Panama Papers: Plutocracy, Kleptocracy, or Both?

plutocracy  [ploo-tok-ruh-see]

noun, plural plutocracies.

  1. the rule or power of wealth or of the wealthy.
  2. a government or state in which the wealthy class rules.
  3. a class or group ruling, or exercising power or influence, by virtue of its wealth.

kleptocracy  [klep-tok-ruh-see]

noun, plural kleptocracies.

  1. a government or state in which those in power exploit national resources and steal; rule by a thief or thieves.

1815-20; klepto- (combining form of Greek kléptēs thief) + -cracy

Related forms:

kleptocrat [klep-tuh-krat] (Show IPA), noun

kleptocratic [klep-tuhkrat-ik] (Show IPA), adjective

[Dictionary.com Unabridged, Based on the Random House Dictionary, © Random House, Inc. 2016.]

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Never begin an essay with a dictionary definition. It is bad form. You should assume the readers of your work understand the words you write.

Well, the Panama Papers may provide us an excuse to violate that rule. In fact, I offer here two dictionary definitions, because the two words involved are so close in meaning. Is a plutocracy also a kleptocracy? Are most societies run by the wealthiest members also societies in which the rulers are thieves? Given revelations published in the “Panama Papers,” and given what many people have suspected all along, that would appear to be the case.

Who Rules?

In various posts on this site I have used the word plutocracy to describe the fact that in the industrialized world, if not the rest of the world as well, the wealthy class rules politics, culture, and the economy. We maintain a façade of democracy, but really…who rules? Ask William Domhoff,[i] who has studied the ruling class in America since before I was in graduate school in the 1960s. Domhoff cleverly got into the social circles of the very rich and observed their behavior just like and ethnographer might observe some remote tribe in the Amazon rain forest. C. Wright Mills,[ii] in his classic, The Power Elite, wrote of the extended reach of the political, military, and economic elites that President Dwight Eisenhower had warned us against in his farewell address to the nation in 1961 with the iconic phrase, “The Military Industrial Complex.”

Mills, Domhoff, and others were astute observers of the trends already present in the U.S. in the 1950s and 1960s, already shaping the corporate state. I wonder whether they could grasp how far the concentration of power would go and what form it has taken today. But the crimes of the extremely rich are far more complex and deep rooted and pervasive than such otherwise exceptionally valuable analyses would suggest. And the corporate state has grown deeper and more complex with the help of digital technology than could have been imagined over a half century ago. The leveraging of the political power by digital technology has produced an astoundingly concentrated plutocracy in the U.S. and elsewhere in the industrial world.

Another Kind of “Big Data”

We usually think of “big data” as all the demographic and personal data big organizations collect on all of us to better market their products and perform political surveillance. But there is another kind, data on the economic infrastructure of the political and financial elites of the world.

It is only by way of the power of “big data” and the professional persistence of the members of the International Consortium of Investigative Journalists could all of this been exposed in its massive detail. These dedicated journalists carried out textual database analyses of 11.5 million digital files or about 2.5 terabytes of data anonymously leaked from a Panamanian law firm. By the collective efforts of investigative journalists around the world, the first indications of the vast scope of global corruption of the super-rich was brought to light. The revelations so far only scratch the surface of deep global kleptocracy.

More recent social science has revealed the characteristics of the new corporate state that feed the kleptocracy. Sheldon Wolin’s work developing the theory of “inverted totalitarianism”[iii] shows how the corporate state operates as a complex organizational dictatorship under the guise of democratic forms but not substance. Wolin’s project focused on the operational characteristics of the corporate state, but not how the rich and powerful steal from the commonwealth.

Plutocracy IS Kleptocracy

The integration of the nation-state with the corporate and financial elites form the corporate state, controlled by those elites. The Panama Papers give some indication of how widespread among the super-rich some key techniques of global kleptocracy. Many people had heard of secret overseas accounts held by corrupt politicians and the super-rich in places like the Cayman Islands. But most people had no idea of the extent of their use by political and financial elites to hide and launder bribes and stolen money, and to avoid taxes on profits, both legal and illegal. The kleptocracy many suspected has been revealed in far more detail than anyone imagined possible. And so far, only the tip of the data-iceberg has been exposed to the light of investigative journalism.

So, what does all this mean? Well, first, it is clear that much more depth and breadth of corruption pervades the global political economy than even the most cynical critic imagined. Second, the data reveal that, given the corruption exposed, nothing short of massive transformation of the political process can realign global politics and economics with the interests of the publics they are supposed to serve.

Remember, all corporations are chartered by the government, supposedly for particular economic purposes that are allowable by presumably being consistent with the public interest. Today, that has become a fiction waiting to be made real again, even as the fiction of corporate personhood has reached its ascendancy. Realigning political economy with the public interest will be a hard battle to win. But the physical necessity of fighting global warming will force the hand of the both the corporate state and the super-rich. Little time remains. Will their economic interests continue to override the human interest in survival?

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[i] G. William Domhoff, Who Rules America ? 1st ed. 1967

[ii] C. Wright Mills, The Power Elite. New York: Grove Press, 1962

[iii] Sheldon Wolin, Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism. Princeton: Princeton University Press, 2008.

Calculating Survival: How to Avoid Human Species Extinction

Chances for the survival of the species Homo sapiens beyond the next few decades are diminishing rapidly.  Reducing the accelerating risk of extinction will require massive intervention to change our present trajectory of the global economy and change it fast.

Each week, new data are reported on rapidly accelerating impacts of global warming. Multiple positive feedback mechanisms are accelerating the warming processes while rendering hundreds of species extinct every day, destroying delicate ecological balances everywhere. The prospects for devastating sea rise, drought, super storms, mass migrations and escalated armed conflict over diminishing resources and food sources grow ever more grave. Meanwhile, government and corporate chatter and claims to action continue to be not only further behind the latest scientific forecasts but simply hollow or irrelevant. Cop21 amounted to little more than a clever smoke screen. Climate denial propaganda grows ever more irrelevant, yet continues to hold significant influence over the U.S. Congress more than any other political body in the world. Thus, the climate crisis deepens daily.

A major impedance to effective climate action is the lack of a clear vision for a specific path to genuine mitigation of the deep causes of global warming. The sources of carbon emissions are many and complex. Yet the evidence is overwhelming that only a very large reduction of carbon emissions in the near term is likely to offer much hope to tolerably limit rising global temperatures. A distinct lack of focus is evident among policy pundits, beyond the meaningless and arbitrary “commitments” such as, “twenty percent reduction in emissions from 1995 levels by 2020,” and the like. Bottom line: we have no plan and most of those in authority are in denial about that fact. We grasp at small straws, such as President Obama’s plan to reduce emissions from old coal-fired power plants. The big picture eludes most of us.

Several positive feedback loops in natural systems are accelerating the effects of anthropogenic global warming. That is an essential feature of global warming not much understood until very recently. But feedback loops constitute important accelerants to climate destabilization. With each new report from any of numerous scientific projects, the urgency of the situation becomes greater than previously thought.

This pattern should be a big red flag, but is largely ignored except by a few scientists turned advocates (by the gravity of their findings) such as Jim Hansen. Powerful advocates of climate action such as Bill McKibben and Naomi Klein are heard by the well informed but ignored by decision makers. The pattern is clear to anyone with time to look at the evidence and with the capacity for critical thinking – with the exception of most high ranking politicians and corporate and government officials.

Calculating Optimal Paths

Much is known about the diverse sources of carbon emissions in the industrial nations and those nations attempting to industrialize. Numerous reports in scientific journals and the Web sites of environmental and climate groups discuss hard data and findings on the sources and their proportional contributions to emissions. Yet little can be found discussing cost-benefit assessments for reducing carbon emissions in this sector versus that sector.

Clearly, the greatest resources should be applied to attacking the greatest sources of emissions as rapidly as possible. The largest sources that can be controlled most quickly must have high priority. The configuration of efforts chosen must be the one that produces the greatest carbon emissions reduction in the shortest amount of time. That can be calculated.

Each carbon emission source has its own characteristics; some are easier than others to attack quickly and effectively. Some will be very costly to modify to reduce emissions and simply must be shut down – easy to do technically, more difficult politically. Coal-fired power plants come to mind. Some utilities are doing just that since “clean coal” is mostly a propaganda tactic rather than a viable technology, while renewables are clearly cost competitive today.  Others may be viable but costly to change and too time consuming to justify pursuing for short-term gains in carbon reduction. Priorities must be set to optimize the total amount of emissions suppression in the least amount of time.

Economic cost is a factor, but must not be allowed to control the two key decision variables: total reduction and minimal time taken. While most costs and benefits are calculable within reasonable accuracy, every tactic for emissions reduction will run contrary to some institutional economic interest. That is where the choke point in climate action is located.

The science of carbon emissions reduction relies on evidence of emissions and operations necessary to reduce or eliminate specific sources. Those are “fact based” calculations. But the institutions involved make mostly political calculations which are used to make political deals based on economic interests. Political compromises based on economic interests and institutional power relations run directly counter to the goal of optimizing decisions for emissions reduction.

Instigating the Nearly Impossible

It seems obvious that an optimal strategy for maximizing carbon emissions reductions in the near term can be calculated. But how can the optimal strategy be implemented? Well, for an person in authority to implement anything, it has to 1) constitute a goal for him/her; and 2) be “actionable” within the set of institutional parameters within which that authority operates – unless the authority is a dictator, of course. Such implementation will not occur because political and economic authorities suddenly put the public interest over the special interests that control much of their behavior. It will only be achieved when two very different things happen.

First, the calculations have to be made by reputable teams of climate and energy scientists with all the peer-review elements to assure maximum accuracy and verifiability. As part of that process, the priorities must be set solely on the basis of optimization of rapid emissions reduction, without consideration of any special interest. This would, of course, be a major scientific undertaking; it should be launched much in the way that NASA was tasked to “win the space race.” That would require a major government commitment, which is unlikely.

The only other means would seem to be a process of self-organizing the task by scientific groups and associations. Ideally, a group like Bill Gates’ “Breakthrough Energy Coalition” of billionaires could fully fund such an effort. But Bill’s billionaires are off working on their own agenda of entrepreneurial venture-capital “philanthropy,” chasing technological miracles within the endless-growth ideological box. The optimization of a strategy for near-term carbon emissions reduction does not require new technology; it requires the social organization of science to seek that specific goal using readily available techniques.

Second, the calculations and their results must be made very very public. A massive public information campaign, both in terms of the impacts of projected business as usual carbon emissions and in terms of the elements of the optimal strategy to reduce emissions enough to minimize the damage of climate disruption to survivable levels, can be widely understood.

Scientists are usually reticent to get into the public spotlight. The audience for their publications is other scientists, who they hope will judge their work favorably. For scientists, the press conference or talk show goes against the grain. The path to promotion of a new idea or new data challenging old ideas is the peer-reviewed scientific journal, not the mass media. Not so, the science denier, whose natural media are the sound bite, the press conference, and the snarky radio talk show.

Information on the best path to human survival by rapid reduction of carbon emissions must be made public so that the urgency of implementing the strategy will be clear to everyone. The public must be mobilized. Only then can a mass social movement for human survival be mounted to force political institutions to initiate the optimum strategy for rapid short-term emissions reductions. We must face the fact that the institutional structure of the corporate state is organized in such a way that it resists and will continue to resist the radical changes to political economy necessary to avoid humanity being included among the rapidly growing number of species subject to the sixth great mass extinction.

It is clear that rapid implementation of such a strategy will involve major social disruptions and economic displacements. That is why it is virtually impossible to rely on the institutions of the corporate state to take the actions necessary to avoid complete climate destabilization. Individual officials may grasp the gravity of the situation, but the mechanisms for taking such extreme actions are just not there, short of declaring war on itself. They declared war on poverty, drugs, and terror. And where has that gotten us?

To avoid the tipping point to total climate catastrophe and societal collapse, the actions that must be taken run entirely counter to the operations of the corporate state. The global economy must be transformed in a variety of rather extreme ways for rapid transition to low carbon emissions to take place.

Advocates of so called “green growth,” clutching onto remnants of the endless-growth economic ideology, are the functional equivalents of climate deniers. Merely replacing coal-fired power plants with renewable sources of power is far from enough to slow global warming enough to avoid catastrophic consequences. We cannot convert to electric cars fast enough, even if the auto giants were committed to doing so. These problems are interconnected to one another and to many others. It is not a simple matter to fix the technologies of overproduction and overconsumption, nor the social processes of overpopulation.

So much of the output of these systems spill out of garages and public storage units that it should be clear that waste is a major product of the industrial system. That waste leaves a very big carbon footprint. And that is in addition to the vast waste and pollution resulting directly from the extraction/materials-transportation/industrial-production/shipping/big-box marketing/consumerism complex itself. If we expect to reduce carbon emissions barely enough to minimize the catastrophic consequences of global warming, the industrial production-consumption system itself must be seriously constrained.

The great social transformation necessary to initiate such diverse and extreme actions required to minimize carbon emissions very soon appears very unlikely. the consequences of such an outcome are dire. To change that grave prospect will probably require massive social mobilization to force institutional change.