Capitalism and Social justice
Capitalism is, as already emphasized in earlier sections, the main engine for a fast progressing Globalization, and most people would also agree, that it is the most adequate system for today’s global economies, generating the highest benefit. However, it is questionable if it generates the highest benefit for everybody. Observing the current economic situation in the world it becomes obvious that capitalism is in conflict with social justice, a value anchored in our western constitutions.
The rise of so-called ‘tax havens’ is one side effect of the capitalization of markets. These are places, where rich individuals as well as multinational corporations can evade tax payments, thus maximizing net income and revenue. In 2005 the NGO ‘Tax Justice Network’ estimated the amount of tax revenue lost through tax havens to around 225 billion USD per year, with around 70 billions of lost tax revenue only for the US government.
These numbers show that tax havens are one significant part of the global economic system that exists today, but not necessarily a benign development that we should welcome. It corrupts to a certain extent the justification of taxation at all. In political theory taxes are the main means of income of governments, which is used for increasing welfare of society. The richer you are the more tax u pay due to the Ability to Pay Principle. Under this precondition we can sustain social stability. The problem, which arises “when the interests of the sovereign investors are treated as more important than the goals of full employment and universal welfare” (Hoberman), is that it jeopardizes the social stability within nation states and gathers outrage within society.
People of tax paying classes are rightly raising the questions of why they should pay taxes while many rich people and multinationals are evading this duty. This outrage touches the core of justice and will force government action.
And indeed in recent...