with 71% of the world’s population owning just 3% of its wealth. Yet we don’t really need statistics to tell us how gaping the disparity is. We can feel it on a daily basis, as living standards worsen and financial security seems evermore out of reach for those at the lower end of society. We see it in the rising number of homeless people on the streets.
The Paradise Papers reveals the system at the heart of this destructive inequality. Globalised capitalism, neoliberal economics – call it what you want. In practice it simply means that the elite operates according to a different set of rules to the rest of us. Multinational corporations and the super-rich avoid tax because they’re able to. They have the money and the connections to access the loopholes that are out of reach for everybody else.
Divisions deepen as the rich get richer and the poor get poorer – only now we’re reaching fever pitch. As Josef Stadler, lead author of the UBS/PwC report, said: “The problem is the power of interest on interest – that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?”
It’s an interesting question, yet the relatively muted public response to the Paradise Papers puts doubts in my mind as to whether there will truly be a great people’s revolt. There was a high degree of publicity around the story, and awkward questions for certain parties to answer, but a week on from the story breaking and it already feels as though next to no meaningful action will be taken.
The establishment isn’t going to reform itself. Too many members of the political class themselves have vested interests in offshore companies. Even if they didn’t, the global system for tax avoidance is so deliberately complex as to be nigh-on impossible to dismantle from above. What’s needed is a popular movement for change that puts pressure on individual parties who avoid tax and makes the moral case for a system where everyone pays their fair share.
But this seems like a pipedream when so many people are bored or disengaged with a story like the Paradise Papers, with its reams of data and discussion of opaque financial machinations. At other times it feels as though certain members of the elite are given a pass for tax avoidance because we, as consumers, like what they do. Tech businesses upon which we are hugely reliant, such as Apple and Google, are obvious examples.
There’s a ‘born to be ruled’ mentality at play too – an implicit acceptance that certain members of the elite can act with impunity because they are our betters and somehow deserve the benefit of getting ever-richer while the plebs suffer. The most obvious example is the monarchy, which is named in the Paradise Papers due to the private estates of both the Queen and Prince Charles having invested offshore.
It should, in theory, be a huge scandal if the monarchy is avoiding tax it ought to be contributing to the nation. Yet it’s only a scandal if enough people feel outraged. They don’t. Significantly more people continue to think about the monarchy as an untouchable cultural icon with venerated traditions, ceremonies and celebrities.
If inequality really is reaching unsustainable levels then something has to give… or perhaps not. When it comes to the crunch, the question will be do enough people care about challenging the inequality gap over and above the products, personalities and established hierarchies that have been sold to them their entire lives?
If the answer is no, the future will likely see those at the top of society lead evermore gilded existences. Those at the bottom, meanwhile, will be left to fight with increasing ferocity for the scraps that are left.