[TLDR (too long didn’t read): If you are reading this, chances are you care about HR. This Reader is about how the prevailing economic system is corrupt and HR blind when it comes to where it allocates fiscal resources. For a quick overview, just read the bolded text]. Note: You can easily translate the Readers to many languages, Use the app deepl.com and it is done instantaneously. It takes seconds to download the app to your computer or phone and translations are of high quality.
-Here are two ‘sixty-four-thousand-dollars’ very current and pertinent ‘questions’:
- Why are some immensely rich people called oligarchs in one country and job creators elsewhere?
- Why are tax havens not immediately abolished if we want to target these (not necessarily) ‘oligarchs’ (only) where it hurts them most so that the state can collect on this enormous pot of illegal money? (Francine Mestrum) Hmm!: neoliberalism… #
1. Neoliberalism, it is never too late to recap:
- Neoliberalism is a contemporary concept used to refer to market-oriented reform policies such as eliminating price controls, deregulating capital markets, lowering trade barriers and introducing privatization and austerity, as well as reducing state influence in the economy.
- Neoliberalism is considered as both an ideology and as a public policy which, in a nutshell, is seen as a ‘social value that reduces state intervention’ through privatization of public economicsectors or services, deregulates private corporations and reduces governmentspending.
- Neoliberalism thus strips the state of its mandate reducing it only to a mere ‘adjuster and balancer’ of the market forces. In an apparent contradiction, the spread of neoliberalism requires substantial state intervention to establish a hegemonic global ‘free market’ to begin with.
- Neoliberalism has been promoted as the only way for countries to achieve economic freedom and competitiveness. Governments that are under the influence of neoliberalism have been helpless in arresting tax evasion and in dealing with social problems –and with human rights (HR) that have been reduced to a laughable low.
- Leaders in countries under the influence of neoliberalism remain helplessly dependent on their overlords who use institutions like the IMF, the World Bank, the WTO and other international security networks to frustrate their efforts and keep them in check; This results in worthless leaders who will only dance to the tune of the metropoles. (Tersoo Nande)
2. In this neoliberal environment, private companies talk about corporate social responsibility. But this public relations stunt is usually a mere face-saving activity as what is given back to the community is usually very minute compared to the profits being exacted. (T. Nande) This is why, in this Reader, we rather talk of corporate social accountability where public interest CSOs monitor them to assess if they are truly socially responsible and HR compliant. But then, to take the needed measures, it is nation states that are the only effective guarantee of all HR being fulfilled and protected. Therefore, whoever (TNCs?) today considers the nation state to be dispensable thereby declares –however unintentionally(?)– HR to be dispensable. (Ralf Dahrendorf) [As I have written in other Readers, a Binding Treaty on TNCs HR Responsibilities is being negotiated at the UN’s HR Council].
At the crux of neoliberalism is how governments collect and spend public money
-Decisions about this mark the difference between a life of dignity and one of deprivation for billions of people.
3. Let us explore:
- Budgetary decisions reflect a government’s political priorities; they directly impact what is available, for whom, and where thus affecting different communities in different ways.
- On a collective level, the use of public resources indeed has the potential to help tackle centuries of exclusion of certain groups (like women, indigenous peoples, people with disabilities, LGBTIQ+ communities …and more) who have been systematically denied their rights.
- As a result, fiscal austerity measures that reduce budget deficits through cutting spending have emerged as a top neoliberal priority.
- With budgets strained, governments have increasingly fallen back on indirect taxes on consumption that fall more heavily on those with less.
4. Make no mistake: These measures have been pushed by political pressure from powerful elites, foreign investors, and international financial institutions. Ethnic minorities, refugees and immigrants have suffered the most; women’s livelihoods have also been hit severely. There can be no doubt that fiscal austerity policy choices made by governments have meant deprivation for literally billions of people. Meanwhile, the global tax system is riddled with loopholes that allow the world’s wealthiest individuals and corporations to avoid paying their fair share.*
*: Low tax jurisdictions or tax havens siphon off resources from countries that desperately need more money to spend on health, education, or gender equality.#
The human rights angle about how fiscal resources are to be collected and allocated
5. Centering on HR on fiscal budgeting issues is sometimes referred to as the four “Rs” in fiscal policy: i.e., Revenue; Redistribution; Re-pricing; and Representation:
- Revenue directly impacts what is available, to whom, and where (HR determining what needs to be prioritized).
- Redistribution allows for the redistribution of benefits across society; progressive taxes on income and wealth helps curb inequalities between individuals and between groups (drawing on HR helps us to determine how resources ought to be raised and distributed in a fair, just, and gender-responsive manner; here, the norms of equality and non-discrimination place an obligation on governments to close the gap between different groups; they give us a tool to demand that tax policy be explicitly focused on pursuing equality).
- Re-pricing incentivizes or disincentivizes different behaviors (drawing on HR helps us to determine what counts as a public bad or a public good emphasizing the taxing of the bads and subsidizing the goods).
- Representation allows taxpayers and other claim holders holding governments to account for how their money is spent (tax and budget policy-making must be democratic and allow for the meaningful participation of people affected by it).
6. In short: The way that taxes are raised –and from whom– must be equitable, and in line with: a) decreasing reliance on regressive, ‘indirect’ taxes on consumption (such as sales taxes and VAT) in favor of more progressive ‘direct’ taxation on income and on wealth, b) boosting taxes on property, wealth, and other assets (e.g. stocks, shares, and real estate) and c) taxing ‘excess profits’ at a higher rate (Amazon increased their profits by nearly 200%, for example).
7. So, it is the highly underutilized HR-based approach that gives us a tool to interrogate decisions about resource allocations. Just an example: ‘deliberately retrogressive’ (austerity) fiscal measures** are a flagrant violation of a government’s HR obligations!
**: Retrogression means a backsliding in the enjoyment of economic, social and cultural rights.
8. Note: Government obligations do not stop at their own borders. They have duties (known as extraterritorial obligations) to ensure that their actions do not harm people in other countries. (all the above from CESR)
Claudio Schuftan, Ho Chi Minh City
Your comments are welcome at schuftan@gmail.com
All Readers are available at www.claudioschuftan.com
#: The World Can Stop Capital Flight Now https://mail.google.com/mail/u/0/#inbox/FMfcgzGpFgnSzThzFrsLrKxJhpCBkSNs