The homes and spaces of wealthy elites are a crucial missing part of the recent tax avoidance debates
Recent revelations about tax avoidance have highlighted an important aspect of daily economic life – the role of space or, more specifically, the non-spaces of jurisdictions deemed to be ‘off-shore’ that are a key element of the financial system. As sociologists and economists have long pointed out – the global economy is a space of flows and finance and this generates a range of risks and interconnections that challenge the ability of individual countries to set rules that might somehow check or draw benefits from these flows. Tax avoidance and evasion highlight one such risk, the search by those with money (both individuals and corporations) to get the best investment deals by moving their money to places where taxes are lower or from which they can conduct business anonymously. Few governments want to challenge these activities when they benefit their own coffers or institutions.
The revelations in the Panama Papers that our Prime Minister and many others sought these methods to protect and grow their personal fortunes spoke volumes about an elite with one toe (or a full limb, more likely) planted somewhere outside of the system that they lead. Space matters to money since being offshore has a number of benefits that those with a greater sense of social responsibility or smaller purses are unlikely to want, or be able, to pursue. If taxes are the sign of a civilized society what does it say that those governing it are happy to play with the rules under which these essential revenues are generated?
In all of the recent debates there is plenty to be angry about. Money laundering by global criminal enterprises, the glacial pace towards moves to name tax avoiders, the extent to which finance is held in thrall by political life, and the disconnection of finance from the essential role of being in service to society and its economy are just a few such reasons for resentment. But something is missing here and to find it we should turn our attention a little closer to home.
We should try to begin to shine a light on the hidden yet very much ‘onshore havens’ of the neighbourhoods, enclaves and gated communities of the elites themselves. Here the picture is not only one of profound economic vitality but of affluent lives unimpinged by the sight of social distress, scarcity or competition for life’s fundamentals. London’s commuter belt, and that of Manchester, Sheffield, Birmingham among others, offers an archipelago of electronic cottages, barriered homes, modern bunkers and Goldfinger lairs that protect the lives of those avidly looking-after their fortunes while explaining, so very patiently, how important it is that property and corporate taxation should remain as low as possible. We need to formulate the kind of arguments capable of reconnecting these social escapees from their homes, pretty towns and socially homogenous networks to the lives of the damaged and excluded, not least because their fortunes are so clearly interconnected with a vocal call for an assault on public spending which is justified by a lack of public resources.
In such a project we might begin by understanding that part of what so many consider to be the immorality and corrupting of upper middle-class and elite life is shaped by the places and spaces where they retreat behind gates and high walls. Some years ago a pair of social philosophers made the argument that the sense we have of the reality around us is deeply influenced by the social groups we are part of. They suggest that it is who we associate with, the peers and networks that form our daily social life, that shape our values, our impression of the structure of social life (for example, whether we think social mobility is an open and fluid process or one shaped by significant inequality and a rigged system) and its relative rules. Apply this argument to the lives of the super-rich and the spaces they inhabit and we begin to see how working within particular institutions or being faced with the pressures and routines of life in, say banking, leafy suburbs or among the rich themselves may help to drive a worldview that is at once mercenary and immune to questions of inequality and social distress. These concerns almost literally have no reality in the social lives of such individuals operating in these groups and spaces, but we can perhaps go further. Can we begin to argue that there is something essentially immoral and socially problematic about allowing large enclaves and socially homogenous areas to arise in the first place? These arguments are applied to planning applications for, god forbid, public housing and appear in calls to produce socially diverse areas – so why do we not have the same ideas and obligations for areas inhabited by the wealthy? Perhaps social diversity is something that lesser folk appear to have to endure, despite pronouncements from on high asking us to do our bit.
In this kind of society it is not the rich who are the robbers, but the workshy and immigrants who are viewed as criminals or scroungers. Meanwhile tax evasion and financial secrecy that enables criminal activity and personal gain at the expense of others are seen as pragmatic paths to getting ahead in life. We need to understand that social norms about what is acceptable are shaped by the spaces and groups we live in and that they help to produce the kind of callous and self-serving ideas of the wealthiest. Those with money want to keep a larger share of it while helping others elsewhere to be seen as a threat to economic prudence and flourishing.
The depths of the revelations about how elites have worked to circumvent the rules of their ‘local’ tax offices have helped to rebalance the distribution of information between the have-nots and have-lots (but who wish to hide this fact). Thinking about a simple binary division between the 99% and 1%, for all its undoubted simplicity, helped many to understand the extent of wealth concentration at a time of hand-wringing austerity. The tax haven debacle has further highlighted and exposed how a rigged system was not only invested in by political leaders who spoke of being in this together, but also who have shown little interest in doing something about offshore investments and laundering. Well, now we know why.