IS IT SIMPLY BLACK MONEY OR THE BLACK ECONOMY OF PARASITIC RENTIER CAPITALISM!
The BJP and its newly projected hero Narendra Modi is now compelled to eat its own words over the black money return issue. Before the Lok Sabha elections, in the din of increasing public dissent against a series of corruptions that unfolded during the UPA regime, the demand for return of black money stashed abroad was raked up with much hue and cry among others by the BJP leaders and dubious individuals like yoga guru-cum-businessman Baba Ramdev etc?
In front of the public, who were already disgusted with the UPA regime, the BJP leaders promised to recover and return the black money kept secretly overseas within hundred days of assuming power. ??. on April 17 in Thane, Maharashtra, Rajnath Singh said all the black money stashed abroad would be brought back within 100 days. Venkaiah Naidu is wrong when he says this promise wasn?t made?.. on one occasion whilst campaigning Narendra Modi said there was enough black money abroad for every Indian to receive Rs. 3 lakh. On another, he upped the figure to Rs. 15-20 lakh?? thus also arousing the false hope within the masses that as if on return of such hefty amounts to the country the lives of the masses will change and they will get the opportunity to meet their dire needs. Another BJP leader Ravi Shankar Prasad retorted in response to the UPA regime?s plea on January 18, 2011: ?The government?s argument that it can reveal the names to the Supreme Court but not to the public due to double taxation is baseless.? [There are shades of grey when it comes to black money , Karan Thapar, HindustanTimesNew Delhi, December 06, 2014] Presently sitting in their government, enjoying the freedom of a comfortable majority, the same BJP is now seen to repeat the same helplessness and alibi for which they once castigated and accused the Congress Party.
Naturally a number of questions come up that what is black money after all, that one after another the powerful ruling parties are succumbing before it helplessly? Are all such ill-earned money and accumulated wealth kept secretly in some Swiss and European banks only? From where are these monies originating and are they simply left frozen by their owners in those banks? The capitalists and their economists have defined black money to be unaccounted money which along with the sources from which it has been acquired, has not been disclosed before the government and thus the tax due to be paid on it is avoided. Probably to identify it as a wealth which is inauspicious and evil it has been named black distinguishing it from white or legitimate money.
But is such black money really hated, unwanted and sought to be removed by the capitalists? Are the capitalist class defined official and legal white money completely separate from it and thus sacrosanct? An openly ardent supporter of present globalization-liberalisation policies of the capitalists, economist Bibek Debroy, one of the important members of the Modi government?s newly formed Niti Aayog, says--- ?I hate the terms ?black economy? and ?black money?,??.. ?Their use suggests that the world of finance is neatly divided into black and white, and the twain never meet. The distinction between the colours of money is actually blurring?black becomes white and vice-versa.? [24 September 2011,The Unhurried Man?s Guide to Black Money, BY Alam Srinivas, The Open Magazine] . Thus even an established capitalist economist also admits that the distinction between white money and black money is gradually fading away and one gets transformed into the other. Through the comment of another capitalist economist it also becomes further clear that quite contrary to the distinction and opposition between the two kinds of money as the capitalists define, black money has important utility for the capitalist system. In the words of Barun Mitra, managing trustee, Liberty Institute, ?Illegal incomes provide an economic function,??. ?It helps lower transaction costs in economies where they are high. It lubricates economic wheels. Its impact is positive, or it won?t be created in the first place.? [Ibid]. This a bitter truth even experienced by the common masses. Many a times we all go through the experience that even in order to avail an eligible service within reasonable time how bribes act as lubricants. It has also been exposed from the revelations of 2-G, 3-G scam that how through so-called lobbying agencies big companies like Reliance, Tata even got their favoured person chosen as ministers of important portfolios, that the international arms dealers use their touts to arrange for kick-back moneys at proper places in the government so that their goods are purchased. Every scam, only a very very few of which are exposed before the public, contains similar tales of this ill-paid and ill-gotten money and amassing of wealth by a handful. This is natural in any society where money rules the roost and capitalism is just that.
Therefore it is not at all surprising that these capitalist moneybags and their paid economists decide about a very constricted definition of black money and even change it from time to time and country to country to suit their interests. Thus open lobbying for business deals and contracts, obviously using the influence of money, openly financing of candidates of the big political parties for elections, etc. are legalized in advanced capitalist countries like the United States while it is not yet allowed in countries like India and still considered to be one form of bribe. A very recent example can be found in the actions of one of the foremost retail giants of the world, the U.S. based Walmart. [Wal-Mart's 'Invisible Army' of Lobbyists, Al Norman Posted: 22/07/2013 Updated: 21/09/2013 ] It has been accused of spending $25 million over 4 years from 2008 for lobbying the U.S. government to influence and even pressurise its entry into India through FDl in retail trade. Questions were raised whether part of the huge money used also reached the ministers in this country which is an illegal act here while regularly it does the same spending millions of dollars to influence the U.S. Government. [India Probe on Wal-Mart Lobbying Inconclusive, Document Shows By Adi Narayan and Abhijit Roy Chowdhury Oct 4, 2013] [A Pocket Guide to Lobbying in the United States By GARDINER HARRIS DECEMBER 11, 2012 http://india.blogs.nytimes.com/] With the spread of globalization ?liberalisation policies in countries like India, as the capitalists are more blatantly asserting their money-power they have also started demanding legalization of such things here. The capitalists and their governments and ruling parties thus define and change the meaning, cover and uncover the use of corrupt or black money at their will to camouflage their corrupt practices pervading in diverse ways throughout the society. At the same time they involve the masses in the cacophony against corruption of black money being secretly stashed away in Swiss banks. To divert the attention of the masses from the real widespread corruption and its roots in society and project themselves as fighters against corruption one capitalist party is utilised against another until that party also assumes power to continue with the same thing.
The promises of recovery and return of black money from Swiss banks is nothing but a wild goose chase. The estimates of actual illegal amounts kept by Indians as claimed by different political leaders, media, and economists have been wide widely varying as no confirmed communication from the Swiss or nearby banks in Europe has been there. Only annual deposit figures are published by the Swiss National Bank which include both legal and illegal deposits. Whatever came out in recent times have much been accidental. The 627 names of depositors placed in Supreme Court from a Liechtenstein bank was purchased by the German government from an ex-official of the bank. Similarly the HSBC bank list was stolen by a software expert and handed over to the French government. The capitalists always maintain secrecy about their businesses however black or white money or method be involved in it. And Swiss Banks are particularly famous for their ?confidentiality clauses? for years which the government and the leaders knew much before raising such hue and cry. [Only A Wild Goose Chase For Black Money In Switzerland, D Ravi Kanth, EPW, Nov 22 2014].Moreover they also know the dangers of actually disclosing the names in public as names of very many big-shots of this country to which these politicians are tied up in different ways will be exposed. So only false promises and futile exercises is their method to hoodwink the people.
Are those money stashed away secretly abroad in Swiss banks only black money? Actually that is only a very small part of the total huge black money economy operating in and out of the country. It is quite an open fact that in the real estate business, competition for cornering of big government contracts through kick-backs, share market or securities bond scams like Ketan Parikh or Harshad Mehta scams, the privatisation or resource allocations like coal block allocations, all such repeatedly involve large amounts of unaccounted, money. What does such transactions generate every time? Obviously black money. A parallel black money economy operating through hawala trading has been recognized to be in existence for decades. Now the tax-havens and Double Taxation Avoidance Agreements (DTAA) have arrived in international trade and business from the decades of 1980s with the advent of liberalization policies of the capitalists. They have changed the definition of corruption and illegal money to suit the capitalists. A number of places like Mauritius, Singapore, Dubai, Cayman Islands. Virgin Islands, not at all involved in any activity related to actual international business and production have cropped up as centres of just shadow offices or nameplate addresses of MNCs used in order to avoid lakhs of crores of rupees of taxes. These are the presently much talked about tax havens [may be called ?heavens? for capitalists!]. Through such nameplate addresses or small letter-box companies established by big MNCs in the tax havens the FDIs and FIIs come in as investments. Recent reports state that almost half the total amount of FDIs and 40% of the FII for the share market come into this country through the Mauritius route. 15000 such companies are established there now. Majority of the big telecom giants who have come to India route their funds through Mauritius to take advantage of the Double Taxation Avoidance Agreement (DTAA) and enjoy tax exemption. [ What?s really at stake in the Vodafone tax case----Rahul Varman] Earlier in 1985 in one McDowell company tax avoidance attempt the Supreme Court castigated the company exposing the tax avoidance ploys adopted by it. By 2003 the scene has changed. When a tax official lifted the veil to expose a number of foreign capitalist investors (FIIs), who by then mostly started operating through Mauritius, to ascertain the actual place of management and their residence, the investors started crying hoarse over it until the then finance minister of NDA government tried to oblige them with a new circular that due to their letters of Mauritius route no tax needs to be paid. The High Court rejected it stating it violated the Income Tax Act. The government before the Supreme Court pleaded in the name of promoting investment overturning the earlier McDowell judgement calling it legitimate taxc planning. The FIIs, the quick flight capitalists that hover over the world for only returns from investments and caring none about production had the last laugh. [Capital gains, everyone else loses, Prashant Bhushan march 2, 2012]
Little known Cayman Islands, a small British owned island of 624 sq.km in the Carribean, has now become the world?s fifth largest banking centre. It has also been in the news over the recent Vodafone tax dispute. The Vodafone?s acquisition of Hutch-Essar more clearly reveals how the big capitalists are amassing wealth in unscrupulous ways with open aid by the governments and the ruling political parties. [ What?s really at stake in the Vodafone tax case----Rahul Varman] . The Central Board of Direct Taxes slapped a 11000 crore tax due from Vodafone for the acquisition, an amount equivalent in 2007 to the budget of the whole MNREG programme and once again there was furore among the capitalists and their associations. Just showing the purchase of one share of a holding company in Cayman islands, through which the telecom company of India Hutch was acquired, Vodafone has wriggled out without paying tax. The UPA passed a law GARR to collect taxes from past. The capitalists dubbed it ?financial terrorism?. In another case involving Vodafone [and Shell also separately] on tax claims of Rs 3200 crore on transfer pricing of shares, allegedly at undervalued prices, between the subsidiary and holding companies of Vodafone the Bombay High Court has struck down the claim of the Tax department. The noticeable thing is that the capitalist association FICCI has recently congratulated the present BJP led government for deciding not to appeal against the judgement to the Supreme Court [FICCI welcomes Attorney General Mukul Rohatgi's stand on Vodafone transfer price case By PTI | 26 Nov, 2014]. Further, successive governments and their ruling political parties have allowed investors to keep their identities secret and invest capital in this country through another special device called Participatory Notes. All these being done on the plea of bringing in investment, is enabling the capitalists, to bring back their corrupt, so-called black money into open, so-called legal circulation to reap more profits, mostly made from the secondary market price fluctuations in shares. This turning of black to white legal money is what the capitalist economy terms as money laundering, against which also they claim to take various steps only to allow it through the back-door. Then the liberalization policies has also brought in another form of legalized gambling on prices of commodities, even essential foodcrops, oil, metals called Futures Trading. Thus on the issue of black money return many economists have openly admitted that all these avenues provided by the government must have been utilized by the Swiss bank account holders also to bring back their deposit amounts for more harvesting of profits. After so much of discussion and so little action by the governments the deposits cannot remain there. A report typically expressed this---?Only a fool would keep his money abroad to earn 1 percent interest when the Indian markets are booming and interest rates are still high. In 2006, according to the Swiss National Bank, Indian national money with Swiss banks was around Rs 41,400 crore. Then the din about foreign accounts started in India, and by 2008 the money started vanishing. In that year, the amount was whittled down to Rs 15,400 crore. In 2013, the figure was down further to Rs 14,000 crore?. [ Even disclosing all names won't bring back black money to India by R Jagannathan Oct 28, 2014 http://www.firstpost.com/]. But still the wild goose chase was promised to divert from the real rampant financial corruption being allowed and stir up the masses for electoral gains.
The stark fact that these capitalists and their political parties and the governments want to suppress is money capital begetting quick profit or more money is the norm of the present imperialist-capitalist economies worldwide whatever be the way. Numerous variations of shares, securities on mortgages and their derivatives and corresponding laws, tax havens, shadow companies etc are being used to create speculative windfall profits divorced from any real production or manufacturing processes. Speculation bubbles are being overblown to show huge profits which are ultimately bursting at some point of time to drag the real economies that include manufacturing industries repeatedly into sudden recession and crisis. Artificially inflated share and securities market booms are giving rise to bankrupt banks, financial institutions sucking out the real money and wealth created by the masses of workers and toilers through their labour in manufacturing processes . The common masses are ultimately getting pauperized while a small section of parasitic, rentier class of capitalists, their managers, the financial capitalists and their middlemen are either amassing huge, unthinkable quick profits or getting the governments? stimulus packages from public treasuries in terms of thousands of crores of rupees as compensation for loss in such trades. While the masses of workers, and other toiling sections are being subjected to more and more hardships in the form of cut-backs in their rights to livelihood and incomes on the plea of austerity measures to tide over the crisis created by this very corrupt, looting system of the capitalists themselves. Their exploitation that entails the profits coming out of unpaid labour is being extracted with more and more intensity and brutality. Standing on the exploitative economy of capitalists industries the whole capitalist-imperialist economy is presently being made to spread and become engulfed in repeated speculative frauds through financial juggleries. Not only what has been said about India but the sub-prime housing mortgages bubble, the IT bubble in the U.S. and parts of Europe are all evidences of this development of parasitic capitalism. Money-making without real value-creation through the labour but through such parasitic exercises is the one of the most significant features of present-day capitalism.
Can the overseers, the managers of such a system----the ruling political parties, their governments disclose about this fraud, this corrupt black economy, pervading throughout the world and even this country? Can they expose the dacadent parasitism of capitalism struggling to get out of the continuing recessions and stagnations created by their own policies of unbridled profit-mongering? They can only show the masses a red herring in the form of black money in the Swiss banks while falsely cheering us for the boom in Sensex, creating hopes through newer and newer financial bubbles and legalize the corrupt practices of capitalists for further loot and exploitation of the masses in the name of development. They show and involve us in the illusory return of black money while carrying on with their black economy within the country with the aid of the imperialist finance capital itself. Thus ?on one occasion whilst campaigning for elections Narendra Modi said there was enough black money abroad for every Indian to receive Rs. 3 lakh. On another, he upped the figure to Rs. 15-20 lakh?. But after forming the government on November , in Mann ki Baat programme, Modi said: ?Nobody knows, nor do I know, nor does the government know ? how much money is stashed abroad.? [There are shades of grey when it comes to black money, Karan Thapar,New Delhi, December 06, 2014, Hindustan Times]. Is it simply the black money in the Swiss banks that needs to be exposed? The rampant loot of finance capital, the continually aggravating attack of exploitation on the workers and toilers is day in and day out showing that it is the time to recognize the fact that the whole existing black economy of parasitic rentier capitalism to be dismantled. The masses are already showing their anger and dissent against all such kinds of ?corporate loot? starting from the U.S., Europe down to the countries like India throughout the world. It is the working class and toiling masses who labour for real creation of wealth for societies but remain deprived and tormented that must unite and rise to do that. None of those Modis and Manmohans or even Obamas can do that. Because they are very much the part and parcel of this parasitic capitalism.
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