Why thieves and crooks now rule the world
BREAKTHROUGH - Elfren S. Cruz (The Philippine Star) - June 20, 2019 - 12:00am

In his book, Money Land: Why Thieves and Crooks Now Rule the World, Oliver Bullough writes that the biggest crooks in the world are not robbers or even drug lords but politicians, businessmen and money men who siphon trillions of dollars from Third World countries like the Philippines, to rich destinations like the United States and the United Kingdom. He writes about the “obscene dark side of globalised finance  ... a shadow realm of oligarchs and gangsters with unimaginable power and zero accountability.”

Bullough writes: “Once upon a time if an official stole money in his home country, there wasn’t much he could do with it. He could buy himself a new car, or  build himself a new house, or give it to his friends and relatives so that was more or less it. His appetites  were limited by the fact that the local market could not absorb endless amounts of money. If he kept stealing after that, the money would just build up in his house until he had no rooms left to put it or it was eaten by mice.

Offshore finance changes that. Some people call shell companies getaway cars for dodgy money, but when combined with the modern financial system – they’re more like magical teleporter boxes. If you steal money, you no longer have to hide it in a safe where the mice can get at it. Instead you stash it in a magic box, which spirits it away at the touch of a button, out of the country, to any destination you choose. It’s the financial equivalent of never feeling full no matter how much you eat. It’s no wonder officials become such gluttons, since there is now no limit on how much they can steal, and therefore no limit on how much they can spend...If they want a house, they can send the money to New York or London.”

The damage this does to the countries that lose the money is clear. This is not limited just to corrupt politicians. This may sound like very simple economics; but, consider this proposition. Most businessmen believe that keeping wages low is beneficial to an economy. In the meantime, any increase in profitability results in higher income for the rich. However, any increase in earnings for the lower and middle classes will result in increasing their purchasing power. The lower and middle classes will spend increased earnings in their home country which will help stimulate the economy.

On the other hand, a large portion of additional income for the very rich will result in increasing their expenditures in foreign countries in the form of purchases of foreign assets like real estate, foreign travel, educational expenses in foreign schools and so forth. So the very rich generate wealth in their home country and then send a portion of that wealth abroad. The lower and middle classes behave exactly the opposite. Whatever income they generate in their home country is spent in their home country. In fact, OFWs generate wealth in other countries and then send it back to their home country. Common sense economics would, therefore, tell us that the best way to improve inclusive and sustainable growth is by increasing the earnings of the lower and middle classes. 

In his book, Bullough begins by describing Money Land , how it “conceals” wealth , and how small jurisdictions like the Caribbean Islands, have made a living crafting their laws to facilitate wealth concealment. He describes, with a lot of case studies, what it means when the powerful take advantage of Money Land to steal from their home country.

He describes how Money Land  defends those who exploit its structures and wealth and how it prevents stolen wealth being recovered by its true owners. He states: “Money Land can let you get away with murder, and it has laid out how the citizens of  Money Land like to spend the cash they hide in it – the clothes, the property, the art, etc. – and what their increasingly outrageous spending habits are doing to the world. The effects of their spending are so extreme  that there is now a whole field of study, called plutonomy, devoted to it.

Plutonomy is used to describe economies “...where economic growth is powered by and largely consumed by the wealthy few.” According to a group of Citigroup analysts: “The share of the very rich in national income of plutonomies had become so large that what is going on in these economies and in their relation with other economies cannot be properly understood any more with reference to the average consumer...The rich are so rich that their behavior – be it negative savings, or just very low consumption of oil as a percentage of their income – overwhelmed that of the average consumer.”

Bullough warns that the real threat to liberal democracy is “unaccountable money... Offshore bandits are looting the world and this looting is undermining democracy and driving inequality.” Even the Citibank analysts warned ”...it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich.”

Creative writing classes for kids and teens

Young Writers’ Hangout on June 22 with Yvette Fernandez and  June 29 for adult writers with Jack Wigley at Fully Booked BGC.  For details and registration,  email writethingsph@gmail.com.

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Email: elfrencruz@gmail.com

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