Inequality is out of control in pretty much every country in the world. The Tax Justice Network and many others have laid out a range of policy prescriptions for change, and now even the world’s most powerful institutions, from the IMF to the World Economic Forum, agree with us.
But inequality just keeps getting worse!
Why aren’t our policy prescriptions being put into practice? How can we actually fight inequality?
Nick asked to interview Ben. But Ben asked in reply if instead he could interview Nick. So they interviewed each other. Here’s an abridged record of their conversation (it’s also posted on Inequality.org). You’ll also be able to hear an interview with Ben on our monthly podcast the Taxcast in January 2020.
Ben Phillips is a historian and the author of How to Fight Inequality, which has just been released
Nick Shaxson is the author of the books Poisoned Wells, Treasure Islands, and The Finance Curse, and a staff writer for the Tax Justice Network
Cross-posted from Tax Justice Network
So, how do we actually fight inequality?
Nick: When I give a presentation about tax havens or about finance, I get this one question all the time, which I struggle with. People say I ‘agree, but what can I do now?’ With an emphasis on the ‘I.” Your book, How to Fight Inequality, has been most useful to me, in this respect, and more broadly. It has really influenced how I think about all this.
You root this question of ‘how to fight inequality’ in history. You start by setting out how winning the intellectual argument doesn’t get leaders to shift, that it’s not a debate, it’s a fight.
Ben: I studied history. Whenever someone says how can X or Y happen? – I always ask well, ‘how did it happen before? If we want to reduce inequality, how did people do it before?
There’s an irony that some of the very academic policy wonk types who see themselves as utterly driven by the evidence, still believe that merely presenting evidence will lead decision-makers to pursue transformational change decision-makers, when . . . there’s no historical evidence for that!
Nick: That’s what you call in your book ‘the Evidence-Based Paradox’?
Ben: Yes. I remember sitting in a room full of economists exchanging formulas with Greek letters. Then I raised my hand, ‘just wondering, everyone here seems to see it as their role that they will present the facts that will explain to leaders how inequality is harmful, and what policy mix would reduce it, is that right?’ I was told ‘yes.’
So I said OK, can anyone tell me about when and where doing that brought a noteworthy reduction in inequality? They went very quiet. Then they started laughing. There had been no historical example of that unspoken assumption ever delivering.
As Jay Naidoo, who founded the trade union coalition in South Africa that helped bring down apartheid, once told me: ‘It was not about how brilliant our argument was. No one cedes power because of a great Powerpoint. What matters is the balance of power between your side, the people’s side, in the confrontation and negotiations with the other side, the side of the elite.’
Nick: Your book is a guidebook for people power. How do we, the people, get control of the wheel? What are the top three lessons from history?
Ben: First, overcome deference. When I looked back, all of the people who eventually won against inequality were told at first to stop causing trouble. Right now, when critics bemoan Black Lives Matter, they say ‘why can’t they be more like Martin Luther King?’ Well, who in a 1966 Gallup Opinion poll show was viewed unfavourably by 63% of Americans? It was Martin Luther King. Because by 2011 Dr King was viewed unfavourably by only 4% of Americans, people often read the recent consensus back into history and assume that he was always broadly accepted, and learn therefore a completely false lesson, that change comes from people and movements who never offend anyone; whereas the true lesson of Dr King and of other change-makers is that fighting inequality requires us to disrupt, to confront power and to take on prevailing norms.
Nick: So, be happy being a trouble-maker. And the second and third lessons?
Ben: Second, build collective power together. The march, the demo, the great speech, are the most visible acts but are not the main work. It was never the famous leaders that delivered. Even Nelson Mandela – they were really expressions of, or things enabled by, wider groups of thousands of leaders.
The main work is patiently organising. Gather together people in your neighbourhood, your workplace, or your faith community. Then bond and bind your groups with other groups. Revd William Barber calls these fusion coalitions – because ordinary people are only powerful together, in coalitions of coalitions.
Third, create a story. Get above technical policy debates and have more profound conversations about who we are and what we stand for. Presenting data and formulating policy was always a necessary condition, but so insufficient that it’s not even in the top 3 lessons of how change happens.
Sometimes progressives say “we are the scientists, the experts, we don’t do myths and stories.” Well then, you’ll lose.
As the great union organiser Joe Hill noted, ‘a pamphlet, no matter how good, is never read more than once, but a song is learned by heart and repeated over and over.’ In Britain in the mid twentieth century, the phrase ‘Welfare State’ came from the Archbishop of Canterbury. In Mexico recently, a big step forward in rights for domestic workers was enabled by the success of the movie Roma which set out no policy propositions, but changed the narrative.
Nick: And then, when you do these three, you win?
Ben: And then you can win. That beautiful chant ‘the people united will never be defeated’ is, sadly, not correct. But what is correct is that the people divided will always be defeated. Resistance doesn’t always work, but acceptance always doesn’t work. Inequality is a contestation over power. It asks us, in the words of the great civil rights song “Which side are you on?”
Now I want to ask you about your work Nick because you do just that, you pick a side.
Your writing is in the great journalistic tradition of the exposé, bringing to light abuses of power and cover-ups, but it does so on economics. That makes you unusual. A lot of crusading journalism now goes no deeper than uncovering one politician who did something embarrassing; meanwhile, on the other hand, so many mainstream books on finance manage to be abstract, dull and elitist. Your work, in contrast, lays bare massive looting.
How did you end up writing about what’s happened to finance, and more specifically, how did you end up writing about it in the way that you do?
Nick: I cut my teeth in a news agency, Reuters. They pride themselves on impartiality. Crudely, you went to one side, got some quotes, went to the other side, got quotes from them, tried to steer some sort of middle ground. The end result was sort of like ‘well this person says this, another person says that, here’s some analysis, and it’s complicated, the end’.
Then I was plunged into Angola, an oil rich country with vast money flows happening, a few people who were very rich, very absent and very distant, and most in abject poverty. The news reporting was all about the war but almost nobody was touching the economic side and how that related to the politics, even though everyone knew there was some awful connection. I began to see how money sloshing downwards through a political system shaped that system in its own image.
It was so clear that this was a story of people doing bad things, of bad systems and bad structures. Neutrality was a trap. I moved from an impartial ‘it’s all complicated’ approach to being clear about good and bad and explaining carefully why.
The dirty secrets of what has gone wrong with finance are not only hidden in vaults – they are also hidden in acronyms or strange phrases, ‘Double Irish’ is one, a linguistic masking that is maybe even more insidious than any physical masking. I work to peel away both of these maskings, and say, plainly, ‘this looks like looting.’
Ben: A lot of people portray corruption as an African phenomenon. But your work calls out leading western institutions, which until recently were fairly well-regarded brands.
Nick: It was a long process of pulling on threads, finding unexpected connections, then keeping pulling, and finding more. Then, in middle of doing that – I was just about to publish Poisoned Wells, my book about oil in Africa – I got a call from the former economic adviser to British tax haven island of Jersey. He wanted to tell me about tax havens. We met up in London and he detailed the corruption, the vested interests, and I saw it was the same story as Angola. My career, which I had assumed was going to go down the oil-in-Africa route, made a sudden pivot.
I had started in Africa, followed the leads, and ended up back at home in my own country. I laid it out in my tax haven book, Treasure Islands.
Ben: Desmond Tutu said when you keep seeing people drowning in a river, sure, go and rescue them, but also go upstream and stop the guy pushing them in. From Angola, you have gone further and further upstream, right?
Nick: From Angola I could already dimly see offshore, because so much of the wealth was disappearing there. Then especially with the help of that Jersey official – he’s called John Christensen, and he co-founded the Tax Justice Network – I got to understand the global system of offshore, how it worked. It was much bigger than what I had expected – and Britain and the United States, sat right at its heart.
Ben: You went from writing about the oil curse to writing about the finance curse. What does the finance curse do?
Nick: Tax havens transmit harms outwards, to other countries, but countries with oversized financial centres transmit harms inwards to their own people. Instead of providing services that support the creation of wealth, they focus increasingly on the more profitable business of extracting wealth. Democracy gets undermined, inequality gets worse, and economic growth slows. The answer? Shrink finance, for prosperity.
Ben: Your books includes no-holds-barred revelations of collusion between financial and political elites. How do those whom you have exposed respond. Have they sued?
Nick: I always worried that someone with infinitely deep pockets would destroy my life in the libel courts. But they haven’t sued, except with minor exceptions. They chose a cannier tactic. They didn’t engage with the revelations at all. On a BBC radio programme, I was up against someone from the financial sector to talk about the finance curse. I was worried, would they come out swinging, find some awful mistake in the book? Instead, and I was unprepared for this, her reaction was, ‘yes, well there are some problems in finance, it’s not always so great, but we are trying really hard and things are getting better.’ And that was it. Opposing that is like fighting against mush.
OK so my son, who is 13 years old, has come into the room. So to conclude, can you explain to him, why we need to fight inequality, and how?.
Ben: Hi. Great to meet you.
My daughter, she’s not much older than you, she goes on climate marches where we live now, in Italy. There was a big one planned for a school day, and schools were warning kids that going on the march would have them recorded absent from school without authorisation, a mark against their name. But then it became clear that this march was going to be huge: thousands and thousands and thousands of kids would join, across the country. So the minister for schools said there were just too many kids to all be marked down like this, so he instructed that going to the march would count the same as going to school. Then, after the march, he agreed to change the school curriculum to properly include climate.
Each of those kids who won those victories weren’t powerful on their own, but together they were.
When we look back at history, we see that when the worst unfairnesses got tackled, it was only possible because people came together.
People standing up together is what stopped governments insisting that different races had to live apart; it is what stopped governments telling women they could not vote; it is what stopped company bosses telling little kids to work down mines or up chimneys. The lesson from history is this: if you want to make your school, your town, your country, fairer, you can – but not alone. You will find that lots of people care the same as you. It’ll still be really hard. But the only time we’ve ever made steps forward like that was when we’ve pushed, together.