Capital Without Borders

One thing which should not be overlooked is the fundamental difference between wealth and income. For the most part, global wealth is concentrated in the hands of what is known as a “transnational class” which goes above and beyond to avoid disclosing its identity and thus it seeks obscurity and privacy as best as possible. The wealth of this transnational class has been accumulated in a dramatic fashion in the past, thus the gap between this class and everyone else in terms of accumulated wealth. On the other hand, income – which has now largely stagnated or declined despite inflation in many places – is largely attributed to the shrinking middle class or working class whose accumulated wealth pales in comparison to the wealth of this transnational class.

Brooke Harrington – an Ivy League professor and author of a book titled “Capital Without Borders: Wealth Managers and the One Percent” – notes that the creation of a “transnational class” that is essentially above the laws of almost all states emerged at the peak of the British Empire. “Wealth Managers” are then employed to enable this transnational class to transcend the constraint of laws and space. By transcending the laws and thus the sovereignty of states, this transnational elite is then rendered above the constraints of both geography and space. Thus, this “transnational class” is largely British in essence, although it has moved its wealth all over the place in order to avoid democratic accountability and thus taxes as best as possible. Countries who seek democratic accountability towards this transnational class are likely to experience “Capital Flight,” as in the case of Nigeria in the past and Afghanistan most recently.

Why the gap between this “transnational class” and everyone else keeps growing wider is because of the impact this transnational class has on the democratic accountability and education systems of the states with which this class of people interacts, according to Harrington. “State Capture” is the strategy employed by the transnational class in order to create safe havens and tax-exemption for their wealth. Although this transnational class takes pride in the philanthropic efforts which they carry out in the societies they interact with, any positive impact that these philanthropic efforts may have in the short-run are negated by the long-term negative impacts of this class on these societies, given the restraints on both democratic accountability and the educational systems placed by this transnational elite.

Another effect of “State Capture” is the suppression of journalists, intellectuals, and other voices who raise the alarm regarding the negative economic and social impacts resulting from the strategy of “State Capture” employed by the transnational class. Such journalists, intellectuals, and voices are either subject to intimidation, deportation, and violence in certain countries, or they are the subject of hacking, viruses, and spyware in more sophisticated countries, as in my personal case. Harrington also notes that the concentration of wealth in the hands of this “transnational elite” not only fosters the situation by which their wealth can grow, but the transnational elite also “monopolizes the opportunities” by which great wealth can be acquired.

Another interesting point which Harrington makes is that the transnational elite does not tailor its wealth towards consumption and buying things. Rather, this transnational elite uses its wealth in order to acquire “personal freedom, mobility, and privacy.” Harrington notes that the identities of all the individuals who make up the list of the world’s wealthiest individuals are concealed from the public. Most crucial to politics and the social fabric, however, is that the impact of this transnational class put the bourgeoisie middle class or upper middle class of various societies in a predicament. This predicament means that the bourgeoisie middle class or upper middle class must choose between siding with the transnational class, or stagnating and declining along with everyone else given the class disparities which arise as a result of the erosion of democratic accountability and education. And in the end, members of the bourgeoisie middle class or upper middle class end up becoming representatives of this transnational class, while the overwhelming majority are left to experience whatever fate or destiny is apportioned to them. Such is the given state of many places in a contemporary sense.

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