England’s New Money Lords: the implications of private wealth and political power for personal privacy

In the wake of the Panama Papers, a number of commentators have expressed an unease at the scrutiny of the Cameron family’s financial affairs, even while acknowledging the significance of the issue of offshore tax avoidance.

I couldn’t help but be reminded of a very apposite comment by the 1930s muckraking journalist Ferdinand Lundberg

The family today, in no slighter degree than two or three centuries ago or in imperial Rome, is supreme in the governance of wealth, amassing it, standing watch over it, and keeping it intact from generation to generation. Because it is (unlike that relatively new device, the corporation) a private entity which in the strictest legality may resist public scrutiny, the family lends itself admirably to alliances of a formal character and serves as an instrument for confidential financial transactions. By definition the family is a sacrosanct institution, and no agency of government may pry into it without offending inculcated prejudice. The partnership, it is true, offers some refuge, and is certainly more of a private affair than is the corporation; but it, too, is now quite open to political inquiry. The family alone provides a safe retreat from democratic processes, not outside the law, but, for practical financial purposes, above the law. (America’s Sixty Families, 1937).

America’s Sixty Families was a unique study of the role of the intergenerational fortunes of elite families as an institution of American societies. I know of nothing similar for Britain except Tory MP (England’s Money Lords in the US), by Simon Haxey, which also appeared in the 1930s.

The fact that Haxey, alias Arthur Wynne, appears to have been a Soviet spy will only increase concerns that inquiry that pierces the veil of private wealth represents an Orwellian intrusion. But it is important to remember that this was the era of the Great Depression and the Popular Front, when many intelligent people looked to the Soviet Union because key elements of the Tory elite were seen to be appeasing fascism.

The disproportionate accumulation of private wealth is itself a threat to democracy, as Lundberg’s allusion to Imperial Rome hints. Rome became an empire because a leading aristocrat was able to convert his private prerogatives (dominium) into political power (imperium), while maintaining a facade of republican legality. While ancient republics lasted, they were prepared to take extraordinary measures to prevent such accumulations of private power.

Economic inequality unchecked tends to become political inequality. As Orwell wrote in The Lion and the Unicorn, ‘A man with £3 a week and a man with £1,500 a year can feel themselves fellow creatures, which the Duke of Westminster and the sleepers on the Embankment benches cannot.’ By subverting democracy and the rule of law, offshore capitalism is undermining the very liberal freedoms of which it takes advantage. Breaches of privacy such as the Panama Papers are only a symptom. It is inequality itself which is breaking down the barrier between the private and public realms, between private wealth and political power.







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