The Panama Papers confirm that the world’s elite cheat, lie, and steal. Will the masses finally do something about it?
- By Fredrik deBoerFredrik deBoer is a writer and academic.
Perhaps the simplest thing to say about the “Panama Papers” is something most of us already know: The rich are not like you and me.
The deepening scandal, born from the leak of a vast trove of documents from the Panamanian law firm Mossack Fonseca, has inspired a curious mixture of shock and apathy. The documents, which show the extraordinary lengths the global elite have gone to in order to shield their wealth from taxation, are at once big news and old hat. They provide the nasty details of the kind of business most savvy people assume goes on all the time. You and I pay our taxes; the wealthy find ways to avoid them. For some, reading about the Panama Papers will feel like being told by your parents that Santa isn’t real: merely the final confirmation of a suspicion that you have harbored for a very long time. The game is rigged, and unless you are part of the global one percent, it isn’t rigged to help you.
Were our system healthier, our governments and institutions more responsive to public demand, our people more convinced that the system worked the way it’s intended, our courts and legislative bodies more conducive to securing justice at the expense of the moneyed and the connected, we could expect mass indictments, reform of tax and trade law, and a wide-scale rethinking of what, exactly, we’re globalizing in the age of globalization. A healthy social system would mark this moment as a historical turning point. But this is not a healthy social system, and most of the people living within it know that, and so few of us can muster much in the way of righteous indignation. This is depressing; it is also rational.
That isn’t to dismiss the importance of the leak or to attempt to snuff out hopes that it might lead to prosecution, though the precedent set by the near-total absence of criminal charges following the 2008 financial crisis is not encouraging. Rather, the point is simply that while this leak should inspire outrage and, I naively hope, change, the actual information provided has not so much opened us to a new world of understanding as merely enabled us to see the details of a world that we already know far too well. That the super-rich utilize shell companies and tax havens, that they employ shadowy entities to help them hide their finances from government scrutiny, that they play by an entirely separate set of rules than the rest of us — these are the banal assumptions of anyone who has even a loose grasp of global capitalism.
Still, the sheer diversity of the players involved is remarkable. The roster is thick with international bad actors, present and past, who we already knew full well were nefarious: Vladimir Putin, Muammar al-Qaddafi, Hosni Mubarak. But sprinkled among them — and there are surely more nuggets to be found — are prominent figures from the world of international politics, sports, and entertainment whose reputations had previously been intact. The martial arts star Jackie Chan shows up in the documents, which allegedly demonstrate his connection to six separate companies involved with Mossack Fonseca. So does Lionel Messi, the Argentinian soccer player widely regarded as the world’s best.
Nothing in particular unites the various people and groups found within these documents, except for the only things that matter: their incredible wealth and their incredible desire to keep as much of it as possible. This is the new cosmopolitanism, the 21st-century international community, a community of those with the resources to belong to no nation. If the traditional symbol of globalization has been the closure of a factory in Ohio and the opening of one in Bangladesh, the new symbol might be entirely digital, a computer in Panama wiring funds between, say, London and the Bahamas, on behalf of a Russian billionaire who made his fortune in Saudi Arabia. The very idea of countries dissolves into an impossibly complex digital network of shady dealings, undertaken by those with no particular loyalty to country and plenty to themselves. Even referring to the country of origin of the super-rich seems quaint. The rich are their own nation now.
There are obvious resonances with international political conditions. For years now, discontent and instability have been a constant of world news. The Arab Spring, anti-immigration animus in Europe, left-wing protest movements in the United States, heated elections in Greece, strikes in China, anti-Muslim violence in Myanmar, and on and on. Anger appears to be the default state of the world political scene. As this list shows, this anger has not congealed into a definable political direction. Instead, political parties and leaders the world over, both principled and opportunistic, seek to take advantage of a profound and loud message that is being expressed by regular people: Something has gone badly wrong. Scandals like the Panama Papers provide further fuel for these feelings, demonstrating to the global 99 percent that their feelings of being cheated are justified.
In the United States, the spirit of civil unrest has played out most obviously in the current presidential primaries. Both major political parties are facing unexpected insurgent campaigns for their presidential nominations. In the Democratic Party, the self-declared socialist Bernie Sanders harries establishment favorite Hillary Clinton from the left, taking her to task, among other things, for her coziness with the financial industry titans who were directly responsible for the devastating global financial crisis of 2007 and 2008. In the Republican Party, Donald Trump has effortlessly stoked nativist sentiment, whipping large crowds into a frenzy with anti-immigrant rhetoric and opportunistic application of economic populism. Against both of these outsider campaigns, the establishment parties are pushing back hard, hoping to maintain their stranglehold on our political process. Sanders and Trump could hardly be further apart in terms of their ideology and temperament, but both embody a political moment in which American voters are bent on change.
Yet despite this sense of agitation and unhappiness with the status quo, neither of these insurgent candidates stands a particularly good chance of becoming president. The establishment parties are flexing their muscles. On the Democratic side, though Sanders has racked up impressive wins, he remains a long shot to earn the nomination, in part thanks to the (patently undemocratic) caucus and “superdelegate” systems. And though Trump still dominates the delegate count, his momentum has flagged lately, and GOP leadership openly plots how to deny him the nomination at the national convention. For as much as the American voter might favor dramatic change, it appears that the elites who run the country maintain their control of the system.
That same sense of the inevitability of elite domination attends the international discussion of the Panama Papers. For as much controversy as will surely follow, and as much anger as I’m observing in reaction to the story, there is another palpable feeling attending these discussions: exhaustion. The seemingly permanent hold that the elite have on power inspires anger, but it also inspires weariness. We can be sure that some small number of figures implicated by the Mossack Fonseca documents will see an indictment; we can be equally as sure that the vast majority of the wealthy figures named will continue to enjoy all of their old privileges. The only thing that seems more certain than the continuing outrages brought about by the malfeasance of elites is their ability to avoid any consequences for those outrages.
It’s an old saw to say that political ignorance breeds political impotence. Knowledge is power, goes the propaganda. Concepts like false consciousness depend on the idea that average citizens lack understanding about the economic and social systems around them and thus are incapable of changing them. Yet I can’t help but feel that the truth is darker: Knowledge of how deeply corrupt the rich are, and how inoculated they are from the consequences of that corruption, makes meaningful action seem like an impossibly difficult task. Solutions to the vast inequalities in wealth and power that grip the world seem either insufficient to create change, too sweeping to become reality, or both at the same time. Thomas Piketty, whose 2014 book on the inevitability of wealth inequality under capitalism caused a sensation, argued that perhaps as much as 10 percent of world GDP goes unaccounted for in taxation thanks to schemes like those outlined in the Panama Papers. Yet his solution in that text, an international wealth tax, seems at once feeble in what it attempts and simultaneously far too ambitious to become actual reality.
The situation is not hopeless. Progress is possible. Look at Iceland, where, as I write, the prime minister has just announced his resignation, in the face of fierce public protest over financial machinations he had tried hard to keep secret. But to move forward, we need to recognize how badly things have gone. In his 2012 book, Twilight of the Elites, on the collapse of public faith in institutional authority, Christopher Hayes writes, “We now operate in a world in which we can assume neither competence nor good faith from the authorities, and the consequences of this simple, devastating realization is the defining feature of American life.”
As the Panama Papers make clear, this is hardly a condition unique to the United States. With the passage of time, the title of Hayes’s book has come to seem naive. For as surely as elites have failed us, their grasp on power seems as sure as ever. Our trust in elites may be dying, but they seem quite capable of navigating a world where no one expects to trust them. What we are confronted with is a world in which this communal understanding that our elites have cheated, lied to, and failed us makes no difference to their ability to hold onto power. We expect this from them; we would be more surprised if they weren’t cheating the rest of us. The question is, will anger at the corruption and failure of our elites dissolve into apathy and exhaustion, as people come to believe there truly is no alternative? Or will it explode?
Photo credit: MARIO TAMA/Getty Images