{"id":85359,"date":"2025-08-27T07:06:48","date_gmt":"2025-08-27T06:06:48","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=85359"},"modified":"2025-08-27T07:13:05","modified_gmt":"2025-08-27T06:13:05","slug":"capital-capitalism-and-the-capture-of-democracy-a-conversation-with-john-christensen","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/08\/27\/capital-capitalism-and-the-capture-of-democracy-a-conversation-with-john-christensen\/","title":{"rendered":"Capital, Capitalism, and the Capture of Democracy: A Conversation with John Christensen"},"content":{"rendered":"<p class=\"p1\">Capital might be a hopeful human achievement, but capitalism has captured democracy for the few: a conversation with John Christensen.<\/p>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/lmtfQBR-hxc?si=dZyPZ-TwDXDCcgYb\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><span style=\"box-sizing: border-box; margin: 0px; padding: 0px;\">The audio version, for reasons known only to it, is not embedding properly in this post, <a href=\"https:\/\/richardmurphy7.podbean.com\/e\/capital-capitalism-and-the-capture-of-democracy\/\" target=\"_blank\" rel=\"noopener\">but you can get it here.<\/a><\/span><\/p>\n<p><strong>This is\u00a0TL;DR<\/strong> (Too long; didn't read). As with the summary that follows, this was produced with the assistance of AI, which did a good job of it.<\/p>\n<hr \/>\n<ul>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Capital is not the same as land.<\/b><\/span> Capital is man-made and finite; land and resources are natural and limited. Neoclassical economics blurred the two, with disastrous consequences.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Power and morality were stripped out of economics<\/b><\/span> when it became mathematical, allowing elites to claim markets were \u201cefficient\u201d while monopolising resources.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>The post-war settlement showed another way.<\/b><\/span> Welfare, infrastructure and equality flourished when democracy constrained capital.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Neoliberalism reversed this.<\/b><\/span> From Friedman to Thatcher and Reagan, the rules were rewritten to prioritise profit and deregulation.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Tax havens epitomise capitalism\u2019s hypocrisy,<\/b><\/span> undermining markets and fuelling a race to the bottom.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Today\u2019s capitalists don\u2019t build; they enclose.<\/b><\/span> Monopoly, branding, patents, and financialisation matter more to them than production.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>The solution lies in governance.<\/b><\/span> Accountability, antitrust, transparency, and alternative models of ownership can restore capital to public purpose.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Markets are social constructs.<\/b><\/span> They only work with rules and referees \u2014 democracy must reclaim that role.<\/p>\n<\/li>\n<\/ul>\n<p><strong>This is the summary of our discussion<\/strong>:<\/p>\n<hr \/>\n<p style=\"text-align: center;\"><em>\u201cCapital is the accumulation of past effort for future benefit. <\/em><\/p>\n<p style=\"text-align: center;\"><em>Capitalism is the appropriation of that effort by the few.\u201d<\/em><\/p>\n<p class=\"p4\">This week I had the pleasure of recording a new kind of conversation for the channel \u2013 a dialogue with my old friend John Christensen, co-founder of the Tax Justice Network. For over two decades, we\u2019ve worked together to expose the realities of tax havens, secrecy jurisdictions, and the abuse of power that flows from concentrated wealth.<\/p>\n<p class=\"p4\">Our theme this time was capitalism itself: what it claims, what it really does, and how we might take it back under democratic control. What follows is a summary of the flow of that conversation.<\/p>\n<p class=\"p4\">To hear what we actually said, I am afraid you will have to watch the video: 40 minutes is too long to produce as a transcript<\/p>\n<hr \/>\n<h3><b>1. What is capital, and how is it different from land?<\/b><\/h3>\n<p class=\"p4\">John began by insisting on a distinction economists long ago blurred: the difference between <span class=\"s2\"><b>capital<\/b><\/span> \u2013 the stock of human-made tools, machines, infrastructure and knowledge \u2013 and <span class=\"s2\"><b>land<\/b><\/span>, the finite natural resources upon which we all depend.<\/p>\n<ul>\n<li>\n<p class=\"p1\">Nineteenth-century economics conflated the two, treating land as just another form of capital.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Neoclassical economics went further, assuming land to be a free gift of nature, unworthy of inclusion in its mathematical models.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">The result has been the disastrous assumption that natural resources are limitless, enabling capitalism to plunder the earth as if no boundaries exist.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">Capital, John argued, is man-made and temporal \u2013 it exists only because past human effort has been stored to create potential future benefit. But capitalism has captured that human endeavour for the benefit of a few.<\/p>\n<hr \/>\n<h3><b>2. What vanished when economics became \u201cmathematical\u201d?<\/b><\/h3>\n<p class=\"p4\">I added that the shift from classical political economy to neoclassical economics involved more than just bad modelling of land. It also meant:<\/p>\n<ul>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>The disappearance of power<\/b><\/span> from analysis. Classical economists, from Smith to Marx, all understood that power shapes markets.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Neoclassicals assumed \u201cperfect competition\u201d and \u201cequal access to capital,\u201d an absurd fantasy.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">In reality, good ideas often go unfunded while bad ideas backed by power and privilege secure resources.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">The removal of power, morality, and fairness from economics created a world in which the allocation of capital could be justified as \u201cefficient\u201d even when demonstrably destructive.<\/p>\n<hr \/>\n<h3><b>3. Friedman, Chicago, and the assault on the post-war settlement<\/b><\/h3>\n<p class=\"p4\">John located a decisive turn in the 1950s\u201360s with Milton Friedman and the Chicago School.<\/p>\n<ul>\n<li>\n<p class=\"p1\">Friedman insisted the state was an inefficient allocator of capital, ignoring that states had always borne the risks of infrastructure and research.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">His worldview dismantled the post-war settlement \u2013 what in France was called <i>les trente glorieuses<\/i> \u2013 which had delivered huge reductions in inequality, massive investment in education, health and housing, and the creation of welfare states.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Crucially, Friedman conflated <span class=\"s1\"><b>markets<\/b><\/span> with <span class=\"s1\"><b>capitalism<\/b><\/span>, assuming they were the same.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">But markets long pre-dated capitalism and will long outlive it. Indeed, capitalists often act <span class=\"s2\"><b>against<\/b><\/span> markets \u2013 seeking monopoly, secrecy, and risk-free rent extraction.<\/p>\n<hr \/>\n<h3><b>4. Tax havens: the aircraft carriers of the assault on democracy<\/b><\/h3>\n<p class=\"p4\">Drawing on our shared work, we noted how tax havens epitomise this contradiction.<\/p>\n<ul>\n<li>\n<p class=\"p1\">Capitalists demand \u201cfree markets\u201d but then create secrecy jurisdictions that destroy transparency, information, and fair competition.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Offshore secrecy enabled monopoly power, profit-shifting, and a \u201crace to the bottom\u201d on taxation, regulation, and labour rights.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Far from being efficient, these structures were deliberately designed to undermine democracy.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">I have long called tax havens the <span class=\"s2\"><b>aircraft carriers of the assault on democracy<\/b><\/span>, projecting corporate power into every jurisdiction on earth.<\/p>\n<hr \/>\n<h3><b>5. From welfare state to neoliberalism \u2013 the return of Beveridge\u2019s giants<\/b><\/h3>\n<p class=\"p4\">John contrasted two eras of capitalism:<\/p>\n<ul>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>The social democratic settlement (c.1945\u20131975):<\/b><\/span> democratic states constrained capital, invested in welfare, and brought down Beveridge\u2019s \u201cfive giants\u201d \u2013 want, disease, ignorance, squalor, and idleness.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>The neoliberal turn (Thatcher, Reagan):<\/b><\/span> deregulation, privatisation and tax cuts restored power to capital. The five giants are now back, visible in inequality, insecurity and the hollowing out of social protection.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">The 2008 crisis exposed the bankruptcy of Friedman\u2019s efficient market hypothesis, yet instead of reform, elites doubled down, turning to populism and authoritarianism to preserve their privileges.<\/p>\n<hr \/>\n<h3><b>6. Capitalism without production<\/b><\/h3>\n<p class=\"p4\">Another of John\u2019s striking insights was how few \u201ccapitalists\u201d he met in Jersey or the City of London were interested in genuine productive investment.<\/p>\n<ul>\n<li>\n<p class=\"p1\">Rather than building new factories or creating new goods, they sought monopolies, real estate, mergers, patents, brands, and rent extraction.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Adam Smith\u2019s \u201cpin factory\u201d would not interest them; they would prefer to brand the pin, patent it, and license its production at monopoly prices.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">This \u201cfinancialised\u201d capitalism no longer rewards enterprise or innovation. It degrades capital itself into an exercise in speculation and enclosure.<\/p>\n<hr \/>\n<h3><b>7. Governance, accountability and the fight for purpose<\/b><\/h3>\n<p class=\"p4\">Both of us returned repeatedly to the question of governance. Since the 1970s, company law has been rewritten to enshrine profit as the overriding purpose of the corporation, with social and environmental concerns treated as secondary.<\/p>\n<p class=\"p4\">We argued instead that:<\/p>\n<ul>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Capital is a hopeful construct<\/b><\/span> \u2013 the accumulation of past effort for future benefit \u2013 but it must be governed in the public interest.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Capitalism<\/b><\/span>, by contrast, is the capture of that hope by elites.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Transparency tools such as <span class=\"s1\"><b>country-by-country reporting<\/b><\/span> (born from our early discussions) are essential to reconnect markets with communities.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">Without accountability and governance, capital is abandoned to monopoly power.<\/p>\n<hr \/>\n<h3><b>8. Solutions: antitrust, democracy, alternatives<\/b><\/h3>\n<p class=\"p4\">So what can be done? John outlined his policy priorities:<\/p>\n<ol start=\"1\">\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Antitrust and anti-monopoly action<\/b><\/span>, echoing Teddy Roosevelt a century ago.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Reinvigorating democracy<\/b><\/span>, breaking the grip of capital over media, politicians, and parties.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Alternative models of ownership<\/b><\/span> \u2013 cooperatives, mutuals, and selective renationalisation where natural monopolies exist.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><b>Challenging concentrated power in finance and technology <\/b>is<span class=\"s1\">\u00a0the focus of his Balanced Economy Project.<\/span><\/p>\n<\/li>\n<\/ol>\n<p class=\"p4\">I added that accountability through better accounting remains my focus \u2013 ensuring that companies cannot sever the link between themselves, markets, and the communities they serve.<\/p>\n<hr \/>\n<h3><b>9. Markets are man-made<\/b><\/h3>\n<p class=\"p4\">Our closing reflections returned to the simple but vital truth: <span class=\"s2\"><b>markets are social constructs<\/b><\/span>. From biblical times when temples regulated weights and measures, through medieval fairs, to the small market in my own town of Ely today, markets have always required rules, referees and a commitment to fairness.<\/p>\n<p class=\"p4\">Capitalism seeks to remove the referee, to deny the role of democracy, and to rewrite the rules in favour of monopolists. That is why it is failing us \u2013 stagnating wages, degrading the planet, and eroding democracy itself.<\/p>\n<hr \/>\n<h3><b>Conclusion<\/b><\/h3>\n<p class=\"p4\">The conversation reaffirmed for both of us that the problem is not capital itself. Capital, rightly governed, is a profoundly hopeful human achievement. The problem is capitalism \u2013 the system that concentrates power, captures democracy, and seeks to insulate itself from accountability.<\/p>\n<p class=\"p4\">Rebuilding markets in the public interest requires:<\/p>\n<ul>\n<li>\n<p class=\"p1\">Restoring democratic control.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Breaking monopoly power.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Enforcing transparency and fair accounting.<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Reclaiming capital for social purpose.<\/p>\n<\/li>\n<\/ul>\n<p class=\"p4\">That is the unfinished business of tax justice, and it is the next great challenge for all who believe in democracy.<\/p>\n<hr \/>\n<h3><b>Action points<\/b><\/h3>\n<ol start=\"1\">\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Reclaim the language of capital.<\/b><\/span> Distinguish between capital (a hopeful stock of human effort) and capitalism (the capture of that stock by elites).<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Challenge monopoly power.<\/b><\/span> Support antitrust and anti-monopoly measures that prevent markets being rigged.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Strengthen democracy.<\/b><\/span> Push for transparency in lobbying, media ownership, and political funding to break the grip of capital.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Support alternative ownership.<\/b><\/span> Cooperatives, mutuals and selective renationalisation can align capital with social purpose.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Back transparency reforms.<\/b><\/span> Campaign for country-by-country reporting and other accounting tools that reconnect corporations to the communities they serve.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Expose tax havens.<\/b><\/span> Treat secrecy jurisdictions as assaults on democracy and demand international action against them.<\/p>\n<\/li>\n<li>\n<p class=\"p1\"><span class=\"s1\"><b>Defend markets, not capitalism.<\/b><\/span> Insist on rules, referees and fairness so markets serve people rather than monopolists.<\/p>\n<\/li>\n<\/ol>\n<hr \/>\n<p><strong>FAQs <\/strong>- these items referred to in our discussion can be found in the glossary <a href=\"https:\/\/www.taxresearch.org.uk\/Blog\/glossary\" target=\"_blank\" rel=\"noopener\">appended to this blog<\/a>.<\/p>\n<h3><b>Accounting, reporting &amp; corporate structure<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\">Country-by-country reporting<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Consolidated accounts<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Group accounts<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Corporation tax<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Controlled foreign company (CFC)<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Arm\u2019s length method (transfer pricing)<\/p>\n<\/li>\n<\/ul>\n<h3><b>Market power, pricing &amp; competition<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\">Oligopoly<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Greedflation<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Race to the bottom<\/p>\n<\/li>\n<li>\n<p class=\"p1\">OECD transfer pricing guidelines<\/p>\n<\/li>\n<\/ul>\n<h3><b>Secrecy jurisdictions &amp; tax havens<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\">Secrecy jurisdiction<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Tax haven<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Secrecy space<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Nowhere (in the secrecy space sense)<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Unregulated market<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Knowingly unregulated<\/p>\n<\/li>\n<\/ul>\n<h3><b>Money, the state &amp; macro frames<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\">Central bank reserve accounts<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Taxpayers\u2019 money<\/p>\n<\/li>\n<li>\n<p class=\"p1\">National debt<\/p>\n<\/li>\n<li>\n<p class=\"p1\">GDP (Gross Domestic Product)<\/p>\n<\/li>\n<li>\n<p class=\"p1\">Open market operations (context for QE\/QT)<\/p>\n<\/li>\n<\/ul>\n<h3><b>Economic ideas &amp; ideology<\/b><\/h3>\n<ul>\n<li>\n<p class=\"p1\"><a href=\"https:\/\/www.taxresearch.org.uk\/Blog\/glossary\/N\/#neoliberalism\" target=\"_blank\" rel=\"noopener\">Neoliberalism<\/a><\/p>\n<\/li>\n<\/ul>\n<hr \/>\n<p><b>Taking further action<\/b><\/p>\n<p>If you want to write a letter to your MP on the issues raised in this blog post, there is a ChatGPT prompt to assist you in doing so, with full instructions,\u00a0<a href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/06\/20\/chatgpt-prompt-for-a-letter-to-your-mp\/\">here.<\/a><\/p>\n<p>One word of warning, though: please ensure you have the correct MP. ChatGPT can get it wrong.<\/p>\n<hr \/>\n<p><b>Comments\u00a0<\/b><\/p>\n<p>When commenting, please take note of this blog\u2019s comment policy,\u00a0<a href=\"https:\/\/www.taxresearch.org.uk\/Blog\/about\/comments\/\">which is available here<\/a>. Contravening this policy will result in comments being deleted before or after initial publication at the editor\u2019s sole discretion and without explanation being required or offered.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Capital might be a hopeful human achievement, but capitalism has captured democracy for the few: a conversation with John Christensen. The audio version, for reasons<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2025\/08\/27\/capital-capitalism-and-the-capture-of-democracy-a-conversation-with-john-christensen\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[204,35,16,206,224,106,97],"tags":[],"class_list":["post-85359","post","type-post","status-publish","format-standard","hentry","category-economic-justice","category-economics","category-ethics","category-glossary","category-neoliberalism","category-politics","category-tax-justice"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/85359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=85359"}],"version-history":[{"count":11,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/85359\/revisions"}],"predecessor-version":[{"id":85381,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/85359\/revisions\/85381"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=85359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=85359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=85359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}