What have the Panama Papers – the latest in a series of leaks on the rich, the powerful and data – got to do with public education and democracy? Lots, I am going to suggest in my presentation to an important policy and research conference hosted by Education International in Rome today and tomorrow, because they tell us something about the kind of society we have become, and why it is that a public good, like education, is increasingly viewed as unaffordable.
Governments view the challenges facing them as driven by too much public demand for services like education, health and other welfare services, and that what is needed is to wind back demand, and ramping up private contributions and responsibility .
But, what if we took a look at why governments are confronting these issues in the first place by asking a different set of questions?
Could it be that real problem is that it is those who are the very very rich – the 10% and the 1% of the 10% – as Thomas Piketty in his best-selling book Capital in the 21st Century shows – who have become so because of the ways in which governments have put into place policies that have enabled this highly inequitable state of affairs to flourish.
In short, high net-worth individuals and corporations are able to side-step their obligations to contribute to their respective societies through low tax rates and tax breaks, whilst at the same time convincing themselves and the wider public this is good for economic growth and development, and good for the workings of democracy.
The Panama Papers – a list released this past weekend of powerful and wealthy individuals who use the anonymity of tax havens – from Switzerland to the Bahamas and Luxembourg – to accumulate is one more nail in the coffin of evidence that something is seriously rotten in the corner of the kingdom.
Gabriel Sucman, in his ground-breaking book published in 2015 The Hidden Wealth of Nations, estimates that on average -and clearly averages conceal great differences between countries- around 8% of the worlds wealth is located in tax havens. And by this he does not mean deposits, but stocks, bonds and so on.
This wealth – in some cases difficult to track because of clever intermediary brokering such as creating shell companies – is not subject to tax, and thus not contributing to helping resource our public services as public goods. This 8% would if subject to tax – generate more than we need to fix public services. This 8% would bail out the Greek economy more than 21 times over. This 8% is the cause of much misery via austerity policies. This 8% has a name; ‘anti-democratic’, bordering on corruption, and it is a corrosion of character if we think this is all perfectly acceptable.
Wolfgang Streeck, for Director of the Max Planck Institute in Germany – has written convincingly on what he calls the shift from the tax to the debt state. In a tax state – public goods were funded out of taxation. In a debt state, public goods are regarded as unaffordable, and must be funded out of household debt or by creative accounting manoeuvres by the state such as off-balance sheet accounting techniques which simply create an even bigger problem for future generations in a promise now and pay later.
Yet as Sucman reminds us, modern democracies are based on a fundamental social contract everyone pays on a fair and transparent basis, so as to access public goods and services. When those with privilege and resources avoid their responsibilities – such as paying tax almost entirely– then the modern social contract is at stake.
Education is rightly at the heart of the modern social contract. Education is one of those precious gifts that we have at our disposal – to learn how to live with respect with each other, to leave a world in better shape than we found it, and as one of today’s speakers at Education International’s Conference, Dennis Shirley, reminded us – to give life to the next generation in all of its fullness.
This is not just a gift that helps create the conditions for democracy to be possible – though that is true. It is a gift that requires from all of us, but especially in the education profession, a heightened sense of responsibility to guide us away from this rottenness to something way more noble and deserving of the next generation of learners.
To find out more about the Panama Papers please go here.
The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.