Aid Masks Exploitation: Regulations are a Band-Aid to Capitalism's Crimes

Calculating the transfer of wealth from exploited nations to imperialist countries is a difficult task. Even those with the knowledge and time to do the research find that bourgeois economics does not look at things in terms that Marxists do. There are a number of excellent books by Marxists on this topic on our literature list.(1) Adding to this research is a recent report from Global Financial Integrity (GFI), which they call “the most comprehensive analysis of global financial flows impacting developing countries compiled to date.”(2)

“since 1980 developing countries lost US$16.3 trillion dollars through broad leakages in the balance of payments, trade misinvoicing, and recorded financial transfers… the report demonstrates that developing countries have effectively served as net-creditors to the rest of the world with tax havens playing a major role in the flight of unrecorded capital. For example, in 2011 tax haven holdings of total developing country wealth were valued at US$4.4 trillion, which exacerbated inequality and undermined good governance and economic growth.”(2)

According to the report, China is responsible for about a quarter of the Third World’s net resource transfers to the First World. Despite a growing finance capitalist class, China is still the largest proletarian nation providing wealth for Amerikans and other First World nations. A long fall from grace from when it was the most advanced socialist economy in history, reinvesting all of its wealth into building its own self-sufficiency and serving the needs of its own people.

Last year, the so-called “Panama Papers” brought more light to the issue of tax havens, and the role they play in allowing finance capitalists to move money in ways that avoid having to pay taxes to the states they operate in and often avoiding other legal restraints on how they do business. GFI points to tax havens, as well as illegal movement of capital goods, as playing large roles in facilitating this transfer of wealth from the exploited countries to the imperialist core countries.

Possible solutions to this problem provided in the cited articles are debt forgiveness, shutting down tax havens, and enforcement of fines by agencies such as the World Trade Organization (WTO).(3) Having powerful people monitor and fine other powerful people is like the fox guarding the hen house, and will never make fundamental changes in a system whose whole purpose is the drive for profit.

MIM(Prisons) supports the call for debt forgiveness for poor countries. As the report states, “for every $1 of aid that developing countries receive, they lose $24 in net outflows.”(2) A campaign to resist these predatory aid programs combined with forgiveness of existing loans would loosen the current death grip of imperialism on the exploited nations of the world. And if we consider the numbers below, 1:24 is a gross underestimation of the scale of exploitation going on.

Another powerful move to provide some relief to the poor under capitalism would be to enforce a global minimum wage through a body such as the WTO. Economist Arghiri Emmanuel showed the relationship between wage levels and the transfer of wealth between nations in the form of unequal exchange. While this recent work by GFI is more in-depth than most by looking at illegal practices such as reporting false prices to avoid taxes and restrictions, it ignores the hidden transfer of wealth that is enabled by the low wages that are violently enforced on the proletariat of the exploited nations. This transfer of wealth is not included in the $16.3 trillion transfer of wealth calculated by GFI. MC5 of MIM estimated wealth transfer to the imperialist countries at $6.8 trillion in just one year (1993), as did Zak Cope, who looked at 2009 with a similar lens but different approach to MC5.(4)

While GFI states that, “Every year, roughly $1 trillion flows illegally out of developing and emerging economies due to crime, corruption, and tax evasion”, their vision of a capitalism with more integrity would only eliminate an estimated 15% of the value exploited from the majority of the world for the benefit of the imperialist nations. We ally with such bourgeois internationalists on some of the demands mentioned above, but also take it further than they will to eliminate imperialism in all its forms and create a world without any form of exploitation or oppression, whether illegal or not.