Cornucopia

by John Francis Kinsella

  *

  In July 2013, the Russian lawyer, Sergei Magnitsky, was convicted by a Moscow of tax evasion. His real crime, if there was one, was uncovering a two hundred million dollar tax fraud, involving members of the Russian government, whilst working for William Browder, an American investor.

  The only problem was Magnitsky was not in the court to hear the verdict. He was dead, murdered four years earlier in Moscow’s Butyrka prison, the result of severe beatings and the lack of medical care.

  The post mortem conviction was not just an example of the capricious nature of the Russian legal system; it was an insight into how Rosfinmonitoring, the Federal Financial Monitoring Service of the Russian Federation, was used by the Kremlin to control dissenters.

  The much publicised deoffshorisation campaign launched by Vladimir Putin was not only aimed at repatriating assets, but also fighting corruption and capital flight. The campaign was launched after it was revealed that Russia was losing billions overseas every year. It seemed that anybody of importance in the higher ranks of the country’s administration, from the heads of security agencies to the Chair of the Russian Duma’s ethics committee, owned significant overseas assets. This included accounts in offshore tax havens in Europe and the Caribbean.

  The campaign was designed to coerce the Russian elite to hold their money inside the country. As one member of the Duma put it: This law is about political, and not legal, control. It will be applied selectively and subjectively.

  Corruption was part of Putin’s reward system to guaranty the loyalty of his entourage and as a weapon against enemies. With it he could control the powerful oligarchy and thus reinforce his political base. Men like Tarasov were held on a tight leash by the ever present threat of reprisal, prison and the seizure of their assets if they failed to toe the Kremlin’s line.

  From time to time examples were made, Mikhail Khodorkovsky was one, the head of the now defunct energy giant Yukos, was jailed on accusations of money laundering and fraud, though his real crime was to have politically challenged Putin.

  The message was plain: follow the rules or face the wrath of Russian justice. These rules were enforced by the selective application of the laws relating to finance by Rosfinmonitoring. Dissenters were pursued by the courts, whilst those who pledged loyalty to the system, by forgoing all personal political ambitions, were allowed pursue their financial goals.

  George Town – Cayman Islands

  Wealthy Russians, fearing the hand of the Kremlin, had stashed their money away in safe havens such as Cyprus, Luxembourg and Israel, but whenever possible their preferred choice was the City of London with its conduits to British Overseas Territories in the Caribbean, where their assets were theoretically beyond Putin’s reach.

  Curiously the legislation against money laundering in Russia was enacted at the instigation of the West in its fight against international crime. Thus the Kremlin could be seen to legitimately pursue the guilty, but more especially opposition figures and disloyal oligarchs on charges of tax evasion, embezzlement and other financial crimes. Nearly all were convicted, giving an appearance of credibility to Putin’s crackdown.

  Sergei Magnitsky was proof that Putin’s reach went beyond the grave, giving the whistle blowing lawyer the doubtful fame of becoming the first person in Russian history to be tried and convicted posthumously.

  Putin’s trusted friends, that is until proven otherwise, were the hundred or so oligarchs who controlled a very large part of the country’s wealth, giving credibility to the slogan: For my friends, anything. For my enemies, the law!

  PANAMA CITY

  Whilst Liam Clancy was discovering the charm of Bocas del Toro, Tom Barton listened to Don Pedro a few hundred miles to the south at the family hacienda in Barichara. The Colombian proned his government’s investment policy, casting aside the shadow of the country’s violent and drug-fuelled past.

  “Tell your friends confidence is growing in Colombia, Tom, even though there’s still a lot of progress to be made. A great transformation has taken place over the past decade.”

  Barton nodded, it was not just hype, he had seen for himself how Colombian was moving forward, even if the image of a narco trafficker’s paradise still lingered.

  “Here personal relationships are what everything is about. We spend a lot of time building and maintaining these.”

  “It’s like that in Asia.”

  “Perhaps, but here we have corazon.”

  “Yes, I can understand that.”

  “That’s why things take time, a little difficult for North Americans to understand,” he said, then adding with a laugh, “and mortifying for our Asian friends.

  “Colombia is situated strategically between the North and South. We have turned a page, the days of Escobar are long past and the conflict with the Farc will soon be settled for good. Today we say: Colombia, el riesgo es que te quieras quedar.”

  Barton nodded with a smile that said everything.

  “Our president, Juan Manuel Santos, has the approach needed to get us out of the impasse that prevented us from moving forward. You know ten years have changed a lot in Colombia. Our middle class has grown to over thirty percent of our population, and at the same time poverty, though its still common, has dropped.

  “Nearly all our major cities are prosperous, just look around and you can see names like Cartier, Louis Vuitton, Armani, Zara and Disigual everywhere. Things are looking good for business with our growth rate, five percent and an acceptable rate of inflation. Today we offer a lot opportunities for investors. It’s a much better place for doing business than it was before, better than our neighbours, better even than some of your European countries, including Belgium and Italy,” he added with an apologetic smile.

  Barton agreed, what he had seen confirmed the old man’s words.

  “Last year your future king visited us.”

  Barton was nonplussed, he wondered who his future king was.

  “Charles.”

  “Oh, I see.”

  The both laughed as Barton wondered why foreigners often seemed to imagine Brits as being on talking terms with royalty.

  “Our problem is infrastructure and transportation, Don Pedro continued, “that’s why I have to fly everywhere. As los norteamericanos say, time is money.”

  “That’s true,” Barton concurred.

  “But moving goods is a more serious business, getting them to and from the coast, Barranquilla or Cartagena, is hugely expensive.

  “Buenaventura is our most important port, it’s our gateway to Asia and will play a role in the Pacific Alliance, that’s the free-trade pact with Mexico, Chile and Peru. Unfortunately Buenaventura is an exception when it comes to prosperity, it’s got justifiably a bad reputation, drug wars and all kinds of unpleasant business.

  “Unfortunately Buenaventura remains a city where crime and violence are the products of poverty. It’s where Colombia’s evils live side by side, where the chainsaw has become a symbol of the city.”

  “Chainsaw?”

  “To chop up the gangs’ victims,” said Don Pedro wrinkling his nose at the thought of it. “Their business is cocaine, illegal gold mining, smuggling and lots of other bad things. Our government has still another battle on its hands there.”

  Narcotics were omnipresent in Latin America - its dark face, only the week before, Barton had read, the head of the Knights Templar drug cartel had been captured by the Mexican police as part of a crackdown on gangs. Gangs and cartels controlled cocaine from Ecuador and Colombia as it transited through Central America on its route to the US.

  In Buenaventura, warring gangs, known as los malos, spent a good part of their time fighting turf wars in its poorest neighbourhoods. The remains of those that fell foul of their laws were tortured to death and their remains scattered in the nearby jungle, or tossed into the river, after being dismembered in the miserable wooden huts known as casas de pique overlooking Esterio del Pinal, which led out to Buenaventura Bay and the Pacific.r />
  “Many of the gang members are, or were, part of the Farc. They had little choice but to turn to organised crime once the war started to wind down,” Don Pedro continued with a cynical laugh. “It was the only business where their skills could be could be put to profitable gain.”

  Barton looked worried and his future father-in-law hurried to reassure him. “Don’t worry, here at Barichara life is very quiet. There is little poverty and we have a good police force.”

  To the amusement of the Colombian, Barton forced a relieved and slightly falsetto laugh.

  “Here, let me fill your glass.”

  CORNUCOPIA

  John Francis, as a seasoned economist and historian, knew better than most the challenge of robotisation. Technology had threatened jobs since the end of eighteenth century and it was Adam Smith who described mass production in his opus magnum: An Inquiry into the Nature and Causes of the Wealth of Nations, published in 1776. Francis owned an early copy of the four volume work, bought in an Istanbul second hand bookshop many years back. It was kept it in a prominent place in the library of his Dublin home, a constant reminder of economic fundamentals and change.

  Labour and economics were subjects that attracted the attention many historical commentators. The oft cited quotation: History never repeats itself but it rhymes, erroneously attributed to Mark Twain, certainly contained some truths. However, Francis preferred the words from a novel Mark Twain co-wrote with his neighbour Charles Dudley Warner: History never repeats itself, but the Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.

  Although Adam Smith was the first to have described the economics in terms of manual mass production, Francis saw robotics as its ultimate tool, in fact it was at the heart of his vision of Cornucopia. This was confirmed by the evidence around him whereby almost every industry was affected by the introduction of robotics, from white collar jobs in banking and insurance to steel and automobile production lines.

  Advances in the computerisation of production tools progressed in leaps and bounds. Almost every labour oriented task was being optimised by intelligent machines in a tectonic shift that was transforming human society. Cornucopia was on the march and unless politicians and business leaders acted, its effects on those left by the wayside would be devastating.

  Some described the changes as cyclic, including Francis, who believed history taught mankind its lessons, even if they were constructed out of the broken fragments of the past. However, the difference with the past was the ever accelerating speed of change, which had reached a point where leaders and institutions were no longer capable of providing an adequate response.

  Quantum changes in technology had destroyed jobs: first hollowing out the working classes, then the middle classes, and in almost every sector of commerce and industry.

  Moreover, as jobs were increasingly automated, the effect on real wages was inversely proportional.

  Soon, Francis told his students, the economy in parts of the UK would resemble that of undeveloped countries. In fact it was already the case, with certain towns and districts of large cities already reminiscent of urban scenes in the Middle East or India, regions where small businesses dominated the economic scheme of things: food and small services, clothing and textiles, kitchen equipment, repairs and spare parts, buses, taxi services and the local transport of goods, pharmacies and medical services, local markets for agricultural products, and small farming tools.

  In brief primary manufacturing was absent. With the exception of services, bakers, butchers, restaurants and the like, practically all industrially manufactured goods were imported: the affair of local distributors supplying both consumers and small industries with their needs: building materials, electrical equipment, automobiles, motor cycles, buses, trucks, tractors and household goods.

  In pre-industrial times Francis explained to his students, employment was created in great European cities by small trades: butchers, bakers, tailors, carpenters, printers, masons, carriage makers, locksmiths, tanners, beltmakers and so on. Few of these remained and as China and India advanced nothing but the butchers and bakers would be left, and even that was not certain.

  An automated robotic future would see the return to a pre-industrial society, where the only jobs would be in small distributive commerce and professional services.

  Already manufacturing and major distribution networks were controlled by globalised corporations that robotised the production of automobiles, electrical goods and all the rest, delivered to the consumer by Amazon and Alibaba.

  The dawn of Cornucopia was at hand.

  The question was how to transform society? How to live in a world of plenitude? Ensure each one got his fair share? To prevent vast waves of uncontrolled immigration from war torn and dystopian societies invading advanced nations.

  Europe, already threatened by the loss of secure well-paid jobs, would be forced to defend itself faced with the collapse and dysfunctionality of its neighbours to the south and east. The threat came not only from dystopian nations such as Somalia, Eritrea, or war torn states such as Iraq and Syria, but also resource dependent nations such as Russia, Saudi Arabia and other Middle East countries as the price of their commodities collapsed and as new technologies made their commodities irrelevant, as it surely would.

  The idea that planet Earth was running out of resources had always baffled Francis, had not technology always found new ways to dig our material needs from the huge globe beneath our feet?