Tax evasion and white collar criminals

“Bank secrecy will no longer take place.” With these words, the German Minister of Finance, Wolfgang Schäuble declared on October 27, 2014 in front of four European newspapers (“Les Echos”, “El País”, “The Times” and “Corriere della Sera”) the international will to face at tax evasionl.

His words are part of a global exchange agreement Automatic tax information that took place this Wednesday, October 29 in Berlin. It will seek, by 2017, to resolve tax evasion in tax havens such as the Cayman Islands, Switzerland and Liechtenstein. Although it is seen as an important step in the fight against corruption, and we do not question it, it is nothing more than a facade covering other structures to carry out tax evasion. . In this article we will try to describe what a common practice represents in times of crisis: A regulation which serves as a social pretext for a growing deregulation of these illicit activities.

Financial capitalism

Financial capitalism becomes globalization. “Globalization is, in fact, driven by the profit of banks, speculators and traffickers in multinational (American) companies and under the multifaceted domination of the American hyperpower.”[1]. The type of capitalism that is imposed, especially the one that emerges after the Cold War, is a globalized, deregulated and “funded” modelOf these three characteristics, the last is the most important. “Financing” represents a “process by which the firmly established financial services take over the dominant role in the field of economics, culture and politics within a national economy. [2] and global. ”In order for funding to be established as such, it is necessary to open certain borders (globalization) And the deregulation (Or in other words liberalization) of the economy of states. All of this is accompanied by the development of new communication technologies (such as the Internet) and large multinational companies.

the financial capitalism it functions at several levels but it is at the supranational – or world – scale that it is in the greatest guarantees of progress, because financial capital escapes the control of the State, and therefore camps on its own. Since the state should be the regulator of the economy (always seated on the ideological foundations of Nation state), The capitals should be framed there, assuming their laws and regulations. The search for extreme profitability on a global scale, at levels far removed from social reality, can cause imbalances given the “deterritorialization” of the economy, and cause periods of economic crisis.

The 2008 economic crisis: context of reform of the criminal bases of financial capitalism

It is generally accepted that the current economic crisis began in 2008 with the collapse of the American bank Lehman Brothers. But such guilt of said bank masks a deeper and more structural reality, the responsibility has gone unnoticed in many homes. We refer to a criminal reality of the speculative practices of the banks, in particular the excess of credit (taking of high risks) and the secret sale of toxic financial products. This reality appeals to white-collar criminals at the heart of high finance movements.

These financial “scams” ​​occur in times of economic euphoria, when control of the economy is overshadowed by optimism in the markets. When the “speculative bubble” explodes – due to the inability to repay the debt of certain economic sectors or society – the bad practices of banks are exposed, as we have seen in the case of Bankia in Spain. In reality, what is happening is a collapse of the productive structure. The large number of competitors within the financial sector implies a gradual decrease in the rate of profit of financial monopolies, forcing them to change their strategy in order to perpetuate their domination. monopolistic / oligopolistic. Then, the financial monopolies / oligopolies are led to restructure the productive system legitimized by the social emergency.

This is where you try to sort out these “flaws” in the capitalismO, With the aim of preventing further systemic relapses and political and social unrest. One of the big problems is capital evasion in tax havens. In Spain, at the onset of the economic crisis (2009), large companies escaped 42,710 million euros[3] (Remember the 22,000 million euros injected into Bankia by the State). However, along with the regulation of these structural flaws, another monopoly model of global fraud is being created.

“High frequency trading”, a new criminal structure?

The agreement on the exchange of tax information, initiated by the Organization for Economic Co-operation and Development (OECD)[4] and signed by 49 countries in Berlin on October 29, 2014, aims to bring confidence to society and markets. Seems, at least at first, that this is good news.

But this new regulation is nothing more than a new mask for the criminal character of capitalism. In other words, the construction of new structural bases of the productive system which will serve to perpetuate the power of the monopoly / oligopoly in the production of new mechanisms of escape from capital.

High frequency trading (In English) is a trading technique that uses sophisticated computers capable of executing orders at high speed in order to profit and profit by operating automatically when they find differences in the prices of securities.[5]. It is a form of negotiation algorithmic which acts on a much higher timescale than humans. Thus, the human brain is replaced by algorithmic calculations and supercomputers, rendering humans more and more useless.

We are facing a new technological paradigm, Based on artificial intelligence, which is nothing more than a new financial engineering structure that favors a few people with large capital. The regulation of tax havens, As we said, it will be nothing more than a makeup service in the ‘ tax evasion if these new speculative practices are not regulated. The self-sufficient capacity of these mainframe computers, the ability to earn super-fast profits and even evade capital (because it is impossible to keep up with the speed of these mechanisms) contrasts with the global political shift against fraud.

the tax evasion, the economic crises, Corruption… represent a hidden face of the reality of crime. The media focus on highlighting the most visible acts but not those with the most social impact. Rodrigo Rato is an example of the impunity of white collar criminals whose actions have a greater impact on society.

bibliographical references

  • [1] Yves Lacoste, Globalization and geopolitics, Hérodote. Geography and geopolitics review, La Découverte, 2003, Paris.
  • [2] Gayraut, Jean-François, The new criminal capitalism (“Le nouveau capitalisme criminale”), Odile Jacob, 2014, Paris.
  • [3] Union of Financial Technicians.
  • [4] It was precisely the World Tax Forum, a branch of the OECD, that organized the international agreement.
  • [5] Gayraut, Jean-François, The new criminal capitalism (“Le nouveau capitalisme criminale”), Odile Jacob, 2014, Paris.

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