The Form of Money

The Power Elite by C. Wright Mills, 1956, Excerpts

There is no free and wide debate of military policy or of policies of military relevance. It is in line with a mass society for manipulation to replace explicitly debated authority, as well as with the fact of total war in which the distinction between soldier and civilian is obliterated. The military manipulation of civilian opinion and the military invasion of the civilian mind are now important ways in which the power of the warlords is steadily exerted. The content of this great effort reveals its fundamental pose: to define the reality of international relations in a military way, to portray the armed forces in a manner attractive to civilians, and thus to emphasize the need for the expansion of military facilities.

The younger are growing up in the atmosphere of the economic-military alliance and are being intensively and explicitly educated to carry it on. Religion, virtually without fail, provides the army at war with its blessings, and recruits from among its officials the chaplain, who in military costume counsels and consoles and stiffens the morale of men at war.

08 December 2011

Elite Law and Finance

The Power Elite by C. Wright Mills, 1956, Excerpts

The very rich have used existing laws, they have circumvented and violated existing laws, and they have had laws created and enforced for their direct benefit. The inner core of the power elite includes men of the higher legal and financial type from the great law factories and investment firms, who are professional go-betweens of economic, political and military affairs, and who thus act to unify the power elite. By the nature of their work, they transcend the narrower milieu of any one industry, and accordingly are in a position to speak and act for the corporate world.

The corporation lawyer and the investment banker perform the functions of the go-between effectively and powerfully. The corporation lawyer is a key link between the economic and military and political areas; the investment banker is a key organizer and unifier of the corporate world and a person well versed in spending the huge amounts of money the American military establishment now ponders. When you get a lawyer who handles the legal work of investment bankers, you get a key member of the power elite.

06 December 2011

Elite Prestige

The Power Elite by C. Wright Mills, 1956, Excerpts

Prestige is the shadow of money and power. Since the men of the higher political, economic, and military circles are an elite of money and power, they accumulate a prestige that is considerably above the ordinary; all of them have publicity value and some of them are downright eminent; increasingly, by virtue of their position and by means of conscious public relations, they strive to make their names notable, their actions acceptable, their policies popular, to become national celebrities.

The celebrities are The Names that need no further identification. Wherever the celebrities go, they are recognized, and moreover, recognized with some excitement and awe. Whatever they do has publicity value. More or less continuously, over a period of time, they are the material for the media of communication and entertainment. These national means of mass communication have been the channels through which those at the top reach the underlying population.

As military men have become more powerful during the wars and during the war-like interludes between, they too have joined the new national prestige scheme. They derive such importance as they have from the simple fact that violence is the final support of power and the final resort of those who would contest it. Only when war threaten international order do the generals and admirals come to be recognized for what at all times they are: indispensable elements of the order of power that prevails within and between the national states of the world.

04 December 2011

Elite Clique

The Power Elite by C. Wright Mills, 1956, Excerpts

Those who sit in the seats of the high and the mighty are selected and formed by the means of power, the sources of wealth, and the mechanics of celebrity. As the requirements of the top places in each of the major hierarchies become similar, the types of men occupying these roles at the top – by selection and by training in the jobs – become similar. That it is a fact revealed by the heavy traffic that has been going on between the three structures, often in very intricate patterns.

The chief executives, warlords, and politicians came into contact with one another in an intimate, working way during World War II; after that war ended, they continued their associations, out of common beliefs, social congeniality, and coinciding interests. Noticeable proportions of top men from the military, the economic, and the political worlds have during the last fifteen years occupied positions in one or both of the other worlds. They have come to look upon the government as an umbrella under whose authority they do their work.

The men of the higher circles are not representative men; their high position is not a result of moral virtues; their fabulous success is not firmly connected with meritorious ability. They are not men selected and formed by a civil service that is linked with the world of knowledge and sensibility. They are not men shaped by nationally responsible parties that debate openly and clearly the issues this nation now so unintelligently confronts. They are not men held in responsible check by plurality of voluntary associations which connect debating publics with the pinnacle of decision.

03 December 2011

Elite War Economy

The Power Elite by C. Wright Mills, 1956, Excerpts

The story of the American economy since the Civil War is the story of the creation and consolidation of this corporate world of centralized property. During World War II, the merger of the corporate economy and the military bureaucracy came into its present-day significance. Within the span of one generation, America has become the leading industrial society of the world, and at the same time one of the leading military states. Without the industrial economy, the modern army could not exist; it is an army of machines.

Since World War II, the general direction of pure scientific research has been set by the military. Scientific and technological development has increasingly become part of the military order, which is now the largest single supporter and director of scientific research. Some universities are financial branches of the military establishment.

The military has become enlarged and decisive to the shape of the entire economic structure; and, moreover, the economic and the military have become structurally and deeply interrelated, as the economy has become a seemingly permanent war economy; and military men and policies have increasingly penetrated the corporate economy.

American capitalism is now in considerable part military capitalism, and the most important relation of the big corporation to the state rests on the coincidence of interests between military and corporate needs. Within the elite as a whole, this coincidence of interest between the high military and the corporate chieftains strengthens both of them and further subordinates the role of the merely political men.

Nato

29 November 2011

Obama: “biggest tax scam on record”

http://www.thenation.com/blog/161338/us-uncut-yes-men-bust-corporate-tax-dodgers-cayman-islands

Obama

05 Jan 2008

"You've got a building in the Cayman Islands that supposedly houses 12,000 corporations. That's either the biggest building or the biggest tax scam on record."

US Uncut, Yes Men to Bust Corporate Tax Dodgers in Cayman Islands, June 18

10 Jun 2011

The activism groups behind a widely circulated (and false) AP report stating GE would return its entire 2010 tax refund of $3.2 billion to the US Treasury appear to be getting the band back together. US Uncut and The Yes Men are planning another event to draw attention to the massive problem of corporate tax dodging, but this time they’re taking their activism directly to the source of America’s lost revenue: the Cayman Islands.

One of Obama’s stock applause lines was a true-life story he would tell about a single building in the Cayman Islands which houses 12,000 corporations. "That's either the biggest building,” then-Senator Obama would say, “or the biggest tax scam on record.” Cue wild applause. The building Obama was referring to is called the Ugland House in George Town, and it actually houses about 19,000 registered companies. Since being elected, however, President Obama has done little to stem the problem of corporate tax havens. Legislative paralysis is precisely why US Uncut and The Yes Men are planning this action to draw the American people’s attention back to the problem of tax dodging.

http://theyesmen.org/

Ugland House

28 November 2011

Tax Havens Shift Tax Burdens

Treasure Islands by Nicholas Shaxson, 2011, Excerpts

In the large economies, tax burdens are being shifted away from mobile capital and corporations onto the shoulders of ordinary folks. The rich have been paying less, and everyone else has been forced to take up the slack. Tax havens overturn the healthy dynamics by providing escape routes for their elites. The secrecy jurisdictions are the biggest culprits.

27 November 2011

Tax Haven Investments

http://www.bbc.co.uk/news/world-asia-pacific-13813688

Treasure Islands by Nicholas Shaxson, 2011, Excerpts

The two biggest sources of foreign investment into China in 2007 were not Japan or the United States or South Korea but Hong Kong and the British Virgin Islands. Similarly, as of 2009 the biggest source of foreign investment into India, at over 43 percent of the total, is the treaty haven of Mauritius, a rising star in the offshore system. It also specialized in channeling Chinese investments into Africa’s mineral sectors. Mauritius illustrates how the British spiderweb is no imperial relic but a modern and self-renewing system. Although French-speaking, the country has a long history of British colonial involvement. Mauritius set up its offshore center in 1989 under the tutelage of experts mostly from the City of London, Jersey, and the Isle of Man. The Netherlands is another major European tax haven. In 2006, while the Irish musician Bono browbeat Western taxpayers to boost aid to Africa, his band, U2, shifted its financial empire to the Netherlands to cut its own tax bill.

Chinese officials stole $120 billion, fled mainly to US

2011 Jun 17

Thousands of corrupt Chinese government officials have stolen more than $120bn (£74bn) and fled overseas, mainly to the US, according to a report released by China's central bank. The officials used offshore bank accounts to smuggle the funds, according to the study posted on the People's Bank of China website this week but which has since been removed. It said the officials smuggled about 800 billion yuan into the US, Australia, Canada and Holland through offshore bank accounts or investments, like property or collectables. The stolen funds were covered up by disguising them as business transactions by establishing private companies to receive the money transfers.

26 November 2011

Tax Haven Secrecy

Treasure Islands by Nicholas Shaxson, 2011, Excerpts

Tax havens don’t just offer an escape from tax. They also provide wealthy and powerful elites with secrecy and all manner of ways to shrug off the laws and duties that come along with living in and obtaining benefits from society – taxes, prudent financial regulation, criminal laws, inheritance rules, and many others. Offering these escape routes is the tax havens’ core line of business. It is what they do.

Offshore secrecy shifts control over information and the power that flows from it toward the insiders, helping then take the cream and use the system to shift the costs and risks onto the rest of society.

These zones of ultra-freedom for financial interests are so often repressive places, viciously intolerant of criticism. The offshore world is steeped in a pervasive inverted morality: Turning a blind eye to crime and corruption has become good business practice: a way of attracting money; while alerting forces of law and order to wrong doing has become the punishable offense. Here in the tax havens, rugged individualism has morphed into disregard, even a contempt, for democracy and for societies at large.

24 November 2011

City of London – Tax Haven Mothership

http://www.bbc.co.uk/news/business-16505795

Treasure Islands by Nicholas Shaxson, 2011, Excerpts

This network of offshore satellites does several things for the City of London. First, it gives it a global reach. These jurisdictions funnel money through to London. Second, the spiderweb lets the City get involved in business that might be forbidden in Britain, giving the financiers in London sufficient distance from wrongdoing to allow plausible deniability. By the time the money gets to London, it has been washed clean.

Offshore Magic Circle: Its members are made up of highly profitable multijurisdictional law firms mostly originating in Britain or its Overseas Territories and Crown Dependencies: a smartly dressed regiment of accountants, lawyers, and bankers forming a private global infrastructure that, in league with captured legislatures in the secrecy jurisdictions, makes the whole system work.

City ‘to be offshore currency market for China’

11 Jan 2012

Talking to bankers and lawyers, there is growing optimism that the City of London will join Hong Kong as an offshore center where the Chinese currency, the Renminbi, can be traded - and that an announcement on all this may not be far off. The RMB would be on its way to becoming a proper globally traded currency, commensurate with China's status as the world's second biggest economy.

22 November 2011

Tax Haven Structure

Treasure Islands by Nicholas Shaxson, 2011, Excerpts

The world tax havens can be divided roughly into four groups: a set of continental European havens, a British zone of influence centered in the City of London and parts of Britain’s former empire, a zone of influence focused on the United States, and a fourth category holding unclassified oddities like Somalia and Uruguay.

Each jurisdiction offers one or more offshore specialties. Each attracts particular kinds of financial capital, and each develops a particular infrastructure of skilled lawyers, accountants, bankers, and corporate officers to cater to their specific needs.

The drug smugglers, terrorists, and other criminals use exactly the same offshore mechanisms and subterfuges – shell banks, trusts, dummy corporations, and so on – that corporations use. Offshore connects the criminal underworld with financial elites and binds them together with multinational corporations and the diplomatic and intelligence establishments. Offshore drives conflict, shapes our perceptions, creates financial instability, and delivers staggering rewards to les grands, the people who matter. Offshore is how the world of power now works.

18 November 2011

Expropriating Wealth

Citigroup Plutonomy Report, 2005, Excerpts

Organized societies have three ways of expropriating wealth - through the revocation of property rights, through the tax system, or to slow down the rate of wealth creation. The three levers governments and societies could pull on to end plutonomy are benign. Property rights are still intact and taxation policies are neutral to favorable.

There seems little threat from the first of these challenges: blatant expropriation of property by governments. There are few examples of governments changing the rules in the plutonomies and engaging in widespread nationalization, or asset re-distribution. Governments have learnt the lessons of regulatory certainty and the sanctity of property rights.

The more likely means of expropriation is through the tax system. Corporate tax rates could rise and personal taxation rates could rise. Dividend, capital-gains, and inheritance tax rises would hurt the plutonomy. In the U.S., the current administration’s attempts to change the estate tax code and make permanent dividend tax cuts plays directly into the hands of the plutonomy.

So long as economies continue to grow, there is little threat to Plutonomy.

17 November 2011

Plutonomy Limits

Citigroup Plutonomy Report, 2005, Excerpts

Concentration of wealth and spending in the hands of a few has its limits. There are signs around the world that society is unhappy with plutonomy. If voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich. The population at large might still endorse the concept of plutonomy, but feel they have lost out to unfair rules. This is a threat more clearly felt during periods of falling wealth. A collapse in wealth in the plutonomies, felt by the masses, could easily raise the prospects of anti-plutonomy policy.

The “global imbalances” is not as dangerous and hostile as one might think. A more balanced view acknowledges these nasty imbalances, but predicts a gentle, gradual dollar decline, a yuan revaluation, and the hope that Asians and European consumers will embark on a spending journey, righting the world.

16 November 2011

Plutonomy Drivers

Citigroup Plutonomy Report, 2005, Excerpts

What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains, creative financial innovation, capitalist-friendly cooperative governments, an international dimension of immigrants and overseas conquests invigorating wealth creation, the rule of law, and patenting inventions. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time.

12 November 2011

Plutonomies and the Rest