The Paradise Papers -- like the Panama Papers before them -- have revealed a stark fact: Corporations have run amok. Murray Dobbins writes:
Global corporations have become the greatest threat to the planet. The deliberate starvation of government, climate change, grotesque inequality, Dickensian working conditions, environmental degradation, dwindling biodiversity, the slow (or not so slow) death of the oceans and the creation of the security state on corporations' behalf threaten not only the natural world but our capacity to democratically govern ourselves while maintaining some semblance of civilization.
Consider what we now know:
A recent study by Canadians for Tax Fairness (disclosure: I am on their board) revealed that the 60 largest public companies in Canada have 1,021 subsidiaries in a string of tax havens. Four had none; Valeant Pharmaceuticals and Sun Life Financial have over 50 each. According to the study, "Canadian foreign direct investment (FDI) in tax havens grew from $2.1 billion in 1994 to $284 billion in 2016."
By now most people know how these "profit-shifting" schemes work. Companies assign profits made elsewhere to tax haven subsidiaries in countries with low or no income taxes. They half-heartedly claim they actually do business in these countries, but the numbers say otherwise. The study shows subsidiaries in non-tax haven countries employ between 1,244 to 2,760 employees per billion in assets; for tax-haven users the ratio is one to 250. In 2014, Canadian corporations held almost $31 billion in assets in Bermuda; their subsidiaries employed a total of 35 employees.
Governments have the power to make and to breakup corporations. But, for the last thirty years, they have become the handmaidens of their corporate masters:
Governments are the only institutions that can seriously challenge the power and reach of transnational corporations: they made them and they could unmake them. Only governments can curb their predatory nature, constrain their contempt for their workers, communities and the environment, and genuinely punish them when they openly break the law as part of their fiduciary "duty" to their shareholders.
Of course, it's difficult to imagine current governments in any role other than the unindicted co-conspirator which have played for decades. The implementation over 30 years of neoliberal policies by governments of virtually every stripe has liberated corporations, increasingly removing constraints designed to make them accountable to the broader society.
And now, south of the border, there is a tax "reform" bill which unashamedly does the bidding of those corporate masters. The assumption is that the rest of the world will follow in lock step.
It's also undeniable that, if the planet is to survive, governments will have to reassert their authority over the sociopathic monsters they have unleashed.
One personal note: I've come down with some kind of bug. I'm on my second round of anti-biotics and the doctor has dosed me up with puffers. I'm going to take a couple of days off and try to beat this thing into submission. But I'll be back.
