From the End of History to the End of Democracy

When the Cold War was at a supposed end and the West was in a triumphant mood, the American philosopher Francis Fukuyama penned the book The End of History and the Last Man (1992). As such, a book carrying such an hyperbolic title should have been met with derision but was instead celebrated across the world. Fukuyama’s thesis was couched on “a belief that, after the fall of communism, free-market liberal democracy had won out and would become the world’s final form of human government”, as articulated by the journalist Ishaan Tharoor.¹ The book starts out as follows: “[t]he distant origins of the present volume lie in an article entitled ‘The End of History?’ which I wrote for the journal The National Interest in the summer of 1989. In it, I argued that a remarkable consensus concerning the legitimacy of liberal democracy as a system of government had emerged throughout the world over the past few years, as it conquered rival ideologies like hereditary monarchy, fascism, and most recently communism. More than that, however, I argued that liberal democracy may constitute the ‘end point of mankind’s ideological evolution’ and the ‘final form of human government,’ and as such constituted the ‘end of history.’ That is, while earlier forms of government were characterised by grave defects and irrationalities that led to their eventual collapse, liberal democracy was arguably free from such fundamental internal contradictions. This was not to say that today’s stable democracies, like the United States, France, or Switzerland, were not without injustice or serious social problems. But these problems were ones of incomplete implementation of the twin principles of liberty and equality on which modern democracy is founded, rather than of flaws in the principles themselves. While some present-day countries might fail to achieve stable liberal democracy, and others might lapse back into other, more primitive forms of rule like theocracy or military dictatorship, the ideal of liberal democracy could not be improved on”.²

Fukuyama’s words are literally bathing in a pool of hybris and American Optimism and Exceptionalism . . . a philosophy book acting like a cheerleader for the ‘Greatest Nation on Earth’. The social scientist Selcen Öner wrote a critique of the book, analysing the thesis and its ramifications, starting off by stating that “[t]he victory of the West and Western idea is evident firstly with the collapse of systematic alternatives to Western liberalism. [Fukuyama] states that, in the past decade, there have been important changes in the intellectual climate of the world’s two largest communist countries (Russia, China) and reform movements have begun in both. Also it can be seen in the spread of consumerist Western culture. As a result of these indications, he reaches to his main idea: ‘What we may be witnessing is not just the end of the Cold War or the passing of a particular period of post-war history; that is the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.’ But as we see from the beginning, [Fukuyama] states his arguments without a strong basis [in fact-based reality] and with a lack of evidence. After expressing his main argument, he makes some references to Marx, Hegel and Kojeve. He says that his main concept ‘the end of history’, is not an original concept. This concept was firstly used by Hegel. According to Hegel, history is a dialectical process, with a beginning, a middle and an end. On the other hand, Marx, believes that, the direction of historical development was a purposeful one and would come to an end with the achievement of a communist Utopia that would finally resolve all prior contradiction”.³

Öner concludes that Fukuyama “tried to make a long-term civilizational analysis, but with only analysing short-term indicators. So he [should have rather used] the term ‘civilizational transformation’, instead of ‘end of history’. The era which was tried to be analyzed and defined by Fukuyama was only one of the turning points in the world history. As we can see . . . history is within an ongoing transformation process which needs further analysis. Consequently we can say that, Fukuyama wanted to give a name to the situation after the collapse of [C]ommunism. He [coined] the [phrase] ‘the end of history’, with one-dimensional, ethno-centric perspective. He was too quick to claim such an assertive thesis. Probably he did this to legitimize and formulate the theoretical framework of the New World Order. Because to create a new world order, the old one must have an end. To legitimize US’s leader role, he uses Hegel. Because he also ends history with the victory of one state. To show US’s ever lasting victory, he had to create a very optimistic perspective. His main contribution is, after his article [and subsequent book]’s [publication] there has been an acceleration in critiques about the post cold war world”.⁴

And now, the philosophical cheerleader of American Optimism and Exceptionalism has apparently had a brush with reality, as he told Ishaan Tharoor during a telephone interview that “[t]wenty five years ago, I didn’t have a sense or a theory about how democracies can go backward,” adding insightfully, “[a]nd I think they clearly can”.⁵ In the next instance, Fukuyama turns to the current U.S. President, Donald J. Trump (aka the Drumpf),6 stating apparently in a somewhat dejected voice: “I have honestly never encountered anyone in political life who[m] I thought had a less suitable personality to be president . . . Trump is so thin-skinned and insecure that he takes any kind of criticism or attack personally and then hits back“.⁷ Taking developments in Europe and beyond into consideration, Fukuyama muses philosophically that “We don’t know how it’s all going to play out“.⁸ It now seems that the the philosophical cheerleader of American Optimism and Exceptionalism has now become resigned that his earlier predictive utterings turned out to be fallacious . . . in fact, in his famous book published more than two decades ago now, Fukuyama did say that “this very prospect of centuries of boredom at the end of history will serve to get history started once again”.⁹

1 Ishaan Tharoor, “The man who declared the ‘end of history’ fears for democracy’s future” Washington Post (09 Feb 2017). https://www.washingtonpost.com/news/worldviews/wp/2017/02/09/the-man-who-declared-the-end-of-history-fears-for-democracys-future/?utm_term=.dd78f5d1fa73.

2 Francis Fukuyama, “By Way of an Introduction” The End of History and the Last Man. https://www.marxists.org/reference/subject/philosophy/works/us/fukuyama.htm.

3 Selcen Öner , “A BRIEF ANALYSIS OF FUKUYAMA’S THESIS “THE END OF HISTORY?” Istanbul Journal of Sociological Studies, 27 (2003). www.journals.istanbul.edu.tr/iusoskon/article/download/1023005867/1023005391.

4 Selcen Öner , “A BRIEF ANALYSIS OF FUKUYAMA’S THESIS “THE END OF HISTORY?” .

5 Ishaan Tharoor, “The man who declared the ‘end of history’ fears for democracy’s future”.

6 “Make Donald Drumpf Again, #2” The Erimtan Angle (08 March 2016). https://sitanbul.wordpress.com/2016/03/08/make-donald-drumpf-again-2/.

7 Ishaan Tharoor, “The man who declared the ‘end of history’ fears for democracy’s future”.

8 Ishaan Tharoor, “The man who declared the ‘end of history’ fears for democracy’s future”.

9 Ishaan Tharoor, “The man who declared the ‘end of history’ fears for democracy’s future”.

Another Cold War Legacy: A United Europe as an American Project

As long ago as the year 2000, the international business editor of the Daily Telegraph Ambrose Evans-Pritchard wrote that “DECLASSIFIED American government documents show that the US intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement. The documents confirm suspicions voiced at the time that America was working aggressively behind the scenes to push Britain into a European state. One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA. The documents were found by Joshua Paul, a researcher at Georgetown University in Washington. They include files released by the US National Archives. Washington’s main tool for shaping the European agenda was the American Committee for a United Europe, created in 1948. The chairman was Donovan, ostensibly a private lawyer by then. The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA’s first director, and a roster of ex-OSS figures and officials who moved in and out of the CIA. The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years. In 1958, for example, it provided 53.5 per cent of the movement’s funds. The European Youth Campaign, an arm of the European Movement, was wholly funded and controlled by Washington. The Belgian director, Baron Boel, received monthly payments into a special account. When the head of the European Movement, Polish-born Joseph Retinger, bridled at this degree of American control and tried to raise money in Europe, he was quickly reprimanded”.[1]

In 1997, the Professor of International Security at the University of Warwick Richard Aldrich published an article stating that after “1945, a variety of Western organizations, not just intelligence agencies, drew up programmes of covert operations designed both to undermine Communist influence in Europe and to ensure a welcome for the Marshall Plan. Examples have been documented in the fields of electoral politics, organized labour and cultural affairs. US officials trying to rebuild and stabilize postwar Europe worked from the assumption that it required rapid unification, perhaps leading to a United States of Europe. The encouragement of European unification, one of the most consistent components of Harry S. Truman’s foreign policy, was even more strongly emphasized under his successor General Dwight D. Eisenhower. Moreover, under both Truman and Eisenhower, US policymakers conceived of European unification not only as an important end in itself, but also as a way to solve the German problem. The use of covert operations for the specific promotion of European unity has attracted little scholarly attention and remains poorly understood”.[2]

In May 1956, for instance, President Eisenhower gave a speech at Baylor University in Waco, Texas, saying that “European union, one of the greatest dreams of Western man, seems nearer today than at any time in centuries . . . a free, United States of Europe” [would turn the continent into] “a mighty pillar of free strength in the modern world”.[3] Professor Aldrich, for his part, merely points out that “[o]ne of the most interesting US covert operations in postwar Europe was the funding of the European Movement. The European Movement was an umbrella organization which led a prestigious, if disparate, group of organizations urging rapid unification in Europe, focusing their efforts upon the Council of Europe, and counting Winston Churchill, Paul-Henri Spaak, Konrad Adenauer, Leon Blum and Alcide de Gasperi as its five Presidents of Honour. In 1948, its main handicap was the scarcity of funds. It will be argued here that the discreet injection of over three million dollars between 1949 and 1960, mostly from US government sources, was central to efforts to drum up mass support for the Schuman Plan, the European Defence Community and a European Assembly with sovereign powers. This covert contribution never formed less than half the European Movement’s budget and, after 1952, probably two-thirds. Simultaneously they sought to undermine the staunch resistance of the British Labour government to federalist ideas”.[4] Aldrich then adds that the “conduit for American assistance was the American Committee on United Europe (ACUE), directed by senior figures from the American intelligence community. This body was organized in the early Summer of 1948 by Allen Welsh Dulles, then heading a committee reviewing the organization of the Central Intelligence Agency (CIA) on behalf of the National Security Council (NSC), and also by William J. Donovan, former head of the wartime Office of Strategic Services (OSS). They were responding to separate requests for assistance from Count Richard Coudenhove-Kalergi, a veteran Pan-European campaigner from Austria, and from [Winston] Churchill. ACUE worked closely with US government officials, particularly those in the Economic Cooperation Administration (ECA) and also with the National Committee for a Free Europe”.[5]

Still, Professor Aldrich seems confident enough to say that “[Winston] Churchill was effectively the founder of the European Movement”.[6] Going down to the nitty-gritty, Aldrich declares that the “emerging European Community and the growing Western intelligence community overlapped to a considerable degree. This is firmly underlined by the creation of Retinger’s Bilderberg Group, an informal secretive transatlantic council of key decisionmakers developed between 1952 and 1954. The Bilderberg Group grew out of the same overlapping networks of drawn from the European Community and the Western intelligence community. Bilderberg was founded by Joseph Retinger and Prince Bernhard of the Netherlands in 1952 in response to the rise of anti-Americanism in western Europe and was designed to define some sort of Atlantic consensus amid diverging European and American outlooks. It brought leading European and American personalities together once a year for an informal discussion of their differences. Retinger secured support from Averell Harriman, David Rockefeller and Bedell Smith. The formation of the American wing of Bilderberg was entrusted to Eisenhower’s psychological warfare coordinator, CD. Jackson, and the funding for the first meeting, held at the Hotel de Bilderberg in Holland in 1954, was provided by the CIA. Thereafter, much of its funding came from the Ford Foundation. By 1958, those attending Bilderberg included McCloy, Dean Acheson, George Ball and Paul Nitze. It is striking that three important transnational elite groups emerging in the 1950s: the European Movement, the Bilderberg Group and Jean Monnet’s Action Committee for a United States of Europe all shared the broadly the same origins and sources of support”.[7]

In his Telegraph piece, Ambrose Evans-Pritchard then concluded that the “leaders of the European Movement – [Joseph] Retinger, the visionary Robert Schuman and the former Belgian prime minister Paul-Henri Spaak – were all treated as hired hands by their American sponsors. The US role was handled as a covert operation. ACUE’s funding came from the Ford and Rockefeller foundations as well as business groups with close ties to the US government. The head of the Ford Foundation, ex-OSS officer Paul Hoffman, doubled as head of ACUE in the late Fifties. The State Department also played a role. A memo from the European section, dated June 11, 1965, advises the vice-president of the European Economic Community, Robert Marjolin, to pursue monetary union by stealth”.[8]

 

 

[1] Ambrose Evans-Pritchard, “Euro-federalists financed by US spy chiefs” The Telegraph (19 September 2000). http://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html.

[2] Richard J. Aldrich, “OSS, CIA and European unity: The American committee on United Europe, 1948-60” Diplomacy & Statecraft (01 March 1997). https://www2.warwick.ac.uk/fac/soc/pais/people/aldrich/publications/oss_cia_united_europe_eec_eu.pdf.

[2] “Letter written by William J. Donovan, Chairman. of the ACUE, to Senator Lehman of New York” (19 June 1956). http://www.columbia.edu/cu/lweb/digital/collections/rbml/lehman/pdfs/0235/ldpd_leh_0235_0027.pdf.

[4] Richard J. Aldrich, “OSS, CIA and European unity: The American committee on United Europe, 1948-60”.

[5] Richard J. Aldrich, “OSS, CIA and European unity: The American committee on United Europe, 1948-60”.

[6] Richard J. Aldrich, “OSS, CIA and European unity: The American committee on United Europe, 1948-60”.

[7] Richard J. Aldrich, “OSS, CIA and European unity: The American committee on United Europe, 1948-60”.

[8] Ambrose Evans-Pritchard, “Euro-federalists financed by US spy chiefs”.

Chilcot Inquiry: the Report and the Regrets

Channel 4 New: Published on Jul 4, 2016. It has been long in coming, but at long last and finally, here it is: “The inquiry has not expressed a view on whether military action was legal. That could, of course, only be resolved by a properly constituted and internationally recognised court . . . We have however concluded that the circumstances in which it was decided that there was a legal basis for UK military action were far from satisfactory”.

Jeremy Corbyn – Response to the Chilcot Inquiry report

‘This is the entire speech I just gave to the House of Commons in response to the Chilcot Inquiry report into the Iraq war. It is only a provisional response – as I only received the report this morning – but I will be giving a further response later today. The intervention in Iraq was a tragic decision which lead to the deaths of 179 British personnel and hundreds of thousands of Iraqis – while destabilising the region and increasing the threat of terrorism to our own country. Published on Jul 6, 2016’.

The Report of the Iraq Inquiry. Executive Summary

Introduction

1. In 2003, for the first time since the Second World War, the United Kingdom took part in an opposed invasion and full‑scale occupation of a sovereign State – Iraq. Cabinet decided on 17 March to join the US‑led invasion of Iraq, assuming there was no last‑minute capitulation by Saddam Hussein. That decision was ratified by Parliament the next day and implemented the night after that.
2. Until 28 June 2004, the UK was a joint Occupying Power in Iraq. For the next five years, UK forces remained in Iraq with responsibility for security in the South‑East; and the UK sought to assist with stabilisation and reconstruction.
3. The consequences of the invasion and of the conflict within Iraq which followed are still being felt in Iraq and the wider Middle East, as well as in the UK. It left families bereaved and many individuals wounded, mentally as well as physically. After harsh deprivation under Saddam Hussein’s regime, the Iraqi people suffered further years of violence.
4. The decision to use force – a very serious decision for any government to take – provoked profound controversy in relation to Iraq and became even more controversial when it was subsequently found that Iraq’s programmes to develop and produce chemical, biological and nuclear weapons had been dismantled. It continues to shape debates on national security policy and the circumstances in which to intervene.
5. Although the Coalition had achieved the removal of a brutal regime which had defied the United Nations and which was seen as a threat to peace and security, it failed to achieve the goals it had set for a new Iraq. Faced with serious disorder in Iraq, aggravated by sectarian differences, the US and UK struggled to contain the situation. The lack of security impeded political, social and economic reconstruction.
6. The Inquiry’s report sets out in detail decision‑making in the UK Government covering the period from when the possibility of military action first arose in 2001 to the departure of UK troops in 2009. It covers many different aspects of policy and its delivery.[1]

[1] “The Report of the Iraq Inquiry. Executive Summary” The Iraq Inquiry. http://www.iraqinquiry.org.uk/media/246416/the-report-of-the-iraq-inquiry_executive-summary.pdf.

Stupid is as Stupid does: Farage in the U.S.

‘Once, young conservatives in the US looked across the ocean to Margaret Thatcher. Now the model is Nigel Farage. According to The Guardian, the garrulous chain-smoker has become the model of trans-Atlantic conservativism to many on the right. The Brexit vote was greeted with jubilation by many on the American right. On talk radio, Rush Limbaugh praised the vote as a nation of people rising up against the ruling class and the elites, while Fox TV’s Sean Hannity described the Leave vote as “the British people, in their very polite way, showed Obama their middle finger”. And while Donald Trump vocally endorsed Brexit, many vehement Trump opponents on the American right also did so as well. Ted Cruz called the result “a wake-up call for internationalist bureaucrats from Brussels to Washington DC that some free nations still wish to preserve their national sovereignty”. As the American right combines long-standing suspicion of big government and growing hawkishness on immigration, the admiration for Farage and UKIP in the US is only likely to grow. Published on Jun 28, 2016′.

Seen from this side of the world. one cannot but be struck by the fact that people across the pond oftentimes, if not all the time, appear to be totally clueless. As such, Mister Farage has been biting the hand that feeds for the past 17 years, pocketing his MEP salary and stashing it away in an offshore tax haven . . . Farage, it turns out, set up a “trust fund in an offshore tax haven which could have enabled him to cut his tax bill. Farage, who previously condemned tax avoiders in a speech to the European parliament, said that he paid a tax adviser to set up the Farage Family Educational Trust 1654 on the Isle of Man”.[1] Apart from being a populist and jingoistic opportunist, Mister Farage also shows himself to be a first class hypocrite at the end of the day.

And now, Conservatives in the U.S. have apparently discovered this little man as well . . . replacing Maggie Thatcher and rivalling the Drumpf in his appeal to the uninformed and intellectually ill-equipped. This really is a brave new world we live in today . . . Farage to a newspaper that “[m]y financial advisers recommended I did it, to have a trust really for inheritance purposes and I took the advice and I set it up. It was a mistake. I was a completely unsuitable person for it. I am not blaming them, it was my fault. It’s a vehicle that you chuck things in through your life that you don’t need and you build up a trust fund for your children or grandchildren. It was called an educational trust and could have been used for grandchildren’s schools fees, things like that. It was a mistake for three reasons. Firstly, I’m not rich enough to need one and I am never going to be. Secondly, frankly, the world has changed. Things that we thought were absolutely fair practice 10 years, 20 years ago, 30 years ago aren’t any more. Thirdly, it was a mistake because it cost me money. I sent a cheque off to set it up”.[2] In his own words, somebody has thus for years been making the wrong plans for Nigel . . .

 

[1] Rajeev Syal, “Nigel Farage admits setting up tax haven trust fund was a mistake” The Guardian (21 June 2013). http://www.theguardian.com/politics/2013/jun/21/nigel-farage-tax-haven-trust-fund-mistake.

[2] Rajeev Syal, “Nigel Farage admits setting up tax haven trust fund was a mistake”.

The Gods of Money

William Engdahl is an American-German freelance journalist, historian and economic researcher. This lecture is based on Engdahls book The Gods of Money. The dollar financial system of Wall Street was born not at a conference in Bretton Woods New Hampshire in 1944. It was born in the first days of August, 1945 with the dropping of the atomic bomb on Hiroshima and Nagasaki. After that point the world was in no doubt who was the power to reckon with. This lecture traces the history of money as an instrument of power; it traces the evolution of that power in the hands of a tiny elite that regards themselves as, quite literally, gods-The Gods of Money. How these gods abused their power and how they systematically set out to control the entire world is the subject. Published on Jun 3, 2014′.

 

#Brexit = #NoMoreUK

This is another morning after the night before . . . Cameron is gone, having washed his hands and said his goodbyes . . . and here is an opinion worth sharing: an unknown member of the public calling him/herself Teebs wrote on the Guardian webpage that “If Boris Johnson looked downbeat yesterday, that is because he realises that he has lost. Perhaps many Brexiters do not realise it yet, but they have actually lost, and it is all down to one man: David Cameron. With one fell swoop yesterday at 9:15 am, Cameron effectively annulled the referendum result, and simultaneously destroyed the political careers of Boris Johnson, Michael Gove and leading Brexiters who cost him so much anguish, not to mention his premiership. How? Throughout the campaign, Cameron had repeatedly said that a vote for leave would lead to triggering Article 50 straight away. Whether implicitly or explicitly, the image was clear: he would be giving that notice under Article 50 the morning after a vote to leave. Whether that was scaremongering or not is a bit moot now but, in the midst of the sentimental nautical references of his speech yesterday, he quietly abandoned that position and handed the responsibility over to his successor. And as the day wore on, the enormity of that step started to sink in: the markets, Sterling, Scotland, the Irish border, the Gibraltar border, the frontier at Calais, the need to continue compliance with all EU regulations for a free market, re-issuing passports, Brits abroad, EU citizens in Britain, the mountain of legislation to be torn up and rewritten … the list grew and grew. The referendum result is not binding. It is advisory. Parliament is not bound to commit itself in that same direction. The Conservative party election that Cameron triggered will now have one question looming over it: will you, if elected as party leader, trigger the notice under Article 50? Who will want to have the responsibility of all those ramifications and consequences on his/her head and shoulders? Boris Johnson knew this yesterday, when he emerged subdued from his home and was even more subdued at the press conference. He has been out-manoeuvred and check-mated. If he runs for leadership of the party, and then fails to follow through on triggering Article 50, then he is finished. If he does not run and effectively abandons the field, then he is finished. If he runs, wins and pulls the UK out of the EU, then it will all be over – Scotland will break away, there will be upheaval in Ireland, a recession … broken trade agreements. Then he is also finished. Boris Johnson knows all of this. When he acts like the dumb blond it is just that: an act. The Brexit leaders now have a result that they cannot use. For them, leadership of the Tory party has become a poison chalice. When Boris Johnson said there was no need to trigger Article 50 straight away, what he really meant to say was “never”. When Michael Gove went on and on about “informal negotiations” … why? why not the formal ones straight away? … he also meant not triggering the formal departure. They both know what a formal demarche would mean: an irreversible step that neither of them is prepared to take. All that remains is for someone to have the guts to stand up and say that Brexit is unachievable in reality without an enormous amount of pain and destruction, that cannot be borne. And David Cameron has put the onus of making that statement on the heads of the people who led the Brexit campaign”.[1]

So, it’s all over now and the UK appears set to leave the EU and will in all likelihood collapse in the next instance, with Scotland, Ulster, and Gibraltar opting to stay in the Union . . .

The EU is nothing but a political fig leaf for the powers that run the show known as Post-Democracy, but at the same time, the Brexit will very likely turn the UK (or rather, England) into Europe’s sole and single island third world nation . . .

Nigel (with or without plans) and Boris and his Johnson will now have to lay in the beds they have made for themselves . . .

#Brexit = #NoMoreUK

[1] Narjas Zatat, “People are really, really hoping this theory about David Cameron and Brexit is true” The Independent (s,d,). http://indy100.independent.co.uk/article/people-are-really-really-hoping-this-theory-about-david-cameron-and-brexit-is-true–bJhqBql0VZ.

Naomi Klein on Global Neoliberalism

 

 

Naomi Klein on the end of “El Modelo”. Published on Apr 23, 2012.

 

Panama Papers: The Revolution Will Be Digitized

About a month ago, the Panama Papers were first revealed . . . and the world has never been the same, or rather, for a few days the whole world was abuzz but then the buzz died down and people went about their business as usual. In the coming days, the whole circus is set to start up anew: “On May 9 ICIJ will publish information about secret offshore companies and the people behind them, based on data from the Panama Papers investigation. The searchable database will include information about more than 200,000 companies, trusts, foundations and funds incorporated in 21 tax havens, from Hong Kong to Nevada in the United States”.

John Doe has now broken his silence and issued a public statement explaining himself: “Titled The Revolution Will Be Digitized the 1800-word statement gives justification for the leak, saying that “income inequality is one of the defining issues of our time” and says that government authorities need to do more to address it. Süddeutsche Zeitung has authenticated that the statement came from the Panama Papers source”.[i] And here are some of his words: “Income inequality is one of the defining issues of our time. It affects all of us, the world over. The debate over its sudden acceleration has raged for years, with politicians, academics and activists alike helpless to stop its steady growth despite countless speeches, statistical analyses, a few meagre protests, and the occasional documentary. Still, questions remain: why? And why now? The Panama Papers provide a compelling answer to these questions: massive, pervasive corruption. And it’s not a coincidence that the answer comes from a law firm. More than just a cog in the machine of ‘wealth management’, Mossack Fonseca used its influence to write and bend laws worldwide to favour the interests of criminals over a period of decades. In the case of the island of Niue, the firm essentially ran a tax haven from start to finish. Ramón Fonseca and Jürgen Mossack would have us believe that their firm’s shell companies, sometimes called ‘special purpose vehicles’, are just like cars. But used car salesmen don’t write laws. And the only ‘special purpose’ of the vehicles they produced was too often fraud, on a grand scale”.[2]

And then, John Doe goes on to explain himself: “For the record, I do not work for any government or intelligence agency, directly or as a contractor, and I never have. My viewpoint is entirely my own, as was my decision to share the documents with Süddeutsche Zeitung and the International Consortium of Investigative Journalists (ICIJ), not for any specific political purpose, but simply because I understood enough about their contents to realize the scale of the injustices they described. The prevailing media narrative thus far has focused on the scandal of what is legal and allowed in this system. What is allowed is indeed scandalous and must be changed. But we must not lose sight of another important fact: the law firm, its founders, and employees actually did knowingly violate myriad laws worldwide, repeatedly. Publicly they plead ignorance, but the documents show detailed knowledge and deliberate wrongdoing. At the very least we already know that Mossack personally perjured himself before a federal court in Nevada, and we also know that his information technology staff attempted to cover up the underlying lies. They should all be prosecuted accordingly with no special treatment. In the end, thousands of prosecutions could stem from the Panama Papers, if only law enforcement could access and evaluate the actual documents. ICIJ and its partner publications have rightly stated that they will not provide them to law enforcement agencies. I, however, would be willing to cooperate with law enforcement to the extent that I am able”.[3]

As an apparently self-conscious and strong-willed whistleblower and moral crusader, John Doe then goes on to make the following case: “I call on the European Commission, the British Parliament, the United States Congress, and all nations to take swift action not only to protect whistleblowers, but to put an end to the global abuse of corporate registers. In the European Union, every member state’s corporate register should be freely accessible, with detailed data plainly available on ultimate beneficial owners. The United Kingdom can be proud of its domestic initiatives thus far, but it still has a vital role to play by ending financial secrecy on its various island territories, which are unquestionably the cornerstone of institutional corruption worldwide. And the United States can clearly no longer trust its fifty states to make sound decisions about their own corporate data. It is long past time for Congress to step in and force transparency by setting standards for disclosure and public access. And while it’s one thing to extol the virtues of government transparency at summits and in sound bites, it’s quite another to actually implement it. It is an open secret that in the United States, elected representatives spend the majority of their time fundraising. Tax evasion cannot possibly be fixed while elected officials are pleading for money from the very elites who have the strongest incentives to avoid taxes relative to any other segment of the population. These unsavoury political practices have come full circle and they are irreconcilable. Reform of America’s broken campaign finance system cannot wait. Of course, those are hardly the only issues that need fixing. Prime Minister John Key of New Zealand has been curiously quiet about his country’s role in enabling the financial fraud Mecca that is the Cook Islands. In Britain, the Tories have been shameless about concealing their own practices involving offshore companies, while Jennifer Shasky Calvery, the director of the Financial Crimes Enforcement Network at the United States Treasury, just announced her resignation to work instead for HSBC, one of the most notorious banks on the planet (not coincidentally headquartered in London). And so the familiar swish of America’s revolving door echoes amidst deafening global silence from thousands of yet-to-be-discovered ultimate beneficial owners who are likely praying that her replacement is equally spineless. In the face of political cowardice, it’s tempting to yield to defeatism, to argue that the status quo remains fundamentally unchanged, while the Panama Papers are, if nothing else, a glaring symptom of our society’s progressively diseased and decaying moral”.[4]

Finally, John Doe calls for a revolution: “Democratic governance depends upon responsible individuals throughout the entire system who understand and uphold the law, not who understand and exploit it. On average, lawyers have become so deeply corrupt that it is imperative for major changes in the profession to take place, far beyond the meek proposals already on the table. To start, the term ‘legal ethics’, upon which codes of conduct and licensure are nominally based, has become an oxymoron. Mossack Fonseca did not work in a vacuum—despite repeated fines and documented regulatory violations, it found allies and clients at major law firms in virtually every nation. If the industry’s shattered economics were not already evidence enough, there is now no denying that lawyers can no longer be permitted to regulate one another. It simply doesn’t work. Those able to pay the most can always find a lawyer to serve their ends, whether that lawyer is at Mossack Fonseca or another firm of which we remain unaware. What about the rest of society? The collective impact of these failures has been a complete erosion of ethical standards, ultimately leading to a novel system we still call Capitalism, but which is tantamount to economic slavery. In this system—our system—the slaves are unaware both of their status and of their masters, who exist in a world apart where the intangible shackles are carefully hidden amongst reams of unreachable legalese. The horrific magnitude of detriment to the world should shock us all awake. But when it takes a whistleblower to sound the alarm, it is cause for even greater concern. It signals that democracy’s checks and balances have all failed, that the breakdown is systemic, and that severe instability could be just around the corner. So now is the time for real action, and that starts with asking questions. Historians can easily recount how issues involving taxation and imbalances of power have led to revolutions in ages past. Then, military might was necessary to subjugate peoples, whereas now, curtailing information access is just as effective or more so, since the act is often invisible. Yet we live in a time of inexpensive, limitless digital storage and fast internet connections that transcend national boundaries. It doesn’t take much to connect the dots: from start to finish, inception to global media distribution, the next revolution will be digitized. Or perhaps it has already begun”.[5]

[1] “Panama Papers Source Offers Documents To Governments, Hints At More To Come” ICIJ. https://panamapapers.icij.org/20160506-john-doe-statement.html.

[2] “Panama Papers Source Offers Documents To Governments, Hints At More To Come”.

[3] “Panama Papers Source Offers Documents To Governments, Hints At More To Come”.

[4] “Panama Papers Source Offers Documents To Governments, Hints At More To Come”.

[5] “Panama Papers Source Offers Documents To Governments, Hints At More To Come”.

Sunday Surprise: The Panama Papers

‘Governments across the world began investigating possible financial wrongdoing by the rich and powerful following a leak of documents from a Panamanian law firm. The documents allegedly show how clients avoided tax or laundered money. The documents detailed schemes involving an array of figures from friends of Russian President Vladimir Putin to relatives of the prime ministers of Britain, Iceland and Pakistan and as well as the president of Ukraine. Australia, Austria, Brazil, France and Sweden were among countries which said they had begun investigating the allegations. The documents were leaked to the International Consortium of Investigative Journalists and more than 100 other news organizations. Published on Apr 4, 2016’.

The funny thing is that the name Putin keep on being bandied about (even by the Chinese CCTV), in spite of the fact that the name does not seem to appear in the leaked papers . . . close associates. Meanwhile, David Cameron’s father is directly implicated as well as a host of other politicians from across the world. The International Consortium of Investigative Journalists (ICIJ) puts it like this: “Files reveal the offshore holdings of 140 politicians and public officials from around the world” . . . “Current and former world leaders in the data include prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia” . . . “More than 214,000 offshore entities appear in the leak, connected to people in more than 200 countries and territories” . . . “Major banks have driven the creation of hard-to-trace companies in offshore havens”.[1] Still, the ICIJ also talks about “associates of Russian President Vladimir Putin” . . . . and adding that the “cache of 11.5 million records shows how a global industry of law firms and big banks sells financial secrecy to politicians, fraudsters and drug traffickers as well as billionaires, celebrities and sports stars. These are among the findings of a yearlong investigation by the International Consortium of Investigative Journalists, German newspaper Süddeutsche Zeitung and more than 100 other news organizations. The files expose offshore companies controlled by the prime ministers of Iceland and Pakistan, the king of Saudi Arabia and the children of the president of Azerbaijan. They also include at least 33 people and companies blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran. One of those companies supplied fuel for the aircraft that the Syrian government used to bomb and kill thousands of its own citizens, U.S. authorities have charged”, and adding that the “leaked data covers nearly 40 years, from 1977 through the end of 2015. It allows a never-before-seen view inside the offshore world — providing a day-to-day, decade-by-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues. Most of the services the offshore industry provides are legal if used by the law abiding. But the documents show that banks, law firms and other offshore players have often failed to follow legal requirements that they make sure their clients are not involved in criminal enterprises, tax dodging or political corruption. In some instances, the files show, offshore middlemen have protected themselves and their clients by concealing suspect transactions or manipulating official records”.[2]

But, the journalist Clark Mindock and David Sirota now also reveal that “U.S. President Barack Obama and then-Secretary of State Hillary Clinton pushed for a Bush administration-negotiated free trade agreement that watchdogs warned would only make the situation worse”, “[y]ears before more than a hundred media outlets around the world released stories Sunday exposing a massive network of global tax evasion detailed in the so-called Panama Papers”.[3] These statements would indicate that, not Putin but rather, Obama should be wary of the recent leak . . . Mindock and Sirota explain that “[s]oon after taking office in 2009, Obama and his secretary of state — who is currently the Democratic presidential front-runner — began pushing for the passage of stalled free trade agreements (FTAs) with Panama, Colombia and South Korea that opponents said would make it more difficult to crack down on Panama’s very low income tax rate, banking secrecy laws and history of noncooperation with foreign partners. Even while Obama championed his commitment to raise taxes on the wealthy, he pursued and eventually signed the Panama agreement in 2011. Upon Congress ratifying the pact, Clinton [aka the Hillerator] issued a statement lauding the agreement, saying it and other deals with Colombia and South Korea ‘will make it easier for American companies to sell their products.’ She added: ‘The Obama administration is constantly working to deepen our economic engagement throughout the world, and these agreements are an example of that commitment.’ Critics, however, said the pact would make it easier for rich Americans and corporations to set up offshore corporations and bank accounts and avoid paying many taxes altogether”.[4]

And then, some of the names appearing in the leaks are Sergi Roldugin, Arkady Rotenberg and Boris Rotenberg, (apparently close friends of Russia’s President), and the soccer star Lionel Messi and the Spanish director Pedro Almodovar (and brother Agustin Almodovar Caballero) and the Argentina President Mauricio Macri as well as Ivan Zamorano, a retired Chilean and Real Madrid soccer player, but also the actor Jackie Chan and the already-disgraced Michel Platini, the former President of the Union of European Football Associations (UEFA), but also Juan Pedro Damiani, member of the FIFA Ethnics Committee and also an Argentine former soccer player with Manchester United, Gabriel Iván Heinze, in addition to the UK PM’s old man, Ian Cameron, as well as former Spanish King Juan Carlos I’s sister Pilar de Borbon, and a certain Daniel Muñoz, aide to former Argentina presidents Cristina Fernandez de Kichner and Nestor Kichner. And then there are also the names of the Prime Minister of Iceland, Sigmundur Davíð Gunnlaugsson, and Juan Armando Hinojosa, the “favorite contractor” of Mexican President Enrique Peña Nieto, as well as a certain Néstor Grindetti, Mayor of the Lanús, Argentina (a town with a population of 212,152) and João Lyra, Member of the Brazilian Chamber of Deputies, and Alfredo Ovalle Rodríguez, intelligence agency associate in Chile as well as Pedro Delgado, former Governor of the Central Bank of Ecuador. In addition to the name Riccardo Francolini, the former chairman of the state-owned Savings Bank in Panama, and César Almeyda, the Director of Peru’s National Intelligence Service. And then there is a former Venezuelan commander-in-chief of the army known as Victor Cruz Weffer, as well as Jesús Villanueva, the former Director of Venezuela’s state-owned oil and gas company PDVSA, as well as Idalécio de Oliveira, potential briber of Brazil’s President of the Chamber of Deputies Eduardo Cunha. Another name is that of Javier Molina Bonilla, a former advisor to Ecuador’s Director of the National Intelligence Secretariat Rommy Vallej, and César Rosenthal, son of former Honduran Vice President Jaime Rosenthal. And the names of two Argentinean businessmen also implicated in the 2015 FIFA corruption case, Hugo and Mariano Jinkis, and yet another professional soccer player, Leonardo Ulloa.[5] But for some strange reason there seem to be no names of big-time American Capitalists and/or philanthropists on the lists, no Gates of Buffet, for one thing. Or, as asked on the website Slashdot, “Where are the US politicians and businessm[e]n?”.

[6] 

[1] “Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption” ICIJ (03 April 2016). https://panamapapers.icij.org/20160403-panama-papers-global-overview.html.

[2] “Giant Leak of Offshore Financial Records Exposes Global Array of Crime and Corruption”.

[3] Clark Mindock and David Sirota, “Panama Papers: Obama, Clinton Pushed Trade Deal Amid Warnings It Would Make Money Laundering, Tax Evasion Worse” IBT (04 April 2016). http://www.ibtimes.com/panama-papers-obama-clinton-pushed-trade-deal-amid-warnings-it-would-make-money-2348076.

[4] Clark Mindock and David Sirota, “Panama Papers: Obama, Clinton Pushed Trade Deal”.

[5] “Panama Papers: Partial list of celebrities, government officials named in leak” Fox News Latino (04 April 2016). http://latino.foxnews.com/latino/news/2016/04/04/panama-papers-partial-list-celebrities-government-officials-named-in-leak/.

[6] “Panama Papers: Data Leak Exposes Massive Official Corruption” Slashdot (03 April 2016). https://politics.slashdot.org/story/16/04/03/2026258/panama-papers-data-leak-exposes-massive-official-corruption.

Counting the Cost – Black Monday: The great fall of China

‘This week, China, the world’s second largest economy suffered massive financial losses when trillions of dollars were wiped from the country’s stock markets. On Monday, Chinese stocks suffered their steepest fall in one day, with Shanghai’s main share index closing down at 8.49 percent. Dubbed ‘Black Monday,’ the effects were felt globally, with indices nosediving one after the other. Before Monday’s rout, more than $3.2 trillion had already been wiped off China’s stock market after investors, worried about slow growth, embarked on a selling frenzy. Chinese authorities have intervened by supporting stock prices, but despite spending some $200bn to stimulate the economy, Beijing has failed to stem the crisis. On Counting the Cost, we have always said that stock movements don’t tell the real story, and that the link between markets and the real economy is broken. On this week’s episode, we speak to Steve Tsang, a professor of Contemporary Chinese Studies at the University of Nottingham, to discuss how China’s economy is divorced from the real economy. Since China’s devaluation of the yuan earlier this month, an estimated $5 trillion has been wiped off global stock markets. Jolting financial markets, emerging and developing nations have been the hardest hit and have seen their currencies fall to multi-year lows. Albert Essien, the CEO of the pan-African bank EcoBank joins the programme to discuss the impact on African economies. Published on Aug 30, 2015′.