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Just as many companies no longer offer credible accounts of their transactions, so politicians no longer offer credible accounts of their actions.

by Jeremy Seabrook

Critics of capitalism maintain that its accounting system is an ideological construct which omits inconvenient costs that might damage the sanctity of the balance-sheet. Some of these elided costs may be read in the exhausted resource-base of the earth, and in eight generations of wasted human lives. The bottom line, for which both nature and humanity have paid, appears today to be less and unappealable reality than an elaborate fiction.

It is significant that there has recently been pressure to internalise costs previously borne outside the accounting-system which, if incorporated, would lead to 'price that tell the truth'. Unhappily, it seems even that limited accounting-system is no longer reliable.

Key players

Accountants have been key players in the maintenance of this epic pretence. Their sober calling has been haloed with a kind of monastic dedication to the minutiae of figures. Their prosaic function has been a guarantor of stability and rectitude. Suddenly, the improbable designation 'creative' is applied to what they have been doing. When Arthur Anderson was fined $7 million for overstating Waste Management's earnings by $1.4 billion in 2001, this was the first successful case against an auditor for 20 years.

Once thrust in the solemn verifies of the capitalist calculus was lost, revelations came thick and fast. The cable TV operator Adelphia revealed billions of dollars of 'off-book debt'; WorldCom disguised $3.9 billion of expenses as capital expenditure; Qwest, fourth largest telephone company in the US, disclosed a debt amounting to $26 billion; Global Crossing built up massive debt borrowing billions to create a fibre-optic infrastructure; Enron executives cashed in millions of dollars' worth of shares shortly before the price collapsed; short-term loans were mislabelled by Merill Lynch as equity investment, companies routinely 'restate' their profits when fraud is detected; a handful of executives and directors at Metromedia Fiber Network personally pocketed $290 million, most of it from the well-timed sale of shares shortly before the company collapsed; Merill Lynch's former energy analyst was forced out because his 'tepid' views on Enron were costing the company business.

We are faced by perplexity as to what accounts actually account for

Virus - How old?

If this confusion were restricted to the economy, that would be bad enough. But it seems that, just as Alan Greenspan's infectious greed' distorted American capitalism in the 1980s (although some might argue the virus is somewhat older than that), a similar contagion seems to have invaded the body politic itself. It is not merely that there is a close relationship between business and politics - Bush's 'Kenny-Boy Lay' amassed $247 million from Enron between 1999 and 2002, while half of the largest contributors to George W Bush's Presidential campaign had major links to Enron - but that the arbitrary and self-serving values of the one invades the other.

Just as numerous companies no longer offer credible accounts of their transactions, so politicians no longer offer credible accounts of their actions. Who is to be held to account for the war that has been announced on Iraq? No parliament, no Congress, no people, no electorate has been consulted in support of a war which appears to the world less an attack on tyrannical regime that the pursuit of a dynastic vendetta as Bush the Son seeks to carry out the thwarted will of Bush the Father.

There is, it appears, a deficit in all the current accounts of the world. What is the relationship between the lack of answerability of governments and the increasingly tarnished reputation of business accounting? Just as the distinction between costs and benefits, between profit and loss have become less clear, so the stakeholders and punters in the great casino of democracy are also at the mercy, not of carefully crafted programmes and policies, but of chance, or the caprice of power. Democracy and free markets (those inseparable identical twins) take on the aspect of a lottery, where you take a leap in the dark with your vote as well as your investment

False profits

Enron establishes shadow companies and conjures up false profits; a Senate Committee listens only to those who will confirm its view that Saddam must be 'taken out' (is it an accident that the language of gangsters has influenced the rhetoric of those called to high office?); directors cash in their shares before they crash, while preventing mere employees from doing so; regime changes are required - whether in Iraq or Venezuela, or even Iran and North Korea - by the upholders of democracy who have themselves only the shakiest of mandates; a Financial Times report reveals that top executives and directors of the 25 biggest US business collapses grossed $3.3. billion in the three years 1999-2002; a universal and endless war on terror any opposition or adversary to become victim of a pre-emptive strike, or as the British Defence Secretary stressed, 'ensuring that we get to the threat before it manifests itself in the UK or the territory of our allies'.

The appearance of Adelphia and WorldCom executives in handcuffs is mere theatre, an immorality-play that treats them as though they were desperados likely to provoke a shoot-out in court. The myth of the few bad apples permits the rest of the orchard to be sprinkled with lethal pesticides.

Perhaps all this would matter less if the high-minded representatives of economic and democratic orthodoxy were not constantly on the Third World preaching circuit, extolling the virtues of good governance, transparency and curiously, accountability. Nepotism, corruption and fraud - the stigmata of underdevelopment - appear in the very homelands of the global system to which a world must now look for salvation.

At the same time, these luminaries, faced by individuals settling their own account with vast concentrations of power by means of crime, robbery, violence, addictions permitted and prohibited, exhort people to a sense of responsibility, civic duty and probity, counselling patience to the unequal and perseverance to the poor; in the hope, no doubt, of deferring the day of reckoning a little longer.

Of course, in the last analysis, the representatives of politics and economics are accountable - but principally to each other. Cheney is a product of Halliburton, Bush owes everything to the energy industry. They will do nothing - not even sign the Kyoto Protocol - that interferes with the interests of American business.

Nor would it be wise to interfere with these arrangements, according to Andrew Crockett of the Bank of International Settlements, for fear of 'the law of unintended consequences'. He warns of the dangers of 'knee-jerk' regulation in response to turmoil in financial markets. In the disorder around us, there is no accounting for anything - neither the vagaries of economics nor the whims of rulers.

Who is going to invest their money or trust in the economic and political accounts of the lawless lords of globalisation? While voters feel betrayed and deceived investors lose confidence, shareholders see the value of their equity melt away, the elderly lose hope of a retirement pension, employees find themselves without livelihood but with a mountain of unpayable debt. When accounting-systems crumble and accountability evaporates, why should we, the no-account people, any longer accept the falsified accounts of reality handed down to us by power and privilege?

- Third World Network Features.

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