Friday, March 22, 2013

Day 9 - Welcome to Nowhere: an Introduction to the Tax Haven Economy and Supranational entities.

NOTE: I strongly suggest to read this article in bits. The article is structured into segments that you can return to. These are: Introduction & history, Nations are the building blocks of the global field (perspective on Nations), The tools and partisans of the shadow economy - how to navigate the network of nations as a multinational entity (multinational perspective) and Examples & Conclusion. Links are in this color and I suggest to check them out! Not all of them are links to Wikipedia articles.  



Introduction

Our world is a competition and whoever wins is granted power over others in the form of money. Competition within business means that the winner has the right to continue providing the goods and services that provides annual income, and the benchmark of victory is corporate wealth. Before doing the research for this article I honestly thought that succeeding in business was about hard work, but sadly in the world of today there is more money to be made in legal technicalities than there is in any products.

It has become common knowledge that the system is ”rigged” in the favor of a handful of individuals and corporations. However this knowledge is not enough but we must ask HOW the system is “rigged” – why we have allowed this to happen and why we continue to do so is another important question but I will not go into that here, to be honest I wouldn't even know how to approach the question. Nicholas Shaxson calls the current economy “the global shadow economy” when he describes how some multinational corporations and "cosmopolitan individuals" have actually become supranational corporations and individuals (beyond national legislation) in his book TreasureIslands: Tax Havens and the Men who Stole the World, and I will adopt the term for this article.

I've often heard the phrase “when in doubt, follow the money” and with this principle in mind a curious fact about the global economy is that at least half of all global trade (OECD estimates the figure to be over 60%) is done between the subsidiary companies of corporations. I do not mean that a subsidiary company of a corporation trades with the subsidiary company of another corporation but that subsidiary companies within a single corporation trade with each other and that it is these movements that create at least half of all global trade. This trade is done through regions and nations that are called by the name "tax haven". There is no commonly accepted definition for what a tax haven in fact is and I will thereby borrow the definition given to it by Nicholas Shaxson in his book TreasureIslands: Tax Havens and the Men who Stole the World. A tax haven is a "place that seeks to attract business by offering politically stable facilities to help people or entities get around the rules, laws and regulations of jurisdictions elsewhere". Another perspective on the size of the tax haven economy was given by the French Minister of Economy, Finance, and Industry Dominique Strauss-Kahn in 1999 in his speech to the Paris Group of Experts on the international financial channels of corruption that "Currently, offshore financial centres play a major role in the international movement of capital, regardless of whether its origin is legal or illegal. Some experts estimate that almost half of the global monetary stock passes through them.", and we can only assume that this amount has increased in the past 14 years.

In this article I aim to explain how and why this is done, who is involved in it and how this practice can make a multinational corporation into a supranational corporation (a corporation that is to an extent above all national legislation) and finally how this practice is used to “rig” the system in the favor of those who can afford these arrangements and how it effects the global economy.


Historical foundation

Our society stands upon the tradition of what has been done in the past and thus history is a defining factor within legislation as within everything else – or at least it has been thus far. Therefore to understand how the current situation became legally possible we'll have a look at three historical events:


1) First companies without any real-world activity

Around the turn of the century New Jersey permitted companies to be registered there even though they didn't have any active business there. Delaware soon followed and both experienced a flood of registrations. These companies were legal entities that functioned just like real companies meaning that they could be obligated by legal contracts and that they could make legal contracts in their own name (source 1, source 2).

Did you know that Delaware still holds
60% of the 500 worlds biggest companies



2) The secrecy of private banks being backed up by national law

The next stop on our history tour takes us to the year 1934 when Switzerland placed bank secrecy under the protection of criminal law. Traditionally doctors were bound to secrecy by their Hippocratic oath and the breaking thereof was punishable by law. Now a banker, an accountant, a bank employee and/or an official conducting an inspection could be prosecuted under criminal law if they broke the privacy of the bank customers whose financial information they got to see.


3) Activity under no nation's law

The final major event came at the end of the Second World War when Europe laid in ruins and her reconstruction was financed by the United States. The dollars sent to Europe by the United States were traded for the currencies of other nations to fund the reconstruction of Europe and the main stage of this trade was London. English legislation only regulated trade done in Pounds – no one had simply conceived of a possibility that foreign banks would trade with foreign currency on British soil. According to the British legislation this practice wasn't illegal even though it was not directly regulated. According to the researcher Ronen Palan (read the full article for the entire history) as a result of this a “space” was formed that was under no country's legislation.

The relevance of these three events will become apparent as I continue to illustrate the privileges large corporations enjoy today. Next I will illustrate what the current global field actually is.


Nations are the building blocks of the global field


The world has become global. Capital is able to move from nation to nation with little to no restrictions and the residency of a corporation or a wealthy individual has become a matter of organization. In spite of this the global field still consists of nations and all legislation that regulates the private sector is national legislation (international regulations and treaties aimed at the private sector such as the OECD Guidelines for Multinational Enterprises are not obligatory). We do have a thing called international law but it is “the set of rules generally regarded and accepted as binding in relations between states and nations” and it thereby doesn't legislate the private sector directly. Therefore even though we have international corporations and other multinational entities we do not have international legislation to regulate them directly.

Therefore when we look at the environment in which multinational entities operate we must look at national legislation as well as tax treaties and trade pacts that have been ratified by different nations (this means that these pacts and treaties are made part of national legislation through standard legislative procedures).


1) National legislation

Each country has a different set of laws and different amount of resources to enforce them. With this in mind the global field is like a buffet of countries from which a multinational corporation can cherry pick the locations for its operations. A multinational corporation is thereby free to choose from a variety of different laws on taxation, rules of employment, environmental protection and transparency and from a variety of different levels of enforcement. 

1.1) With all the different laws some policies remain the same

Even with the large variance between the laws of different nations some rules seem to remain pretty much the same. For example when it comes to taxing corporations the standard is that what is left over when the expenses of a company are taken from the revenues of a company is profits and it is this profit that gets taxed. Different countries have different rules on what can be treated as the company's expenses and are thereby tax deductible (money that can be spent without it being taxed as profit first). This policy is abused extensively in a way that corporations make their profits where they will be taxed the least. I will go over how this policy is circumvented with global organizations later in the article when I illustrate the tools and practices of multinational corporations. 



Normally when an individual or a corporation makes taxable gains they are taxed by the country they were made in according to the tax laws of that nation, and this country is usually the same as the country where the corporation or the individual claims residency  Now if these gains are made in another country the situation becomes more complicated. This usually means that the gains are taxed in the country they were made in as well as in the country that the corporation or the individual claims residency. This phenomenon is called double taxation.

Tax treaties are created between nations to address this problem by defining what form of income is taxed by how much and by whom. It is these treaties that effectively create "conduits" through which funds can travel from country to country in different forms without being taxed or by being taxed very little.

For example the national legislation of Holland places no tax on royalty payments. Holland has created tax treaties with many nations which lowers the amount by which royalties are taxed by the other nation to a very low level or lifts the taxation completely. This treaties are very beneficial to companies based in Holland that create their revenues from royalty payments. Thereby Holland has become an ideal nation for so called "royalty conduit companies" through which royalties can be gathered globally with minimal or no taxation. 



Trade pacts are aimed at reducing or lifting tariffs which is an important part of opening up world trade. For developed nations tariffs are a relatively small revenue stream but for an undeveloped nation it can be very important. This is because the resources to enforce national tax laws are usually quite scarce and thereby much of the economy runs unofficially and tax revenues cannot be gathered.

Many third world nations have joined the global trade without having any say in the matter by having to forge their trade pacts according to the requirements of the IMF and the World Bank as part of their loan conditions. This has made the trade pacts between the developed nations and the third world very one sided leaving the third world open for free trade while allowing the developed world to maintain high tariffs on imports such as foodstuffs (source 1source 2).

The consequences of these loans do not stop at one sided trade pacts. If you are interested in finding out more I suggest to read through this article published in the M.I.T's newspaper "the Tech" in 2002.  


The tools and partisans of the shadow economy - how to navigate the network of nations as a multinational entity. 


A multinational corporation can choose where it operates from and everything from where it claims residency to where its assets are stored is a matter of organization. By knowing what is legal and where a corporation is able to construct an organization that is able to make profits with minimal taxation. In this chapter I will go through the tools, arrangements and practices by which multinational corporations modify and channel their revenue streams to avoid taxation and legislation. I will also go through who all participate in these arrangements. 

On a personal note it seems to me that within the current liberal fast-phased world caring for your fellow man has been reduced to paying your taxes - and many use this as a justification to not consider others personally. I find it horrifying that this is what corporations avoid to make their operations more profitable because this means that “not caring” is a source of wealth within the current system. If this doesn't imply a state of dysfunction I don't know what does.  

NOTE: I do not claim that the list below is conclusive but it does paint a picture of how the system is being abused. 


1) The role of audit corporations and banks

The tax legislation of a single nation is usually quite extensive and to learn it all might take years of studying, and even then what one has learned is in constant change.



When a multinational corporation chooses the locations for its operations it must go through the tax laws of all the nations it is going to operate in as well as the tax treaties between those nations.

To help with this huge amount of work involved in exploiting the loopholes in combining different tax laws audit corporations and banks such as KPMGErnst & Young, Riggs bank and JPMorgan Chase provide services under the name of tax avoidance or in more common terms tax planning (sometimes the practice can be called transfer pricing).

Many tax codes prohibit these practices when they cross a certain line of deliberation yet corporate structures with subsidiary companies in tax havens and accounting practices that hide assets are sold as products for corporations so that they can operate in more "favorable conditions" (I will get to the detail of this in a moment). These "pre-made" organizations (or consultation on how to create them) aim to minimize taxation of corporations and wealthy individuals and to help them move their assets to locations where they are out of the reach of governments (thanks to extensive bank secrecy laws that many tax havens have for example).

To illustrate the scope of this I will quote the United States Congressional Record - Proceedings and Debates of the 108th Congress, Second Session: "...we concluded that the penalties would be no greater than $14,000 per $100,000 in KPMG fees ... For example our average deal would result in KPMG fees of $360,000 with a maximum penalty exposure of only $31,000." This was said by a senior tax adviser at KPMG and it is written on the page 8956 of the document (the towards the bottom of the first column). The case ended in KPMG admitting that it helped its clients to dodge $2,5 billion in taxes and it agreed to pay $456 million in penalties. The KPMG case is not by far the only one and JPMorgan Chase is mentioned to have engaged in similar activities on the same page of the document.

I do not have the figures for how much annual savings in tax payments KPMG generated for the clients it billed for $360,000 but never the less these figures place these practices into perspectives by showing that the profits they brought in were far greater than any penalty that was set for them. It is important to emphasize that the only service that KPMG's products provided was the exploitation of tax laws through technicalities to circumvent national legislation, and thereby the companies that benefited from these arrangements did nothing real to increase their value - yet they got ahead in competition as if they did.

When we consider how such gains - that literally rose out of nothing - might affect competition we can start to grasp how devastating these practices are to the economy. With prices of hundreds of thousands of dollars we can also conclude that these services are not for everyone but only for a very small minority of individuals and companies. Another point to consider is that each dollar saved this way is a dollar taken from the tax revenues of nations - away from public expenses such as education and healthcare.

If you are in Finland you can get these services from your local Nordea and the services will be provided through for example Nordea Bank Norge ASA Cayman Islands. (Source, a Finnish article)

The dubious services extended to wealthy individuals and corporations by banks and audit corporations do not stop at big corporations and wealthy individuals wanting to avoid taxes but they are also given to individuals whose actions are wrong by any standards. I am referring here to the case of the formed dictator of Chile Augusto Pinochet who stood accused of corruption, illegal arms sales, and torture. The Riggs bank assisted the former dictator to hide his assets during his house arrest in Britain and this was not the only direct and deliberate violation of the bank. An article in the Washington Post published in 2004 lists the following violations done by the Riggs bank "In May the bank agreed to pay $25 million in civil penalties for what federal regulators called 'willful, systemic' violation of anti-money-laundering laws in its dealings with the embassies of Saudi Arabia and Equatorial Guinea".

It would seem that when it comes to profits all morality must step aside.


2) How to cheat the customs

Many tax havens (from which for example KPMG sold subsidiary companies) have extensive laws and procedures on bank secrecy. This makes it possible to conceal the identity of an account holder or the owner of a subsidiary company registered to a tax haven which opens up many possibilities for dubious or even illegal activities.

Each day of the year an interesting thing happens on the Finnish boarder. Thousands of trucks transport goods from Finland to Russia (only a fraction of which originate from Finland) and around 60% of the value of what is being transported simply disappears according to Simon-Erik Ollus who published a study through Statistics Finland in 2006. The loss in value was determined by comparing the import/export statistics of Finland and Russia and the findings were quite staggering (see the figure below).

The average loss in the value of goods when they crossed the border from Finland to Russia in 2004: 


(translation: Great Britain, Netherlands, Finland, Switzerland, Greece, Italy, Estonia, Lithuania, Germany, Belgium, EU-25, Slovenia, Luxembourg, Denmark, France, Spain, Poland, Latvia, Sweden, Czech - sources: Eurostat and the Federal Customs Service of Russia)

Now how can this be and why is it done?

The first point to note is that The Office of the Prosecutor General has stated that giving a Russian official fraudulent information is not criminal in Finland! This has guaranteed a safe environment for a phenomenon that is call "kaksoislaskutus" which I did not find a translation for and which I will thereby explain (source).

In simplicity customs duties and exercise taxes (the payments involved in transporting a good from a nation to another) are calculated from the price paid for the products that are being transported. Thereby whenever cargo is about to move over a border it is sold to a company registered in a tax haven with a great loss thereby lowering its value to lower its customs duties and exercise taxes. Since tax havens have extensive laws on bank secrecy it is next to impossible to determine who actual owns the companies and whether or not the money used to buy these goods at a loss is returned after the products had crossed the boarder. In Finland this practice has become a business worth 10 to 100 million euros annually (source).

The huge volume of trade that moves through Finland to Russia makes the thorough inspection of each truck and cargo container next to impossible, especially when it comes to inspecting the validity of subsidiary companies registered to a tax haven on the other side of the globe. The situation becomes even more complicated when a single container has products from numerous companies. This process can take days, even weeks, and simultaneously a line of thousands of trucks wait outside to get through the customs (source).


3) How to avoid taxes

As I mentioned before an almost global rule is that the amount that is left over when all the revenues are deduced from all the expenses of a corporation is subject to corporate tax. Therefore when the tax day approaches it is important that the accounting of a corporation can find a balance between revenues and expenses so that as little as possible is left over. One might think that this serves no purpose but within a global organization it is cost-effective to have profits appear in locations and forms where they are taxed as little as possible. This can be done in a few different ways which I will go over here.

3.1) Transfer pricing 

I said in the introduction chapter that at least half of all global trade is done between the subsidiary companies of corporations and this makes transfer pricing the biggest tool for avoiding taxes. The obvious use for this practice is to cheat customs much in the same way as in the chapter above. A less obvious use for the practice is to transfer capital between nations that have appropriate tax treaties. The final and the most common usage of transfer pricing comes when the tax day is at hand and large corporations in essence buy and sell to themselves to have their balance sheets show figures that will lead to the minimum amount of taxation. Here depending on the organization and the situation products can be over- or under-invoiced to create the desired outcome (as little profit as possible and the transference of profit to locations where it will be taxed the least).

OECD states that even though companies would be affiliated with each other they should trade with the normal market prices (as if they weren't affiliated together). Yet even with this straight forward guideline many questions arise when the price is determined, especially for global organizations. A cellphone costs less in India than it does in Finland which is an example that illustrates this problem. The situation becomes more complex when immaterial things such as services, trademarks and royalties are being traded. What is the appropriate price for consultation or a maintenance for a system that only exists within a single company? There is not much risk involved in slight over- or under-invoicing compared to the normal market prices and with large enough sales volumes the difference of a few cents can lead to profits of millions. Yet in countries with low resources for inspections and enforcement (such as in the developing world) even outrageous under- and over-invoicing are very common.

To place some if this into perspective here are two charts from the executive summary of U.S. trade with world - an estimate of 2001 lost U.S. federal income tax revenues due to over-invoiced imports and under-invoiced exports by Simon J. Pak, PH.D:

ABNORMALLY HIGH U.S. IMPORT PRICES


ABNORMALLY LOW U.S. EXPORT PRICES



3.2) Unnecessary loans and rents 

This point is easiest to explain through a simplified example that illustrates the principle. I suggest not take this example word for word because it is designed to show the principle instead of exposing the set of nations required for such an arrangement. What I am sure of however is that there is a set of nations from which the following is possible, and for a multinational corporation this nothing more than a matter of organization.

So lets say that there is a company in Finland which year after year makes a steady profit. This makes the company a safe and a somewhat lucrative investment because it would give a steady return as it has done year after year thus far. The company is announced to be on sale for $500 million and a company in China decides to buy it in the hopes that it could utilize the annual profits to boost its own operations. But wait! Finland and China do not have the appropriate tax treaties to avoid double taxation effectively and even if they would the annual profits are subject to corporate tax which is relatively high in Finland compared to "what's out there". What to do?

Simple, instead of buying the company directly the Chinese company registers a subsidiary company to a tax haven that has a very low corporate tax and has favorable tax treaties with Finland (if no such tax haven exists we can add one more country to the chain, say for example the Netherlands which has tax treaties with many tax havens as well as Finland). Then a holding company is created in Finland which is given a loan of $500 million by the company that was registered to the tax haven. The annual interest rate of the loan is set on a level that is roughly the same as the annual profits made by the Finnish company. The holding company then uses the $500 million to purchase the Finnish company and together they form a corporation that is now $500 million in debt to a company that is registered to a tax haven. From now on the profits made by the Finnish company are used to pay the interest of the loan. Paying interests is a tax deductible expense and therefore the accounting of the Finnish company will now show no profits subject to corporate tax because they are all used to pay back the interest of the loan. These interests will be shown as profits in the tax haven where they are subject to very low corporate tax.

The same effect can be achieved by renting all the equipment that are used when operating in another country and the principle is used by numerous multinational corporations. For example Reuters wrote about Starbucks in 2012 that "Starbucks' UK accounts show a third way it cuts its tax: inter-company loans. These are a common tactic for shifting profits to low-tax jurisdictions, according to a guidance manual used by the UK tax authorities, who try to limit the technique. Such loans bring a double tax benefit to multinationals: the borrower can set any interest paid against taxable income, and the creditor can be based in a place that doesn't tax interest."

3.3) Charity organizations

Some forms of organization such as non-profit foundations enjoy tax benefits. In certain situations these tax benefits become much greater than the few million dollars that is required in donations each year. The pioneer and the most outrageous user of this arrangement is IKEA and I will explain how this works in the examples below. .



Examples

It is time to put everything I've explained above into practice by having a look at some of the biggest corporations on Earth. As I mentioned in the introduction before I did this research I was honestly under the impression that the vast wealth of these corporations came from providing a service to the global community with more skill and efficiency than anyone else - that the system would reward anyone who did a great job - but sadly this is not true. The success of these companies is a story of aggressive exploitation of legal technicalities.


I'm Chiquita banana and I'm here to say, I'll be making all these profits and I will not pay (taxes)



The Guardian newspaper published an article in 2007 that exposed how Chiquita and other large fruit companies brings bananas to the UK via the Channel islands. The article exposed a complicated network of corporations in various tax havens that lowered the amount of tax payed by the three big banana companies (Chiquita, Fresh Del Monte and dole) to as low as 8%.

Bananas are very profitable because they sold in such large quantities (bananas are the largest volume item sold in the supermarkets in UK). With a sophisticated network of subsidiary companies registered in tax havens companies such as Chiquita can transfer profits as various expenses to areas with low taxation in the form of royalties for the use of brands, distribution networks, insurance, finance and marketing charges.

Matti Ylönen published the following diagram in his book Veroparatiisit - 20 ratkaisua varjotalouteen to show where exactly the price of a single banana sold in the UK goes:


Total Price: 60 pennies (penny = 1/100 of a British pound)
  • 13 pennies to the country the banana is produced, of which
    • 1,5 pennies to work, 
    • 10,5 pennies to expenses and
    • 1 penny of profit
  • 8 pennies to Luxembourg for financing services
  • 8 pennies to a Cayman Island for the usage of the sales network
  • 4 pennies to Ireland for the usage of the brand
  • 4 pennies to the Isle of Man for insurance services
  • 6 pennies to Jersey for management fees
  • 17 pennies to Bermuda for the usage of the distribution network 

The purpose of this arrangement is to create tax deductible expenses in countries with high taxation so that the money can appear as profits in countries with very low taxation. For example the corporate tax rate of Bermuda is 0% while in the UK it is 26%.1 penny of each banana sold in the UK was accounted as profit for the purposes of corporate taxation in the UK. 

NOTE: While much of these arrangements are created for the sole purpose of tax avoidance the expenses also pay for real organizational costs. Yet an enlightening comparison can be made between the lowest expense (the actual work) and the largest expense (the right to use the distribution network). 

According to the article in the Guardian Fresh Del Monte engaged in similar activities in the US but with more aggression. "The company had 48% of its sales in the US in 2005 but lost $35.2m in that country. Overseas it made a profit of $133.5m. It paid no US tax but was instead given a tax credit of $8.3m that year".


IKEA and the abuse of charity organizations 



Most believe that IKEA is a Swedish company but in reality it is a Dutch foundation called Stichting INGKA Foundation. A foundation is a non-profit organization dedicated for the advancement of a certain cause which in the case of Stichting INGKA Foundation is "To promote and support innovation in the field of architectural and interior design".

The Economist conducted a thorough study on the organizational structure of IKEA and it published an article in 2006 on how the famous furniture company exploits legislation aimed at creating charities. The article summarizes that with these arrangements IKEA "minimises tax and disclosure, handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover".

The article estimates that the foundation is worth $36 billion which would make it the world's wealthiest foundation belittling the Bill & Melinda Gates Foundation. From this vast fortune it donates $1,7 million each year to the advancement of interior design. This annual donation allows IKEA to remain a foundation and to enjoy tax exemption and not having to be too open about its financial activities - mere pocket money compared to the benefits.

The story of the IKEA organization doesn't stop here. It's intellectual property such as its logo is owned by a Dutch company Inter IKEA Systems. Because of this all IKEA stores around the world must pay 3% of their profits to Inter IKEA Systems. According to the article Inter IKEA Systems collected $819 million in franchise fees and made pre-tax profits of $292 million in 2004. This profit is after deducting $766 million of “other operating charges”. IKEA refuses to disclose what this "other operating charges" in fact is (which it can do on the account of being a non-profit organization) and on top of this dubious fee Inter IKEA Systems seems to make large payments to a Luxembourg-registered group I.I. Holding (which according to the article is almost certainly under the control of the Kamprad family). This company made a profit of $425 million in 2004.

According to the article these two companies (Inter IKEA Systems and I.I Holding) had $15,5 billion in cash and securities, they made $717 million in profits and got a tax bill of a mere $25 million in 2004, and these numbers do not even take into account the "other management fees" (whatever it may be). On top this the Stichting INGKA Foundation made $2,6 billion in profits and got taxed for $720 million during the same year according to the book Veroparatiisit - 20 ratkaisua varjotalouteen. These figures combine into a vast fortune that is taxed for a minimal amount and it is all thanks to donation of a mere $1,7 million per year.


Other examples of aggressive tax avoidance 

  1. Microsoft - an article by The Wall Street Journal 
  2. Oracle, Xerox, Dell, CSC Computer Sciences and Symantec - an article by the Daily Mail 
  3. Apple - an article by the TIME magazine

Conclusion

With corporations making millions in profits with mere legal technicalities - money that is taken directly from public tax pools funding hospitals and schools - it is obvious that normal rules of corporate competition no longer apply. These corporations troll the global monetary seas and take everything they can out of public circulation which forces nations to go further into debt. Nations constantly find themselves from a situation where the only ones with any real assets is a handful of wealthy individuals, trusts, hedge funds, banks and corporations, and instead of rethinking the fundamentals of the entire system even legislation is put up for sale to make the ends meet. There is no doubt about it: the system is in a deep crisis.

On a very fundamental level the system that governs mankind should be about creating a dignified life for humanity - what I've seen during the research I put into this article was that nothing of the sort is being done. To me it seems that all action is driven by a single motive: self-interested greed.

In this post I tried to scratch the surface of the inequality that stands within business today with history, numbers, legislation and examples. In my next article I will get down to how even this is not enough by opening up how huge concentration of funds can be used to manipulate the markets themselves, how nations are forced to sell out their legislation and how this rapidly increasing economic inequality is threatening the developed world and the developing world alike.

Stay tuned.  

Sunday, March 10, 2013

Day 8: The Justice of Money

Problem

The law is often portrayed in the symbolism of a woman that is holding a scale in one hand, a sword in the other, and her eyes is covered with a cloth – this symbol is commonly referred to as Lady Justice. The meaning of this symbol – that by the way represents the legal system – is that justice is blind – which would then imply that the law does not place any sort of value unto the person that uses the law to make themselves heard – this person can be of any cultural heritage, rich or poor – this would not matter because apparently the law treats everyone the same.

This idea sounds cool – because I mean – if everyone could use the law in order to make themselves heard – and the law would treat everyone equally – this would mean that people that do not really have any financial muscle could stand up and challenge organizations, corporations, rich people, or governments – when these people find themselves in a weak spot wherein they are abused and not considered as an equally valuable part of society.

But is this how it works? Does the Law treat everyone Equally?

Obviously – the answer is NO – and as such the symbolism of lady Justice is a complete and utter lie – because the law is not about equality – it’s about financial muscle – and it’s about the game of money wherein money is king – and money will buy you the result that you desire.

Consider the following – you’re a poor farmer – and you’ve bought a shit-load of seeds from a big supplier (a big corporation with lot’s of money) – as you plant these you notice that – fuck! – these seeds doesn’t seem to grow at all!

Naturally you as a farmer that is dependent upon your seeds growing up to become vegetables – become quite upset as you see what is unfolding (or rather not unfolding) before your eyes and you accordingly decide to – “sue those fuckers!” – now here the question comes into play – would you as this farmer actually be able to win such a law-suit – and what would be required for you to win a law-suit?

Well – obviously – because you as the farmer are a farmer – and have accordingly spent the majority of your life farming – consequentially you know and care – “nothing about the got-damn laws, and lawyers!” – which in turn means that you must invest in a Lawyer that knows the law – that knows how the justice-system functions – in order for you to have any form of success in a legal process – and this obviously costs – a shit-load of money.

Already at this stage you as a farmer is at a rather precarious position in relation to the corporation – because as you take a big loan to be able to afford a lawyer – the corporation use it’s money that have been specifically put aside to covering the costs of eventual legal processes – in order to hire 15 lawyers – obviously lawyers that are the absolutely best and that are able to persuade even the most resistant and stern judge that a murder should be more seen and defined like a quite upsetting insult.

So – what can be clearly seen in this example is that – the justice-system is NOT equal – the justice-system does not in-fact promote JUSTICE – it promotes what money dictates that it should promote.

In the case of you as the farmer – as you now see this massive array of lawyers amass on your opponents side – suddenly – the chances of your success might feel more distant – and maybe you will at this point begin to think about the consequences of an eventual loss wherein in the court would judge in your disfavor – because this would mean that you would have pay for ALL THOSE superbly expensive lawyers that you’re opponent as the corporation have decided to hire.

So – here we can really question whether there really is any form of chance for you as this farmer to actually be able to win a lawsuit against a big corporation?

And also within this – we should ask ourselves the question – is this how we want our legal system to function? Do we want justice in this world to be measured and defined by the amount of money that you’re able to amass?

Obviously – this is not what we want to have – not any SANE human-being want justice and morality to be in the hands of money – as that is simply psychopathic – because justice and morality are and should be expressions of honoring life – as what is best for all – in actually looking at what is FAIR – what is CORRECT – and what is BEST – and then from there making a decision – which is NOT possible in our current and money-based legal-system – because money isn't FAIR – money is simply money and those that have it are not fair but simply want to have more of it at any cost.

Solution

What is then the solution? How are we able to give everyone a voice to be heard – so that the farmer is able to grow his crops – and he’s able to do his thing – and make money and take care of his family?

Obviously – we require to change how money is allocated in this world – and we have to make sure that no one person or organization has money to control basic necessities – and human rights – because food, water, and a home – that is HUMAN RIGHTS and should be given to everyone – unconditionally.

As such – the solution doesn’t lie in re-creating our justice-system – but the solution lie in re-creating our money system – in making sure that money is given to all equally – and that when disputes arise between human-beings in terms of how to share the resources that are here on earth – that this is sorted out through a democratic process – that is ruled not by considerations of money – but by considerations of what is BEST FOR ALL.

Reward

What would the reward be? Well – no more would anyone have to fear that their very life and existence would be uprooted and turned around – and within this that they wouldn’t have any form of chance or capability to change the turn of events – and instead each one would feel, and experience themselves safe – in knowing that – there is really JUSTICE – FAIRNESS and MORALITY in this world – and that I will not be able to become a victim to a money-driven legal system – and used as a dirty old rag – and thrown away after all my money has been sucked out of me – I would really and in-fact be protected – and I would know that regardless of what happens to me – I will be cared for and treated as an equal.