Time to hold our lying leaders to account

Nick Cohen in The Guardian


Post-truth politics isn’t a coherent description of the world but a cry of despair. Propositions have not stopped being right or wrong just because of the invention of Facebook. Whatever the authoritarian cults who rage across Twitter say to the contrary, the Earth still goes round the sun and two plus two still equals four.

“Everything is relative. Stories are being made up all the time. There is no such thing as the truth,” cried Anthony Grayling. But unless the professor has abandoned every philosophical principle he has held, what Grayling and millions like him mean is something like this. Donald Trump, Boris Johnson, and other liars the like of which they cannot remember, have made fantastical promises to their electorates. They said they could build a wall and make Mexico pay for it or make Britain richer by crashing her out of the EU.

But instead of laughing at their transparent falsehoods or being insulted at being taken for fools, blocs of voters have handed them victory. Evidence could not shake them. Common sense could not reach them. Surely, their gullibility shows we have arrived in a new dystopia. You can see why they got that way. Trump is clear that the checks and balances that restrained power in the old world will not apply to him. His refusal to release his tax returns shows it. The Russian dissident Garry Kasparov put the urgent case for transparency best when he said Trump has criticised Republicans, Democrats, the pope, the CIA, FBI, Nato, Meryl Streep… everyone and anyone “except Vladimir Putin”.

What gives here? And more to the point, who’s on the take? I see an ideological affinity between Russian autocracy, the western far left and the western populist right: they band together against the common enemy of liberal democracy. But it has always been reasonable to ask whether the traditional inducements of sex and money have tightened Putin’s grip on Trump.

You could lay this canard to rest by publishing your tax returns, American journalists told their president-elect. You must know the American public wants to see them.

The public doesn’t care, Trump replied. I went into an election refusing to release my tax returns and “I won.” So now I can do what I want.

His spokeswoman, Kellyanne Conway, who could work for a Russian propaganda channel when she’s thrown out of politics, uses the same logic when asked whether it is “presidential” for her master to lie so often and so blatantly. “He’s the president-elect, so that’s presidential behaviour.”
The British are experiencing their own version of Trumpish triumphalism. In our case, too, the answer to every hard question is a brute proclamation of power. Are you seriously going to take us out of the single market? Leave won. And the customs union? Leave won. What about EU citizens here? Leave won. And British citizens there? Leave won.

Fighting back should be easy – if you cannot expose charlatans such as Trump and Johnson, you should step aside a make way for people who can. But a terrible uncertainty grips opposition politics across the English-speaking world. Trump’s victory strikes me as a far greater cause for self-doubt than Brexit. Because we never had to endure invasion by Hitler or Stalin, or government by Greek colonels or Spanish falangists, the British did not have the same emotional attachment to an EU that freed the rest of Europe from a terrible past.

Even if, as I do, you regard the decision to leave as a monumental blunder, it is not, given Britain’s lucky history, inexplicable. Trump’s victory, by contrast, overturns truths that western liberals felt to be self-evident. You cannot abuse women and ethnic minorities. You cannot lie in your every second utterance. If you do, the media will expose and destroy you.

I can’t find a better way of illustrating the demoralising change in the weather than by referring you to Alan Ryan’s history of western political thought, On Politics. I don’t mean to criticise Ryan. He has produced a vast and brilliant book that stands comparison with Bertrand Russell’s History of Western Philosophy. But unlike Russell, who was gloriously waspish and prejudiced, Ryan is a careful writer and his rare opinionated judgments are all the more authoritative for that.

In 2013 he, like nearly every serious person, could say with absolute certainty that, despite its legion of faults, the 21st century was better than the 20th. For instance, Ryan explained, Governor George Wallace’s infamous battle cry of the 1950s – “I will never be out-niggered”, after he had been beaten by a politician who was even more of a racist than he was – “would today instantly terminate his career”.

Yet in 2016, Trump echoed Wallace and far from seeing his career terminated became president of the United States, an office that Wallace never came near, incidentally. After that, I can understand why the disoriented talk about a post-truth world, but it remains a sign of their trauma rather than a description of our times.

It is as dangerous to overestimate the importance of technological change as to underestimate it. There was no web in 1968, and US broadcasters had to be accurate and impartial. The old world of 20th-century technology did not, however, stop George Wallace winning millions of white, working-class voteswhen he ran for president as an open white supremacist. Wallace was beaten by Richard Nixon, a closet racist and crook.

When his crimes caught up with him, Nixon declared that he could not be prosecuted because “when the president does it, that means it is not illegal”, a line that Conway might have written for him.

Post-truth world or not, a Republican abolition of Obamacare will still leave white, working-class Americans who voted for Trump to rot without decent treatment, a hard Brexit will still hurt the British working class more than their rightwing leaders, the Earth will still go round the sun, and two plus two will still equal four.

To pretend that we are living in a culture without historical precedent is to make modernity an excuse for the abnegation of political responsibility. The question for the Anglo-Saxon opposition is not how to cope with a world where truth has suddenly become as hard to find as Trump’s tax returns. It is the same question that has faced every opposition in the history of democracy: how can we make the powerful pay for the lies they have fed to the masses?

Fateh ka Fatwa 2 - Should the burqah / purdah be permitted?

Main Bhi Kafir, Tu Bhi Kafir by abducted teacher, poet and activist Salman Haider

Salman Haider reciting Main bhi Kafir, Tu bhi Kafir

History of the muzzling of the freedom of expression in Pakistan - by Hamid Bhashani

All those in developing countries please look away now - Aid in reverse: how poor countries develop rich countries

Jason Hickel In The Guardian


We have long been told a compelling story about the relationship between rich countries and poor countries. The story holds that the rich nations of the OECD give generously of their wealth to the poorer nation cheats of the global south, to help them eradicate poverty and push them up the development ladder. Yes, during colonialism western powers may have enriched themselves by extracting resources and slave labour from their colonies – but that’s all in the past. These days, they give more than $125bn (£102bn) in aid each year – solid evidence of their benevolent goodwill.

This story is so widely propagated by the aid industry and the governments of the rich world that we have come to take it for granted. But it may not be as simple as it appears.

The US-based Global Financial Integrity (GFI) and the Centre for Applied Research at the Norwegian School of Economics recently published some fascinating data. They tallied up all of the financial resources that get transferred between rich countries and poor countries each year: not just aid, foreign investment and trade flows (as previous studies have done) but also non-financial transfers such as debt cancellation, unrequited transfers like workers’ remittances, and unrecorded capital flight (more of this later). As far as I am aware, it is the most comprehensive assessment of resource transfers ever undertaken.


The flow of money from rich countries to poor countries pales in comparison to the flow that runs in the other direction

What they discovered is that the flow of money from rich countries to poor countries pales in comparison to the flow that runs in the other direction.

In 2012, the last year of recorded data, developing countries received a total of $1.3tn, including all aid, investment, and income from abroad. But that same year some $3.3tn flowed out of them. In other words, developing countries sent $2tn more to the rest of the world than they received. If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3tn – that’s how much money has been drained out of the global south over the past few decades. To get a sense for the scale of this, $16.3tn is roughly the GDP of the United States

What this means is that the usual development narrative has it backwards. Aid is effectively flowing in reverse. Rich countries aren’t developing poor countries; poor countries are developing rich ones.

What do these large outflows consist of? Well, some of it is payments on debt. Developing countries have forked out over $4.2tn in interest payments alone since 1980 – a direct cash transfer to big banks in New York and London, on a scale that dwarfs the aid that they received during the same period. Another big contributor is the income that foreigners make on their investments in developing countries and then repatriate back home. Think of all the profits that BP extracts from Nigeria’s oil reserves, for example, or that Anglo-American pulls out of South Africa’s gold mines.

But by far the biggest chunk of outflows has to do with unrecorded – and usually illicit – capital flight. GFI calculates that developing countries have lost a total of $13.4tn through unrecorded capital flight since 1980.

Most of these unrecorded outflows take place through the international trade system. Basically, corporations – foreign and domestic alike – report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions, a practice known as “trade misinvoicing”. Usually the goal is to evade taxes, but sometimes this practice is used to launder money or circumvent capital controls. In 2012, developing countries lost $700bn through trade misinvoicing, which outstripped aid receipts that year by a factor of five.

Multinational companies also steal money from developing countries through “same-invoice faking”, shifting profits illegally between their own subsidiaries by mutually faking trade invoice prices on both sides. For example, a subsidiary in Nigeria might dodge local taxes by shifting money to a related subsidiary in the British Virgin Islands, where the tax rate is effectively zero and where stolen funds can’t be traced.

GFI doesn’t include same-invoice faking in its headline figures because it is very difficult to detect, but they estimate that it amounts to another $700bn per year. And these figures only cover theft through trade in goods. If we add theft through trade in services to the mix, it brings total net resource outflows to about $3tn per year.

That’s 24 times more than the aid budget. In other words, for every $1 of aid that developing countries receive, they lose $24 in net outflows. These outflows strip developing countries of an important source of revenue and finance for development. The GFI report finds that increasingly large net outflows have caused economic growth rates in developing countries to decline, and are directly responsible for falling living standards.

Who is to blame for this disaster? Since illegal capital flight is such a big chunk of the problem, that’s a good place to start. Companies that lie on their trade invoices are clearly at fault; but why is it so easy for them to get away with it? In the past, customs officials could hold up transactions that looked dodgy, making it nearly impossible for anyone to cheat. But the World Trade Organisation claimed that this made trade inefficient, and since 1994 customs officials have been required to accept invoiced prices at face value except in very suspicious circumstances, making it difficult for them to seize illicit outflows.

FacebookTwitterPinterest Protest about tax havens in London in 2016, organised by charities Oxfam, ActionAid and Christian Aid. Photograph: Carl Court/Getty Images

Still, illegal capital flight wouldn’t be possible without the tax havens. And when it comes to tax havens, the culprits are not hard to identify: there are more than 60 in the world, and the vast majority of them are controlled by a handful of western countries. There are European tax havens such as Luxembourg and Belgium, and US tax havens like Delaware and Manhattan. But by far the biggest network of tax havens is centered around the City of London, which controls secrecy jurisdictions throughout the British Crown Dependencies and Overseas Territories.

In other words, some of the very countries that so love to tout their foreign aid contributions are the ones enabling mass theft from developing countries.

The aid narrative begins to seem a bit naïve when we take these reverse flows into account. It becomes clear that aid does little but mask the maldistribution of resources around the world. It makes the takers seem like givers, granting them a kind of moral high ground while preventing those of us who care about global poverty from understanding how the system really works.
Poor countries don’t need charity. They need justice. And justice is not difficult to deliver. We could write off the excess debts of poor countries, freeing them up to spend their money on development instead of interest payments on old loans; we could close down the secrecy jurisdictions, and slap penalties on bankers and accountants who facilitate illicit outflows; and we could impose a global minimum tax on corporate income to eliminate the incentive for corporations to secretly shift their money around the world.

We know how to fix the problem. But doing so would run up against the interests of powerful banks and corporations that extract significant material benefit from the existing system. The question is, do we have the courage?