Polly Toynbee in The Guardian
The prime minister has opened the floodgates, dragging the chancellor after him. Whatever David Cameron says, his example means all MPs will soon publish their tax returns: how dare any refuse? Feeding frenzies against politicians are not a pretty sight.
It’s a curious phenomenon that democracy is hailed as the highest human endeavour, yet its practitioners are always held in public contempt. “Elites” everywhere are in the pillory, but none more than the “elite” we elect and then despise.
Why single out politicians? The Times quotes a Conservative MP saying this will inevitably extend to “all those in public life” asking, “Where does it stop? BBC journalists, councillors, judges?” Indeed, there is no clear line between public and private people. Donors to political parties, journalists certainly, anyone in public office or with a public contract – and their partners too. There is no stopping these dominoes. Cameron in the Commons said he was against public officials having to publish tax returns, but he has broken the secrecy spell, and transparency always leads to demands for more.
Money is not a private matter. It may be almost as exciting as sex but exposing private wealth is not like publishing rude photos from private bedrooms. Who has what and from where is public because everyone must pay tax on it, even if a depleted HMRC can scrutinise very little. On death, light shines in as wills are published, but real transparency would make everyone’s tax return a public document.
The social shock would be seismic. At first people would feel as naked as if their clothes were stripped off in front of neighbours and work colleagues. Why else was Cameron so shy about revealing the scale of his wealth? He had done nothing unusual for families of his kind: it was the graphic exposure of his hundreds of thousands that made him blush. Why? Because people with inherited money know it’s not fair, they didn’t earn it and they are just lucky winners in life’s lottery.
The Daily Mail delivered a mighty full-page blast of anger against any questioning of Osborne’s £1m inheritance tax gift, which will cost the exchequer £5.8bn. Misleading as ever, they write of “most people”, and Downing Street talks of “millions of ordinary people” doing “proper tax planning” for inheritance. Yet as it is, only the super-rich pay inheritance tax, just one in 20 estates. Forget the seven-year rule, abolish this tax and instead tax recipients for all gifts they receive above a threshold over their lifetime.
The Mail warns that all this embarrassing exposure means “people with private means will no longer wish to go into public life, putting their advantages at the service of the less fortunate”. But that’s just it, these leaders with private means have harried the “less fortunate” mercilessly. They inflict billions of cuts on the poorest – in bedroom tax, benefit cap, child benefit freeze, two-child limit, and ruthless disability fit-for-work tests – while sanctions drive many into food bank destitution. The “less fortunate” may not be grateful to those with private means who rule over them. No wonder Cameron blanches at revealing his all.
Sheltering wealth, the right calls any protest against inequality “the politics of envy”. Most families still haven’t regained their pre-financial crash incomes, yet anyone with high-value property watches their assets inflate into the stratosphere. When unearned income such as Cameron’s soars but wages lag behind, anger at untaxed riches is inevitable.
Polls show people make a sharp distinction between genuine “wealth creators”, such as self-made entrepreneurs or superstars, and the trustafarians and rent-seekers who are enriched for no discernible merit. Resentment is often channelled into cynicism and sour trolling, not into political action. Will this start to change?
In Scandinavian countries, total tax transparency has helped create societies far more equal than ours. At the click of a mouse in Norway, people can find out what others own and earn, and everyone knows where they stand. Transparency stops women being paid less than men. Transparency makes employers more likely to pay themselves and their staff fairly. The culture of openness breathes an implicit belief in social justice.
But here, research from the London School of Economics’ professor John Hills shows how clueless most people are about the earnings of others, wildly underestimating British inequality. Both rich and poor delude themselves that they are far nearer the middle than they are. They know people who are better off and worse off, wrongly concluding themselves to be middling.
In my book Hard Work, I ran focus groups of the super-rich who refused to believe how much richer they were than the rest. Those with yachts envy those with a yacht and a crew, so they never feel truly rich. With the decline of unions, pay secrecy allows employers to divide and rule in the dark.
The disinfectant of sunlight makes shifty dealings and criminality much less likely, so it’s time for us to turn Norwegian. Don’t let’s strip public figures naked one by one, but let’s open the window and have every citizen’s tax return exposed. Tax works when everyone knows everyone else pays it too: I-will-if-you-will transparency is the same, all jumping in with one big splash, everyone’s income and wealth revealed together.
But don’t let gossipy obsession with personal wealth and inheritance distract from the main issue revealed in the Panama Papers. The prime task is to sweep away secrecy that allows our flotilla of tax havens to hide the world’s wealth from taxmen.
Cameron announces new rules obliging havens to answer HMRC requests for information on the beneficial owner of a company within an hour. But that’s bogus transparency, depending on occasional official requests. Tax experts say all beneficial ownership must be published openly so any investigator can check who owns what any time.
In the same way, all dealings between HMRC and companies must be published, so we can see how Google, Amazon, Facebook and myriad others escape paying what they owe. After deep cuts, HMRC needs assistance from the prying eyes of journalists, the public, company competitors and anyone who might investigate mega-avoiders.
Today Cameron’s promise fell far short of that genuine transparency. He needs to get tough with the treasure islands and follow Charles de Gaulle’s example. When Monaco refused a tax measure he requested, he forced them to surrender by surrounding the kingdom with soldiers and turning off their water supply.
Tuesday, 12 April 2016
Three cars with explosives seized near Puttingal temple
IGNATIUS PEREIRA in The Hindu
Two of the cars had registration numbers of Kollam district and one of Thiruvananthapuram district, say police.
Police said the cars, found parked in a suspicious manner, came to their attention on Sunday night after some nearby residents made complaints.
A day after the temple tragedy, in which the death toll rose to 109, three cars laden with explosives were seized by the police about 500 metres away from the Puttingal Devi temple at Paravur on Monday.
City Police Commissioner P. Prakash said the cars, found parked near the temple, came to the notice of the local people late on Sunday. They alerted the police. On Monday morning, the police cordoned off the area and examined the cars, which were found packed with explosives, some of which were of high intensity.
Since the State police did not have the expertise to defuse them, the task has been assigned to experts of the Petroleum and Explosives Safety Organisation camping at Paravur for the investigation into Sunday’s explosions. Mr. Prakash said two of the cars carried Kollam registration numbers and one Thiruvananthapuram. Their ownership was being verified with the Transport Department.
Meanwhile, three more persons succumbed to burns on Monday. Among the dead, 14 bodies are yet to be identified.
A total of 879 people were injured and 305 of them were under treatment in various hospitals, an official statement issued by the office of the Health Minister said. There are 61 persons being treated at the Thiruvananthapuram Medical College Hospital (MCH), 30 at Kollam District Hospital and the rest in various private sector hospitals in both districts. Union Minister for Health J.P. Nadda visited the MCH on Monday and reviewed the facilities there.
The highest number of deaths, 59, was at the Kollam District Hospital.Meanwhile, the Crime Branch CID, which took over the investigation from the Paravur police, has registered cases against six persons. Among those listed in the case are four members of the Puttingal Devi Temple Devaswom Committee, fireworks contractor Varkala Krishnankutty, who is in a critical condition after suffering burns, and Kazhakuttam Surendran. Five of the accused are absconding.
They have been charged under Sections 304 (culpable homicide not amounting to murder ) and 188 (disobedience to order duly promulgated by public servant) of the Indian Penal Code and Section 3 of the Explosives Act (unlawfully and maliciously causing explosion that endangers life and property).
(With inputs from C. Maya)
Two of the cars had registration numbers of Kollam district and one of Thiruvananthapuram district, say police.
Police said the cars, found parked in a suspicious manner, came to their attention on Sunday night after some nearby residents made complaints.
A day after the temple tragedy, in which the death toll rose to 109, three cars laden with explosives were seized by the police about 500 metres away from the Puttingal Devi temple at Paravur on Monday.
City Police Commissioner P. Prakash said the cars, found parked near the temple, came to the notice of the local people late on Sunday. They alerted the police. On Monday morning, the police cordoned off the area and examined the cars, which were found packed with explosives, some of which were of high intensity.
Since the State police did not have the expertise to defuse them, the task has been assigned to experts of the Petroleum and Explosives Safety Organisation camping at Paravur for the investigation into Sunday’s explosions. Mr. Prakash said two of the cars carried Kollam registration numbers and one Thiruvananthapuram. Their ownership was being verified with the Transport Department.
Meanwhile, three more persons succumbed to burns on Monday. Among the dead, 14 bodies are yet to be identified.
A total of 879 people were injured and 305 of them were under treatment in various hospitals, an official statement issued by the office of the Health Minister said. There are 61 persons being treated at the Thiruvananthapuram Medical College Hospital (MCH), 30 at Kollam District Hospital and the rest in various private sector hospitals in both districts. Union Minister for Health J.P. Nadda visited the MCH on Monday and reviewed the facilities there.
The highest number of deaths, 59, was at the Kollam District Hospital.Meanwhile, the Crime Branch CID, which took over the investigation from the Paravur police, has registered cases against six persons. Among those listed in the case are four members of the Puttingal Devi Temple Devaswom Committee, fireworks contractor Varkala Krishnankutty, who is in a critical condition after suffering burns, and Kazhakuttam Surendran. Five of the accused are absconding.
They have been charged under Sections 304 (culpable homicide not amounting to murder ) and 188 (disobedience to order duly promulgated by public servant) of the Indian Penal Code and Section 3 of the Explosives Act (unlawfully and maliciously causing explosion that endangers life and property).
(With inputs from C. Maya)
Monday, 11 April 2016
Even Amazon will be swallowed up by the free market – and there's nothing Jeff Bezos can do about it
Even the most successful companies are merely small boats bobbing on the surface of a great and treacherous ocean
Ben Chu in The Independent
Ben Chu in The Independent
“The Everything Store” sounds like a pretty brutal place to work. An in-depth report by the New York Times on Amazon last year exposed a culture of borderline harassment from line managers, stupidly long hours, vicious evaluation sessions, a high staff turnover rate and a cult-like atmosphere personally imposed by the internet firm’s founder Jeff Bezos.
“Purposeful Darwinism” was one word used to describe the Amazon culture by a human resources director. Amazon contested the bleak picture painted by the report. And yet Amazon’s boss Jeff Bezos sounds like he’s rather pleased with it.
“People self-select” he wrote in his letter to shareholders last week, in an indirect reference to the New York Times report. “Over the last two decades we’ve collected a group of like-minded people. Folks who find our approach energising and meaningful.” In other words, the unsuited get selected out of existence at Amazon.
There’s something about the idea of Darwinian natural selection as a description of the business world that people who lead companies (particularly those in the fast-changing world of consumer-facing technology) find compelling. And one can see why. They are often faced with an array of strong competitors; consumers can switch their spending easily and quickly; a company has to be better, perhaps more adaptable, than the rest of the pack if it wants to make a profit. Bosses must feel as if they are in a constant battle for survival.
Yet, as a metaphor for business activity, this is rather misleading. In Charles Darwin’s great hypothesis it was random phenotypical traits resulting from genetic mutations that gave certain creatures an advantage in the struggle for survival in their particular natural habitat. So, for example, if a finch happens to be born with a certain shaped beak well suited to cracking open nuts common on a particular island that bird will survive, reproduce and pass down its genes. And over the generations the island may, ultimately, become populated by a species of finch with that particularly useful shaped beak.
It wasn’t that original finch’s brains, or anything it had control over, that gave it an edge, or meant it got “selected” to pass on its physical traits to future generations. The idea that it is the smartest, or the most energetic, or those with the best culture, that thrive and survive owes more to the pseudo-science of “social Darwinism”, as outlined by 19th century sociologists such as Herbert Spencer, than anything from Darwin’s The Origin of Species.
Free markets are Darwninan in a truer sense, in that selection is often much more about luck than judgement. Andy Grove of Intel wrote in his book, Only the Paranoid Survive, that: “Most companies don't die because they are wrong; most die because they don’t commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is in standing still.”
Grove, who died last month, was a truly exceptional businessman, but on this point he was wide of the mark. Most companies, over the long run, die because technology moves on and patterns of consumption shift – and there’s nothing their managements can really do about it. It’s story not so much about the quality of leaders or their innovative corporate cultures, but the inexorable disruptive power of markets.
Nothing a manufacturer of horse-drawn carriages had done upon the invention of the car would have saved the businesses (in its original form) from oblivion. Look at the composition of a stock market index of the world’s largest companies. It has changed almost beyond recognition over the decades.
Some firms are undoubtedly better run than others. Some are more innovative than others. But even the most successful are merely small boats bobbing on the surface of a great and treacherous ocean.
One day they will all be capsized. And others will take their place as new markets open. It will happen to Intel. It will happen to Amazon, too. And when it does, it’s unlikely to be a result of a lax corporate culture or employees who weren’t prepared to work weekends.
To be fair to Bezos, he readily admits in his letter that “luck plays an outsized role in every endeavour and I can assure you that we’ve had a bountiful supply”. He also stresses that Amazon’s culture is not the way all firms should be. It’s simply the one he believes will deliver the best results for Amazon.
Perhaps he’s right. He can certainly point to his company’s stunning rates of growth from zero in 1994 to today’s $275bn behemoth as evidence to support his methods. But he may well be wrong.
Perhaps different methods would actually produce better results. There’s evidence that workplaces in which people have a decent work-life balance are more productive and innovative. We can never really know.
The good news for those looking for a job in the technology sector is that the defining feature of competitive markets is diversity; meaning there are always lots of different firms and potential employers. It may feel like “The Everything Store” has become the everywhere store, but Amazon’s global workforce is still only 230,000. Compare that to the 1.5 million people who work for McDonald’s worldwide.
Thankfully, no one has to work at Amazon, or any place where the law of the jungle reigns.
The 1% hide their money offshore – then use it to corrupt our democracy
Aditya Chakrabortty in The Guardian
‘The past few days have confirmed that David Cameron is effectively in the Downing Street branch of the super-rich.’ Photograph: Neil Hall/Reuters
Over the past 72 hours, you have seen our political establishment operating at a level of panic rarely equalled in postwar history. Britain’s prime minister has had yanked out of him some of his most intimate financial details. Complete strangers now know how much he’s inherited so far from his mum and dad, and the offshore investments from which he’s profited. Yesterday he even took the unprecedented step of revealing the taxes he’d paid over the past six years. Leaders of other parties have responded by summarily publishing their own HMRC returns. In contemporary Britain, where one’s extramarital affairs are more readily discussed in public than one’s tax affairs, this is jaw-dropping stuff.
And it will not stop here. Whatever the lazy shorthand being used by some commentators, David Cameron has not released his tax returns, but merely a summary certified by an accountants’ firm. That halfway house will hardly be enough. If Jeremy Corbyn, other senior politicians and the press keep up this level of attack, then within days more details of the prime minister’s finances will emerge. Nor will the flacks of Downing Street be able to maintain their lockdown on disclosing how many cabinet members have offshore interests: the ministers themselves will break ranks. Indeed, a few are already beginning to do so.
But the risk is that all this will descend into a morass of semi-titillating detail: a string of revelations about who gave what to whom, and whether he or she then declared it to the Revenue. The story will become about “handling” and “narrative” and individual culpability. That will be entertaining for those who like to point fingers, perplexing for those too busy to engage in the detail – and miss the wider truth revealed by the leak which forced all this into public discussion.
Because at root, the Panama Papers are not about tax. They’re not even about money. What the Panama Papers really depict is the corruption of our democracy.
Following on from LuxLeaks, the Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Discussion of offshore centres can get bogged down in technicalities, but the best definition I’ve found comes from expert Nicholas Shaxson who sums them up as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…
But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. Think of the billionaire Koch brothers, whose fortunes will shape this year’s US presidential elections. In Britain, remember the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative party’s election funds – and so effectively bought the Tories their first taste of government in 18 years.
To flesh out the corrosion of democracy that is happening, you need to go to a Berlin-born economist called Albert Hirschman, a giant in modern economic thinking. Hirschman died in 2012 at the age of 97, but it’s his concepts that really set in context what’s so disturbing about the Panama Papers.
Hirschman argued that citizens could protest against a system in one of two ways: voice or exit. Fed up with your local school? Then you can exercise your voice and take it up with the headteacher. Alternatively, you can exit and take your child to a private school.
In Britain and in America, the super-rich have broken Hirschman’s law – they are at one and the same time exercising economic exit and political voice. They can have their tax-free cake and eat it.
What the past few days have confirmed is that David Cameron is effectively in the Downing Street branch of the super-rich. That he himself is part of the 1% is beyond dispute. His father was a senior stockbroker who was worth an estimated £10m. Newspapers so often bandy about the million unit that readers can get inured to its true significance. But if at the stroke of midnight on New Year’s Day you were lucky enough to get one pound coin every single second, it would still take 114 days to amass £10m. You would even now be waiting till Sunday week to collect the whole amount.
What have the super-rich got for their investment in British politics since 2010? Cuts in personal taxes, invitations from George Osborne to advise on overhauling corporation taxes, the security of knowing that their tax havens will be treated with due leniency.
In my politics lessons, we were taught that Britain was a representative democracy. But what 30 years of plutocracy have brought is an era of un-representative democracy. With a few exceptions, our politicians no longer resemble, nor do they work for us. Amid a crisis in the rental market, you have a housing minister, Brandon Lewis, who runs a private rental portfolio. You have a former investment banker, Sajid Javid, now claiming to do his best by the steel industry. And you have a super-rich prime minister who vows he’ll take on tax havens, all the while blocking any serious attempt to do so.
Over the past 72 hours, you have seen our political establishment operating at a level of panic rarely equalled in postwar history. Britain’s prime minister has had yanked out of him some of his most intimate financial details. Complete strangers now know how much he’s inherited so far from his mum and dad, and the offshore investments from which he’s profited. Yesterday he even took the unprecedented step of revealing the taxes he’d paid over the past six years. Leaders of other parties have responded by summarily publishing their own HMRC returns. In contemporary Britain, where one’s extramarital affairs are more readily discussed in public than one’s tax affairs, this is jaw-dropping stuff.
And it will not stop here. Whatever the lazy shorthand being used by some commentators, David Cameron has not released his tax returns, but merely a summary certified by an accountants’ firm. That halfway house will hardly be enough. If Jeremy Corbyn, other senior politicians and the press keep up this level of attack, then within days more details of the prime minister’s finances will emerge. Nor will the flacks of Downing Street be able to maintain their lockdown on disclosing how many cabinet members have offshore interests: the ministers themselves will break ranks. Indeed, a few are already beginning to do so.
But the risk is that all this will descend into a morass of semi-titillating detail: a string of revelations about who gave what to whom, and whether he or she then declared it to the Revenue. The story will become about “handling” and “narrative” and individual culpability. That will be entertaining for those who like to point fingers, perplexing for those too busy to engage in the detail – and miss the wider truth revealed by the leak which forced all this into public discussion.
Because at root, the Panama Papers are not about tax. They’re not even about money. What the Panama Papers really depict is the corruption of our democracy.
Following on from LuxLeaks, the Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Discussion of offshore centres can get bogged down in technicalities, but the best definition I’ve found comes from expert Nicholas Shaxson who sums them up as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…
But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. Think of the billionaire Koch brothers, whose fortunes will shape this year’s US presidential elections. In Britain, remember the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative party’s election funds – and so effectively bought the Tories their first taste of government in 18 years.
To flesh out the corrosion of democracy that is happening, you need to go to a Berlin-born economist called Albert Hirschman, a giant in modern economic thinking. Hirschman died in 2012 at the age of 97, but it’s his concepts that really set in context what’s so disturbing about the Panama Papers.
Hirschman argued that citizens could protest against a system in one of two ways: voice or exit. Fed up with your local school? Then you can exercise your voice and take it up with the headteacher. Alternatively, you can exit and take your child to a private school.
In Britain and in America, the super-rich have broken Hirschman’s law – they are at one and the same time exercising economic exit and political voice. They can have their tax-free cake and eat it.
What the past few days have confirmed is that David Cameron is effectively in the Downing Street branch of the super-rich. That he himself is part of the 1% is beyond dispute. His father was a senior stockbroker who was worth an estimated £10m. Newspapers so often bandy about the million unit that readers can get inured to its true significance. But if at the stroke of midnight on New Year’s Day you were lucky enough to get one pound coin every single second, it would still take 114 days to amass £10m. You would even now be waiting till Sunday week to collect the whole amount.
What have the super-rich got for their investment in British politics since 2010? Cuts in personal taxes, invitations from George Osborne to advise on overhauling corporation taxes, the security of knowing that their tax havens will be treated with due leniency.
In my politics lessons, we were taught that Britain was a representative democracy. But what 30 years of plutocracy have brought is an era of un-representative democracy. With a few exceptions, our politicians no longer resemble, nor do they work for us. Amid a crisis in the rental market, you have a housing minister, Brandon Lewis, who runs a private rental portfolio. You have a former investment banker, Sajid Javid, now claiming to do his best by the steel industry. And you have a super-rich prime minister who vows he’ll take on tax havens, all the while blocking any serious attempt to do so.
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