'Aristocrats are anarchists': why the wealthy back Trump and Brexit
We know that politics makes strange bedfellows, but few alliances are more surprising than the one linking the ultra-rich to ultra-nationalists. What could the wealthiest people in the world have in common with those upending politics in the name of the “forgotten man”? As I have found in over a decade of research on global elites and tax havens, a shared political project unites them: both seek to weaken or dismantle international alliances that constrain them.
For ultra-nationalists, this project means “taking back control” of their governments from foreigners. For the ultra-rich, it means eliminating the controls that international organizations and alliances have imposed on them individually and as a class: a world without the EU, or without the Global Magnitsky Act, is one in which the people who appeared in the Panama Papers can get even richer and expand their influence over an increasing share of the world’s governments and resources.
Thus what the media has treated as two separate news stories are actually manifestations of one big story, linking the shocks of the Panama Papers, the Paradise Papers, the Brexit vote, and the 2016 US election. It is a consummate irony that ultra-nationalism has been repackaged for voters as an effort to regain local control, protect national boundaries and reassert the dominance of local ethnic groups. What has been sold to working-class and middle-class voters as “a war for the little guy” is in practical terms the wishlist of the ultrawealthy worldwide.
When Steve Bannon, who served Trump as chief White House strategist and is now fomenting populist revolution across Europe, called for “deconstruction of the administrative state”, he specifically targeted the systems of taxation, financial oversight, and public accountability that constrain the ultra-wealthy. The American hedge fund manager Robert Mercer, whose $60m offshore “war chest” bankrolled both Brexit and the Trump campaign, only began donating to political causes after the US Internal Revenue Service fined his firm $6.8bn for tax evasion. Arron Banks, the UK businessman with substantial offshore holdings, may have had a similar motivation: he became the largest financial backer of Brexit’s Leave.EU campaign following the imposition of costly international regulatory requirements on his insurance companies.
Even richer is the irony that ultra-nationalist campaigns have been funded by wealth hoarded offshore, courtesy of the same global elites demonized by Bannon and other selfproclaimed nationalists. Populist ultranationalism is a project bought and paid for by global elites and their tax haven wealth.
The links first started to become
apparent in the Panama Papers leak of May 2016, which showed that several of the most prominent supporters of Brexit held substantial assets offshore, in accounts that later came under investigation as conduits for illegal foreign influence – including contributions from Russia. That wealth helped finance the Leave campaign, which touted the importance of local control and taking back control from “foreign elites”.
Through the Paradise Papers we also learned that Donald Trump, who campaigned against the “corrupt globalism” of Hillary Clinton and proudly proclaims himself a “nationalist”, had surrounded himself with cabinet members whose vast fortunes are stashed in tax havens around the world. Some of these tax haven schemes link them to foreign adversaries of the United States.
This link between offshore finance and ultra-nationalism is not exclusive to the Anglo-Saxon countries. France’s Jean-Marie LePen, founder of the political dynasty behind the antiEU party Front National, was exposed in the Panama Papers leak for having stashed millions in offshore accounts. His daughter Marine, who now leads the party, recently mounted a presidential campaign that included the promise of a Brexit-like referendum on withdrawing France from the EU; this campaign was later found to have been financed by millions of Euros from Russian sources, funneled through offshore accounts based in Cyprus.
After interviewing 65 wealth managers in 18 countries, I learned that many individuals with enormous wealth and power deeply resent any institutions that limit their freedom or hold them accountable to obey the law. Thus, they form common cause with populist political movements, which attack the authority and legitimacy of policy professionals and politicians. In this effort, the ultrarich weaken the actors empowered to impose restrictions on them, liberating themselves to make even more money by flouting regulations, tax obligations, trade embargoes and other inconveniences. The goal, as a Guardian columnist wrote presciently back in 2012, is to “free the rich from the constraints of democracy” – and that, sooner or later, has the ironic consequence of aligning global elites with authoritarian nationalists. These wealthy individuals’ political inclinations may seem like relatively harmless selfinterest, until you consider the power they have to realize their ambitions. Many of the wealth managers I spoke with warned of client ideologies and offshore mechanisms that were openly hostile to democracy and popular sovereignty. One Zurich-based practitioner specializing in individuals with $50m or more in investable assets said that her clients saw themselves as “above nationality and laws”. Of their belief that any legal limitations placed on them were de factoillegitimate, she added: “It’s potentially very dangerous.”
A London-based wealth manager made a similar observation about the extreme power imbalance between his multibillionaire clients and democratic regimes: “I think what people fail to realize is that governments are now just little parishes. Who do you think is more powerful: Procter & Gamble or the government of France? P&G, of course. They can set down their business anywhere in the world they please. And high-net-worth individuals are the same way.” The problem was, he said, that onshore governments – particularly some in Europe and North America – didn’t yet understand their place in this new hierarchy. Thus, he added, “Social democracy is creating too big demands on the wealth creators.”
For that global elite, it is convenient and profitable to support ultra-nationalist movements. Unlike other insurgents, these elites have no desire to destroy the state: they enjoy public roads, fiat currency and other creations of government just like the rest of us; they simply want to weaken states’ power to constrain them. And that power lies not in the hands of any single government, but in the cross-national alliances that have been the only effective bulwark against the otherwise unchecked power of people with multiple passports and bank accounts scattered all over the world. It is these alliances that ensure fair treatment of workers, environmental protections, equitable taxation and progressive redistribution, even for those who can slip the surly bonds of national law by sheer force of wealth.
The rich know that they won’t bear any of the costs of populist movements. While Britain stockpiles food and medicine against the coming crisis of a nodeal Brexit, one of the billionaires who bankrolled the Leave movement quietly exempted himself and his family from the fallout by purchasing EU citizenship. Billionaire Trump supporters in the US buy New Zealand passports.
Yet even though the global network of offshore tax havens is a relatively recent tool for billionaires to advance their interests, the impulse driving the sponsors of populist movements is not. The novelist GK Chesterton had their number over a century ago, when he wrote: “The poor man really has a stake in the country. The rich man hasn’t; he can go away to New Guinea on his yacht. The poor have sometimes objected to being governed badly; the rich have always objected to being governed at all. Aristocrats were always anarchists.”
Populist ultranationalism is a project bought and paid for by global elites and their tax haven wealth