THE HIDDEN WEALTH OF NATIONS: The Scourge of Tax Havens by GABRIEL ZUCMAN

THE HIDDEN WEALTH OF NATIONS: The Scourge of Tax Havens

GABRIEL ZUCMAN

University of Chicago Press, 2015, 129 pages

Review by Phil Shannon

Criminal heists don’t come any bigger than the global theft every year by the ultra-rich of around US$200 billion courtesy of the off-shore tax-haven banking industry.  In The Hidden Wealth of Nations, Gabriel Zucman, economics professor at the London School of Economics and Political Science, estimates that a staggering US$7.6 trillion, or 8% of the world’s entire individual financial wealth, is held in the tax-shelter banks of Switzerland and a handful of other countries.

 

There, it annually dodges some $190 billion in interest, dividend and capital gains taxes on the income it generates, whilst also escaping any wealth and inheritance taxes, which would otherwise be payable in the depositors’ home countries should the owners of the hidden wealth, as 80% of them do, choose not to declare these assets to their national tax collector.

 

Swiss bankers like to claim that their 1935 banking secrecy law, which legalised the fabled, anonymous ‘Swiss numbered bank account’, originated as a noble act to protect the savings of persecuted Jews in Germany.  As Zucman shows, however, only 1.5% of non-Swiss depositors who opened accounts between 1933 and 1945 were Nazi victims.  Switzerland’s banking ‘big bang’ happened well before Hitler took power, in the 1920s, with the biggest growth spurts fuelled by wealthy French depositors following the years when France increased its top marginal tax rate.

 

Swiss banks have continued their services for the world’s high-wealth elite who want to cheat on their taxes.  Corrupt Russian oligarchs and African dictators are eager clients but Europe’s wealthy lead the crime wave with US$80 billion in tax evaded through off-shore tax hidey-holes.

 

The major method for disguising the true identity of the wealth-owners these days is a devastatingly simple accounting sleight-of-hand.  Sixty per cent of foreigners’ bank accounts in Switzerland confer customer anonymity through de-identified shell companies, trusts or foundations registered in the British Virgin Islands, the Cayman Islands, Liechtenstein, Luxembourg, Bermuda, Jersey and  other no-taxing micro-states.  These empty financial fronts can be quickly set up for a few hundred dollars, lickety-split, in bank offices in Berne or Zurich.

 

Many millionaires derive their wealth from their majority shareholdings in multi-national corporations (their “ownership of the means of production which leads to true economic and social power”, says Zucman).  These companies often engage in the scam of profit-shifting to low or zero tax jurisdictions.  For example, over half of the total overseas profits made by US multinationals (accounting for 20% of total US corporate profits) takes refuge in tax-havens, avoiding US$130 billion dollars a year in corporate tax that would otherwise be payable at home.

 

Governments rhapsodising about tax fairness have ritually pledged to deal with tax-havens by getting off-shore banks to report the identity of their account-owners to the relevant national taxation agencies but, as night follows day, weak, simplistic, partial and easily circumvented policies have followed the rhetorical fanfare.  Procedural failure was built into a G20 scheme in 2009, for example, which trumpeted an ‘end to banking secrecy’ but which impotently oversaw a 25% increase in the wealth hidden in tax-havens.

 

New arrangements proclaimed by the G20 (now headed by the Australian Government) have obtained pledges by most tax havens to cooperate from 2017-18 but defeat looks guaranteed here, too, because nowhere does the new protocol deal with the identity-covering “opacity of financial intermediation chains” of shell corporations and such-like, nor with verification procedures or penalties for failure to comply.

 

Zucman proposes more radical measures.  A global financial register of tax-haven accounts, run by the International Monetary Fund, would identify (and therefore make taxable) which of the tax-haven foreign clients own exactly what wealth, tracked through all links in the pea-and-thimble wealth-hiding game.  This would be backed by economic sanctions such as customs duties and tariffs on non-cooperating banks.  Profit-shifting by multinationals would also be stymied by a sales-based formula which apportions global consolidated profits on the basis of the country where each corporation does actual business rather than the low-taxing country where it is formally headquartered.

 

Zucman desperately wants to tame the power of money, unlike governments which, he notes with considerable understatement, “have not been stellar in their boldness or determination” to tackle tax-haven theft.  Zucman doesn’t ask why this is so, however.

 

Millionaires and corporations (including the tax-haven banks which profit massively from wealth management fees) do not want to pay their fair share of tax because this would cut into their wealth and profits.  To their agreeable politicians - almost all of whom are in the pockets of their corporate donors, or who (like Australia’s Prime Minister, Malcolm Turnbull) are tax-sheltering multi-millionaires themselves, or who share the political ideology of profit maximisation - a genuine assault on tax havens is anti-capitalist heresy and therefore inconceivable.

 

The tax-defrauding capitalist class needs to be politically challenged by those the working class taxpayers they regularly steal from.  Don’t expect the world’s capitalist governments to be leading that fight.

SLICK WATER: Fracking by ANDREW NIKIFORUK

SLICK WATER: Fracking – and One Insider’s Stand Against the World’s Most Powerful Industry

ANDREW NIKIFORUK

Greystone Books/David Suzuki Institute, 2015, 350 pages

Review by Phil Shannon

The fracturing of rocks to mine more fossil fuels was born with the oil business, writes the Canadian journalist, Andrew Nikiforuk, in Slick Water.  During the world’s first oil boom in Pennsylvania in the 1850s, highly volatile nitro-glycerine and other explosives had been used, with lethal risk, on sluggish wells to turn them into gushers by creating new fractures to channel blocked oil to the surface.

 

The coal seam gas (CSG) [or coal bed methane (CBM)] industry joined the perilous fracturing party as, ironically, a safety measure to vent methane from coal pits to reduce the hazard of explosive methane disasters in the coal mining industry.  Now, the deadly coal-mining by-product, methane, has been transformed into an allegedly friendly fuel, disarmingly re-christened as ‘natural gas’.

 

Decades of “wild experimentation” in the CSG technology of hydraulic fracturing (fluid injection, under pressure, into rock), commonly known as ‘fracking’, has included underground nuclear explosions, and a kaleidoscopic use of toxic chemicals such as hydrochloric acid, arsenic, formaldehyde, napalm, rocket fuel, diesel oil and solvents.

 

One inherent consequence of fracking is wayward fracks resulting from what is essentially the application of brute force to geology.  The fracking scientists and engineers have never been able to predict or control the length or direction of the induced fractures, allowing the migration of explosive methane and poisonous frack fluids ‘out of zone’, invading areas many kilometres away via groundwater.

 

The result has been dying crops, diseased livestock, exploding homes, flammable water and a noxious parade of mutagens, carcinogens, endocrine disruptors and chemical irritants.  Accompanying them have been massive truck convoys, earthquakes, and water, air and noise pollution.

 

These outcomes are at stark odds with what is promised at the kitchen table by fracking company representatives bearing fat chequebooks to pay landowners for leasing their land to CSG drillers.  Those who object are bullied into silence by high-powered lawyers with cash compensation in return for confidentiality agreements and gag orders.

 

Hush money was not an option, however, for Jessica Ernst, a qualified scientist and environmental consultant for major fossil fuel companies.  When the $30 billion oil and gas giant, Encana, fracked community aquifers, with typically disastrous consequences, near her home in Alberta, Canada, the CSG industry roused a formidable opponent.

 

In 2007, Ernst launched a $33 million lawsuit for damages against Encana and its provincial government enablers in the petro-state of Alberta.  Warned that the case might consume the rest of her life and every last cent, Ernst vowed, nevertheless, to press on, her main goal the public exposure of how fracking ‘poisons water and divides communities, and captures our energy regulators and elected officials’.

 

Encana, its paid-for community allies and the state regulators, played dirty.  They tried to discredit  Ernst as mentally unstable (she had spent a year in a psychiatric hospital ward suffering from anxiety and flashbacks over her sexual abuse as a child).  They used personal threats and intimidation (one of Ernst’s pet dogs was decapitated, whilst the counter-terrorism police accused her of being an eco-terrorist).  They deployed bureaucratic resistance (making her freedom of information request a lengthy, expensive and bitter farce).

 

As her legal suit stretches on, Ernst continues to speak to thousands of potential fracking victims in north America and overseas, inspiring advances and victories in restricting, banning or laying community siege to the frackers.

 

Nikiforuk’s book is an extensively detailed case-study of the making of an activist.  Ernst did not start out as an environmental radical, already opposed to fossil fuels and the undemocratic collusion of industry and governments.  It was the sour reality of fracking, and Ernst’s sheer doggedness and self-sacrifice, that has turned her into a subversive, pivotally placed to expose a “dangerous and extreme technology” whose sole aim is to extend the shelf-life of harmful fossil fuels for corporate profit.

ON STALIN'S TEAM by SHEILA FITZPATRICK

ON STALIN’S TEAM: The Years of Living Dangerously in Soviet Politics

SHEILA FITZPATRICK

Melbourne University Press, 2015, 364 pages

Review by Phil Shannon

Joseph Stalin could not have been the brutally efficient tyrant he was without some help.  He had at his service a team of loyal auxiliary dictators, as the University of Sydney history professor, Sheila Fitzpatrick, explores in On Stalin’s Team.

 

There were a dozen men in Stalin’s leadership group, the Party’s top decision-making body (the Politburo).  Most familiar in the West were Nikita Khrushchev, the post-Stalin Soviet leader and exposer of Stalin’s crimes, and Vyacheslav Molotov, foreign minister and Stalin’s second-in-command who was jokingly nicknamed ‘stone-bottom’ by his peers (from Leon Trotsky’s withering reference to Stalin’s Politburo as ‘the Party bureaucracy without souls, whose stone-bottoms crush all manifestations of free initiative and free creativity’).

 

The muster of revolutionary veterans on Stalin’s team included Sergo Ordzhonikidze (“charismatic and hot-tempered”), Andrei Malenkov (the “quintessential apparatchik”), Andrei Andreev (listening to Beethoven on his portable gramophone on road trips to conduct Party purges), Lazar Kaganovich (a ‘200% Stalinist’ with a taste for shouting, swearing and hitting subordinates) and Anastas Mikoyan (a canny survivor able to duck trouble).

 

Wherever repression was needed, “the team joined in, a gang of schoolyard bullies” - they signed off on lists of party members for whom the secret police had recommended the death sentence, and they travelled the provinces to preside over party meetings which resulted in the arrest of regional party leaders.

 

It is, says Fitzpatrick, a mistake to, as Trotsky did, dismiss Stalin’s lieutenants as second-rate nonentities for they showed energy, zeal and initiative in carrying out Stalin’s orders.  They were not totally robotic.  They risked censure (and worse) by defending their bureaucratic corner in jostles over budgets and the pace of economic transformation.  They tried to save friends and colleagues from Stalin’s mass terror, and they wavered over the expulsion of Trotsky from the Soviet Union.

 

Team members had reservations about the arrests and scapegoating of ‘bourgeois’ engineers and other ‘wreckers’ for the failings of Stalin’s policy of rapid industrialisation.  Stalin’s post-war anti-Semitic turn in search of new enemies met with team members’ “silent disapproval”.  In private conversations amongst themselves, they could be maliciously critical of Stalin.

 

This dissidence was, however, feeble, ineffectual and cowardly.  Even after Stalin’s death in 1953, which the team welcomed, they dutifully paid public homage to Stalin as a great leader even if he made occasional ‘mistakes’.

 

With an eye on reputation management, they could conveniently pin the guilt for the scope and savagery of the mass terror on fellow Politburo member, Lavrenty Beria (head of the secret police), as a bad influence on Stalin, even though, argues Fitzpatrick, Beria was “the boldest and most radical” of the post-Stalin reformers.  When a commission set up to review Stalin’s terror reported that, between 1935 and 1940, two million people had been arrested, with 688,000 shot, for ‘anti-Soviet’ activity, the Politburo had Beria executed, absolving their own complicity in Stalin’s political slaughter.

 

The team had been justifiably fearful of themselves falling victim to Stalin’s manic punitive suspicion (some were, indeed, ‘eliminated’) but fear was not the main glue binding the team to Stalin – they shared his values and beliefs in their perverted vision of ‘building socialism’.

 

Stalin’s team do, however, find a measure of redemption through Fitzpatrick’s method of historical exposition which prioritises the characters and personal drama within Stalin’s team.  She acknowledges that this risks humanising her subjects with cosy, ‘at-home-with’ vignettes but she argues that this is not in principle unacceptable, that she is an historian not a prosecutor for the anti-Stalinist cause.

 

This is tricky historiographical territory, however, if it leaves out, as Fitzpatrick does, the broader analytical context of the societal interests that personal actors represent and serve.  In post-revolutionary Russia, wracked by war, blockade, backwardness and isolation, the party-state bureaucracy became a politically and materially privileged stratum whose protector was Stalin.  His team was the elite of the elite, committed to preserving their status by waging violence against the principles of socialist democracy, equality and internationalism.

RED PROFESSOR: The Cold War Life of Fred Rose by MONTEATH & MUNT

RED PROFESSOR: The Cold War Life of Fred Rose

PETER MONTEATH and VALERIE MUNT

Wakefield Press, 2015, 373 pages

Review by Phil Shannon

Australia’s secret police, ASIO, had codenames for those in the Commonwealth Public Service it suspected of spying for the Soviet Union during the Cold War.  One of them was ‘Professor’.  Was it Fred Rose, ask the Flinders University academics, Peter Monteath and Valerie Munt, in their biography of the Australian communist and anthropologist.

 

The 1954 Royal Commission into Espionage, called by the conservative Prime Minister (Robert Menzies) just before an election to capitalise on the defection of the Russian spy (Vladimir Petrov) in Australia, found nothing to warrant criminal prosecution of Rose (or, indeed, any of the suspects hauled before the Commission), despite ASIO’s feverish snooping.

 

Innocence did Rose no good, however, as he was tarnished by judicial insinuation as an ‘unsatisfactory’ and ‘unreliable’ witness thus confirming Rose’s view that the Commission ‘subverted the principle of trial by jury’ and was intended to ‘smear liberals and progressives with lies and rumours’.

 

Rose, born in London to Tory parents, had been radicalised at ‘Red Cambridge’ by the failings of capitalism during the 1930s.  Nazi racism, in addition, sparked his academic interest in anthropology, and a moral and political  rejection of ‘bourgeois anthropology’ as pseudo-scientific gloss for imperialism’s ‘civilising mission’.

 

Rose pursued his scientific studies in Australia where his “scholarship and political activism converged” as he examined how Aboriginal Australians coped with the imposition of a capitalist economic order, particularly its mining and pastoralist arms.  Rose opposed assimilationist policy in favour of Aborigines ‘adhering to their own culture and way of life’ based on indigenous ownership of land.  He found a receptive political home in the Communist Party of Australia (CPA), which he joined in 1942.

 

As anthropology was still then an ‘amateur’ science, poorly served by universities, Rose had to earn his crust elsewhere, first as a government meteorologist, then as a senior public servant with a special focus on the development of northern Australia.

 

ASIO’s obsessive anti-communism, however, cost Rose career promotions, his public service job and any prospect of a university profession in the country.  His professional lifeline was emigration to East Germany where he headed up anthropology at Berlin’s Humboldt University.

 

With this move, however, came another commitment, one willingly entered into by Rose, to spy for the East German secret police, the Stasi, in defence of what he saw as a socialist state.  Rose was not alone in this – at its peak, the Stasi employed one full-time spy for every 180 citizens, not counting its even larger number of contacts and informants like Rose.

 

There was no cloak and dagger, no seductive allure of the international man of mystery, in Rose’s undercover life.  Rather, his was the workaday, low-level observational domestic reporting on colleagues, students, friends and family. 

 

Rose had material and professional reasons to be grateful to his new host country but there was a socialist alternative available to him as a Marxist dissident, or at least as an academic who steered clear of complicity with the Stasi.

 

For Rose, however, who sided with the Socialist Party of Australia after the pro-Moscow hardliners split from the de-Stalinising CPA in 1969, there was too much political capital invested in his new neo-Stalinist homeland for him to take a more self-critical stance of his undercover role in its defence.  ASIO must share much of the blame for this, however, because their career-wrecking, character-assassinating frame-up of Rose forced him into the arms of their Cold War opponent.  

 

Nevertheless, Rose, who died in 1991, could have rejected both ASIO and the Stasi, and left his reputation as a Marxist anthropologist, and an activist for Aboriginal rights, unclouded by false allegations of, and real activity in, assisting the anti-democratic states the political police serve.

THE DIRECTOR IS THE COMMANDER, Anna Broinowski

THE DIRECTOR IS THE COMMANDER

ANNA BROINOWSKI

Viking, 2015, 324 pages

Reviewed by Phil Shannon

In Pyongyang in 2012, wedged in a car between her North Korean Workers Party minders on a sweaty, 40 degree, trip to meet the Stalinist north’s leading film directors, actors and composers, the Sydney film-maker, Anna Broinowski, takes a surreptitious spritz of perfume, to the delight of her foreign film crew who spy the label ‘Kim’ on the bottle of cologne - ‘you have a perfume named after the Dear Leader!’.

If only they knew, writes Broinowski in The Director is the Commander, that the ‘Kim’ in the label refers to the Kim Kardashian from the West’s “trashy celebrity culture” and not to North Korea’s harsh rulers (Kim Il Sung, Kim Jong Il and the current Kim Jong Un), they wouldn’t be laughing at all.

Broinowski is the only Western film-maker ever granted total access to the North Korean film industry which has “built one of the most successful propaganda machines on earth”.  The visit resulted from a spontaneous career decision by the employment-strapped, “between projects”, freelance documentary director who had “spent her twenties steeped in Marx and Billy Bragg” and was now campaigning against a polluting coal-seam-gas (CSG) mine in her local public park in suburban Erskineville.

An ABC producer had given Broinowski a smuggled copy of Kim Jong Il’s cinema manifesto, The Cinema and Directing, and Broinowski had an inspiration.  The Hollywood-loving Kim Jong Il, she notes, had himself made 1,400 films which were, she says, “funny – in a bad way” because of their melodramatic acting, jerky camera moves, didactic dialogue and out-of-sync dubbed sound as their North Korean casts would randomly swell into song and deliver turgid, ten-minute death speeches extolling the greatness of Kim. 

Could the techniques of the North Korean propaganda films, “whose very oddness gave them a unique appeal”, be harnessed to attract viewers to a non-conventional documentary and help stop the local CSG mine, Broinowski wonders?

Such a film might also help break off a chink or two from the wall of Western derision and hostility that surrounds all things North Korean.  Broinowski has no illusions about the human rights abuses, rigid conformity and cult of personality that pervade North Korea where even inadvertent failure to parrot the regime’s ridiculous slogans could brand someone an ‘ideological criminal’ and invite a (sometimes one-way) ticket to a ‘re-education’ gulag.

North Korea’s reputation is grim enough without being supplemented by the fabrications that Western propaganda routinely forges, says Broinowski, but is there some place between the regime’s giant propaganda façade and the West’s “beyond evil” view of North Korea where brainwashed automatons live in abject misery and eat grass to survive?

She finds some aspects of North Korean reality not unappealing - “capitalism has been turned off” and with it the visual and aural noise of cars, advertisements, plastic bags, video games, fast food, leaf-blowers and crystal meth addicts slumped in pools of their own vomit.  “This would never happen in Pyongyang” becomes her “new righteous mantra” as she ruefully reflects on such urban blights when back in Sydney.

This somewhat flippant upside, however, is spoiled by the sense of menace Broinowski experiences in the North Korean background – the constant surveillance, the censorship of what she can and can’t film, and the anonymous ‘Man in Black’ taking notes in the corner whenever Broinowski meets her North Korean colleagues for interviews and discussion of her anti-CSG mini-film, The Gardener.

She takes hope, however, from the occupational camaraderie between the Australian and North Korean film crews, and from the joking, profanity, flirting and friendliness that escapes from beneath the routinely sunny propaganda monologues delivered by her well-rehearsed interviewees.  This reinforces Broinowski’s aim to “humanise the North Koreans … and make the case for cultural diplomacy over military threats and sanctions”.

Her documentary, premiered in 2013, “reproduces the key tropes of the North Korean propaganda movie in the middle of Sydney – a suffering working class heroine, people randomly bursting into song, sentimental nature metaphors, two chaste star-crossed lovers and an evil capitalist who comes to a sticky end”.  Contained in a longer critical documentary (Aim High In Creation!) about the making of The Gardener, Broinowski hopes it will be more art than a crude parody of the North Korean movie house-style.

She realises, however, that “the combination of Kim Jong Il and coal seam gas was always going to be a stretch”, and, sharing her doubts, are some of her Sydney anti-CSG activists who were a little perplexed and made uneasy by “linking their cause to a totalitarian regime”, whilst conservative commentators gloated in the opportunity to launch into their own favourite propaganda chorus on the sins of socialism and environmentalism.

Others, however, embraced the documentary for its novelty, surrealism, humour and emotional warmth - and for its excellence as political cinema.  All these virtues are reinforced by Broinowski’s book, with its irresistibly bright and breezy tone, and its challenging probe into the nature of propaganda, both totalitarian-state and liberal-capitalist.

NEVER ENOUGH: Donald Trump and the Pursuit of Success by MICHAEL D'ANTONIO

NEVER ENOUGH: Donald Trump and the Pursuit of Success

MICHAEL D’ANTONIO

St. Martin’s Press, 2015, 389 pages

Review by Phil Shannon

What will America and the world be getting from ‘President Donald Trump’ if such a frightful prospect comes to pass in 2016?  Michael D’Antonio’s biography of the Republican Party’s front-running Presidential candidate gives us some clues - denial of global warming, vaccination, marriage equality and abortion; insults and worse for religious and ethnic minorities, and for women and the disabled; and a turbo-charged American imperial power.

 

The winner, on the other hand, would be big business, Trump’s true religion.  The business mogul’s early training was one of honing a Social Darwinist survival of the most aggressive (Trump thrived during his disciplinarian schooling at a military academy) combined with the pampering that only true family riches can provide (the rain-marred trials of young Donald’s paper round would be relieved by completing it in his father’s chauffeured limousine).

 

Trump likes to dismiss those born into wealth as members of ‘the lucky sperm club’ but he glosses over his own origins in one of America’s wealthiest dynasties, which made its fortune, not through honest, hard work, but through buying real estate cheap and selling it dear, from the 19^th century Gold Rush to New York in early century boom-time and 1930s Depression.

 

A family fortune of around $100 million assisted Trump’s emergence as a high-end property developer in Manhattan in the late 1970s, as did another family inheritance - the financial cultivation of politicians and government bureaucrats to secure favourable contracts, construction permits, zoning approvals and tax concessions.

 

The Trump brand expanded to every enterprise he owned (skyscrapers, hotels, casinos, airlines, beauty pageants, golf resorts, football teams, ‘universities’) and those he licensed to use the Trump brand (board games, credit cards, mattresses, deodorants, chocolate bars, neckties, steaks, cologne).  Trump’s gold-glittering name adorned the ostentatious symbols of his personal wealth - his 300 metre yacht, his $10 million helicopter, his $100 million private jet.

 

Not every business venture was a success, but because Trump’s loans were in the billions rather than thousands, he had power over the banks and other lenders who could not afford to see Trump fail.  Unlike ordinary American borrowers who were ruined by the banks if they defaulted, Trump’s creditors advanced him new loans and let his assets alone.

 

Trump made his pile through hard-headed, Trump-friendly deals.  These were driven by Trump’s insatiable greed, massive self-belief and a firm faith in the bankability of notoriety.  Trump begins each day with a sheaf of papers covering all his press mentions, positive or negative, judging their value to his brand not by their content but by their total weight.

 

With Trump, publicity is all.  Three previous Presidential electoral feints were all designed to promote his self-help/get-rich books or his reality television show, ‘The Apprentice’, a brutal ode to competitive capitalism.  Trump’s current tilt at President is motivated by the lure of becoming CEO of America, the missing political Godhead so far in Trump’s deities of “wealth, fame and power”. 

 

The political currency of Trump’s campaign, says D’Antonio, is that of a populist ‘anti-politician’, stoking public outrage against minorities whilst lambasting ‘elites’ such as the White House ‘Establishment’ and big money political donors who pay too little tax.  This resonates loudly enough with Trump’s power base – aggrieved, economically-struggling, white, southern males - to drown out their concerns about Trump’s serial lying, refusal to apologise and evasiveness on policy detail.

 

The ascent to economic and political stardom of Trump, the self-styled “people’s billionaire”, began four decades ago, says D’Antonio, at exactly the moment when working class and corporate income differentials began to diverge exponentially and when collective trade union responses to this escalating inequality receded.  Only if individuals aspired to be like Donald Trump, and if the ‘undeserving’ were delegitimised, could you find success.

 

D’Antonio’s penchant (apart from being besotted with the mechanics of business deals) is for psychological analysis, diagnosing Trump’s obsession with himself as ‘narcissistic personality disorder’.  The real pathology, however, is the environment which fosters the Trumps of the world - the economic system of winner-take-all capitalism which rewards the privileged, greedy and ruthlessly competitive.  Donald Trump is truly the poster-child for the 1%, for whom too much is, indeed, never enough.

BORN TO RULE: The Unauthorised Biography of Malcolm Turnbull by PADDY MANNING

BORN TO RULE: The Unauthorised Biography of Malcolm Turnbull

PADDY MANNING

Melbourne University Press, 2015, 442 pages

Review by Phil Shannon

The Liberal Prime Minister, Malcolm Turnbull, likes to downplay his image as a privileged, wealthy silver-tail by touting his time as a flat-dwelling young boy from a broken family (his mother abandoned the family when Turnbull was only nine) but his upbringing was not all that humble, writes the business journalist, Paddy Manning, in his biography of the former investment banker.

 

Head prefect at the elitist and pricey Sydney Grammar, law graduate from Sydney University and Rhodes Scholar at Oxford, Turnbull’s remarkably soft hard times ended with his property-dealing father’s death in 1982 when the 27-year-old Turnbull, the sole beneficiary of a multi-million dollar estate, inherited well north of $2 million.

 

This kitty provided a hefty leg-up for Turnbull’s stellar wealth accumulation.  As a lawyer and political journalist, he had come to the attention of Australia’s fifth richest man, the media mogul, Kerry Packer, who took Turnbull on as his chief legal counsel.  Surrounded by money and wanting his own pile, Turnbull used $50 million from Packer and one of his corporate mates to make his private mint through merchant banking.  Million dollar corporate advisory fees and commercial investments funded Turnbull’s six-figure salary and seven-figure share dividends from his bank.

 

The Prime Minister is now valued at $200 million, helped in part by investments squirrelled away in the Cayman Islands tax haven where the ability to defer tax on capital gains effectively reduces, in real terms, the cost of that tax over time.

 

Turnbull’s political career has not been quite as straightforward as his monetary one, with Turnbull playing both centre-right and centre-left over the years.  Although joining the Liberal Party in 1973 (before leaving it a decade later after unsuccessful pre-selection bids), Turnbull had disagreed, for example, with the 1975 constitutional coup against the Whitlam Labor Government, writing that the Fraser Liberal Opposition was behaving like ‘political fascists’ in their haste to block supply and cajole the Governor-General (‘this unelected ribbon-cutter’) to sack Whitlam under the ‘reserve powers’ of the (monarchist) Constitution.

 

As late as the 1990s, Turnbull made and fielded offers to join the Labor Party, which had fewer rabid monarchists and other knuckle-dragging reactionaries, before rejoining the Liberal Party in 2000 as the natural political home for the super-rich.

 

The Liberal Party was also where an easier path to personal power could be bought by a seriously-cashed-up Prime Ministerial aspirant.  In “the biggest branch stack since Federation”, writes Manning, Turnbull took on the sitting incumbent in 2004 for pre-selection as the Liberal candidate for Sydney’s plush eastern suburbs seat of Wentworth, with ring-ins by both candidates swelling the local branch membership to half the party’s total national membership.  Turnbull’s two hundred expatriate Harvard University members helped, as did $600,000 of his own money, in Turnbull becoming, as some rudely said, the ‘Member for Net Worth’.

 

With Turnbull now Prime Minister, the Liberals hope to have found their more suave, more saleable, leader than their brand-damaging predecessor, Tony Abbott, with his overt austerity program and Royalist, religious and far-right hang-ups.  Turnbull, the high-wealth, ‘small–L’, Liberal, wraps the Party’s core economic neo-liberalism and market fundamentalism in the more palatable packaging of social liberalism (marriage equality and the like).

 

As Manning relates, there is a “Good Malcolm” - clever, charming and urbane, the charity donor, the mild social liberal.  There is also a “Bad Malcolm” - arrogant, domineering, capable of black rages and verbal and physical aggression, the believer that charity begins at home (claiming taxpayer-funded travel allowance for staying in the family-owned, $800,000 Canberra house when parliament is sitting).

 

When it comes to the class war, however, there is only the one Malcolm, the corporate Malcolm.  As Manning writes, “there is nothing in Turnbull’s professional experience, or his rarefied social circle, that has prepared him to understand the problems faced by millions of ordinary workers”.

 

According to elementary political science, the role of the Liberal Party of Australia is to represent, protect and enhance corporate class interests.  Long before the Republic campaigner hypocritically pledged ‘true allegiance to Her Majesty’ at his ceremonial swearing-in as Prime Minister, Turnbull had pledged life-long loyalty to Australian capitalism.

 

The political trick for Turnbull is to gain buy-in to the Liberal Party’s narrow class role from those who don’t inherit millions, live in mansions or invest in tax havens.  The Abbott clunker may been traded in for the smoother Turnbull model but the class interests represented, and opposed, by both leaders remain the same.