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If you’re unfamiliar with UK geography, then you might not know the difference between “greater London” – where the Queen resides -- and “The City of London” – where the London Stock Exchange is located. Both cities share a common location, and both are part of the United Kingdom, but the stark differences in the way their municipal governments function, and the affect those differences have on their respective residents, can serve as a harbinger of the fate of American democracy.


Greater London covers 607 square miles and incorporates one semi-autonomous city -- The City of London – plus 32 boroughs. The 2011 census tallied the population at 8 million-plus people.

The City of London stands atop one of England’s most historical locations, the original site of Londonium, a medieval settlement that once served as a commercial center for the Romans (circa AD50). Now known as the “Square Mile,” the walled fortress was abandoned in the fifth century, and after the Boudica uprising, the provincial administration of Britain moved to the small village because of its favorable trade location next to the Thames River. The new settlement evolved into greater London.

Unlike the rest of England, which operates under a constitutional monarchy, The City of London exists as a plutocracy. And unlike other English municipalities, the city functions as a corporation. It maintains a separate governing body designed to carry out the wishes of powerful corporations that form the heart of London’s financial district.

Its status as the first independent local authority came about through the city’s role as the centre[sic] of finance and trade in England, it was seen as so important to the national interest that it was given considerable autonomy by the monarch. (Source – City Mayors)
The Bank of England, the London Stock Exchange, and Lloyd’s of London are just a few of the companies that exist within the financial district. Businesses operating within the city limits enjoy special privileges and protections, including access to untouchable, offshore tax havens.

The City of London has been described as “England’s “Wall Street” district.


While structured differently, the English system functions pretty much the same as the U.S. democracy with one exception: English voters must elect a party – including the party’s leader – to lead their government, while Americans have the ability to elect a president that is unobligated to a major party (he or she can run as an Independent). On the other hand, the City of London — which contains the bulk of England’s major corporate and financial entities — functions as a plutocracy. In essence, it is a corporation governed by the City of London Corporation.

The City of London’s 7,500 inhabitants pay local taxes and are allowed to cast votes for a symbolic form of representation, but their representatives – like the Queen -- wield little power. The bulk of voters (32,000) who cast votes in the city’s annual elections are non-resident representatives of businesses, many being Londoners who are allowed to cast votes – some say unfairly -- in two different boroughs.

In reality, the corporation has usurped the ability of local citizens to run their own municipality by allowing non-residents to vote (in overwhelming numbers), thus making the corporation the only entity with power to make decisions. (Similar to what happened to our nation after the Supreme Court approved Citizen’s United.)

In addition, there is a Court of Aldermen. There are 25 Aldermen, one elected from each ward. Over time, the role and significance of the office of Alderman has diminished and today officeholders discharge minor judicial functions within the City as magistrates and are allowed to sit on the committees of the Court of Common Council.

There are no allowances payable to either Aldermen or members of the Court of Common Council. (City of Mayors)

Even the Queen has limited influence over the City due to the Corporation’s charter. From Wikipedia:
Tax journalist Nicholas Shaxson said, "Whenever the Queen makes a state entry to the City, she meets a red cord raised by City police at Temple Bar, and then engages in a colourful[sic] ceremony involving the lord mayor, his sword, assorted aldermen and sheriffs, and a character called the Remembrancer[sic]. In this ceremony, the lord mayor recognises[sic]  the Queen's authority, but the relationship is complex: as the corporation itself says: "The right of the City to run its own affairs was gradually won as concessions were gained from the Crown.""
Author and journalist Nicholas Shaxson argues that, in return for raising loans and finance for the British government, the City "has extracted privileges and freedoms from rules and laws to which the rest of Britain must submit" that have left the corporation "different from any other local authority". He argues that the assistance provided to the institutions based in its jurisdiction, many of which help their rich clients with offshore tax arrangements, mean that the corporation is "a tax haven in its own right". Writing in The Guardian, George Monbiot argued that the corporation's power "helps to explain why regulation of the banks is scarcely better than it was before the crash, why there are no effective curbs on executive pay and bonuses and why successive governments fail to act against the UK's dependent tax havens" and suggested that its privileges could not withstand proper "public scrutiny".
Lessons for the American Middle Class

When U.S. Attorney General Eric Holder admitted to Congress that some banks were too big to prosecute, he tacitly acknowledged that the corporate world operates outside the jurisdiction of U.S. laws, and subsequently this elitist group has been granted a de facto, autonomous status that is similar to the privileged standing bestowed upon The City of London Corporation:

Its (The City of London) status as the first independent local authority came about through the city’s role as the centre[sic] of finance and trade in England, it was seen as so important to the national interest that it was given considerable autonomy by the monarch. (Source – City Mayors)
The same type of recognition for Wall Street’s “special status” was supported in a speech by the DOJ’s head of Criminal Division, Lanny Breuer:
To be clear, the decision of whether to indict a corporation, defer prosecution, or decline altogether is not one that I, or anyone in the Criminal Division, take lightly.  We are frequently on the receiving end of presentations from defense counsel, CEOs, and economists who argue that the collateral consequences of an indictment would be devastating for their client.  In my conference room, over the years, I have heard sober predictions that a company or bank might fail if we indict, that innocent employees could lose their jobs, that entire industries may be affected, and even that global markets will feel the effects.  Sometimes – though, let me stress, not always – these presentations are compelling.
Another term for it is blackmail. For most Americans, the consequences of the illegal actions taken by those “clients” have meaning because they devastated much of the global economy causing millions of people to lose their jobs and homes. But as we have witnessed over the last five years, justice never prevails in a plutocracy.

Yesterday, Travis Getty of the New York Review of Books submitted this:

As the five-year statute of limitations nears for crimes that led to the Great Recession, a federal judge wants to know why no high-level executives have been prosecuted.

U.S. District Court Judge Jed Rakoff said he could not be sure whether intentional fraud was committed in any particular case, but he pointed out that government agencies had found significant evidence to suggest wrongdoing in their own investigations.

From the same article:
Rakoff expressed outrage that Justice Department officials, including Attorney General Eric Holder, had shown a reluctance to prosecute top-ranking financial executives out of concern for the economy.

“To a federal judge, who takes an oath to apply the law equally to rich and to poor, this excuse — sometimes labeled the ‘too big to jail’ excuse — is disturbing, frankly, in what it says about the department’s apparent disregard for equality under the law,” he writes.

Anyone who has witnessed the recent murders of innocent Americans committed by police officials can attest that the law does not equally apply “to rich and to poor”.

Think affluenza.

The truth is -- like the residents of the City of London -- the majority of Americans no longer have the ability to determine their own fate. Those types of decisions now belong to the top 1% of the people in our nation, and they have made it clear -- through control of our legal and justice systems -- that they no longer will allow anyone to hold them accountable for their crimes.

In a speech delivered in Bonn, Germany, Noam Chomsky made this remark about American democracy:

In the work that's essentially the gold standard in the field, it's concluded that for roughly 70% of the population - the lower 70% on the wealth/income scale - they have no influence on policy whatsoever. They're effectively disenfranchised. As you move up the wealth/income ladder, you get a little bit more influence on policy. When you get to the top, which is maybe a tenth of one percent, people essentially get what they want, i.e. they determine the policy. So the proper term for that is not democracy; it's plutocracy.
In essence, Chomsky is saying that 29.9% of American voters wield a small amount of influence over the decisions that our government makes, while the bulk of real power rests only with the top one-tenth of one-percent of our nation’s residents.

Does his claim hold up under scrutiny?

I think so. Consider the lack of response from members of our government to the wishes of the American people.

Fracking – “A recent Bloomberg National Poll found that 66 percent of Americans want more government oversight of fracking – a big increase over the last three months.”

The Public Option – “A clear majority of Americans – 72 percent – support a government-sponsored health care plan to compete with private insurers, a new CBS News/New York Times poll finds.”

Gun Control – “According to the survey, released today, a majority of Americans support a wide array of policies being discussed in Congress: 89 percent support closing the so-called gun show loophole by requiring background checks for all firearms sale; 69 percent support banning the sale of semi-automatic assault weapons; while 68 percent support banning the sale of large-capacity ammunition magazines. Meanwhile, more than 80 percent favor prohibiting “high-risk individuals” from having guns, including those convicted of a serious crime as a juvenile or those convicted of violating a domestic-violence restraining order.”

The Sequestration – “According to the most recent United Technologies/National Journal Congressional Connection Poll, a commanding majority of those surveyed, 61 percent, would undo all or some of the automatic sequester cuts, which remain the law of the land. Just 18 percent favored enacting all of the required cuts.”

Bush Tax Cuts – “A new CNN Poll released today shows that 69 percent of Americans want to let the Bush/Republican tax cuts for the rich expire.”

The War in Afghanistan – “The survey by CNN television and ORC International says just 17 percent of the American public support the Afghan war, while 82 percent oppose it.”

NSA Spying – “Since July, many of the polls not only confirm the American people think the NSA’s actions violates their privacy, but think the surveillance should be stopped. For instance, in an AP poll, nearly 60 percent of Americans said they oppose the NSA collecting data about their telephone and Internet usage. In another national poll by the Washington Post and ABC News, 74 percent of respondents said the NSA’s spying intrudes on their privacy rights.”

Jobless Benefits – “Seventy-three percent of voters want Congress to keep the extended unemployment benefits put in place to fight the recession, according to a new poll commissioned by the National Employment Law Project…”

Chained CPI/Social Security – “In a 2013 Pew Research Center poll, 87 percent of the respondents thought Social Security spending should remain the same or be raised. Furthermore this poll shows that 82 percent of Americans support increasing Social Security taxes on workers and 87 percent support raising taxes on the wealthy.”

Global Warming/Big Energy Companies – From NASA: “Ninety-seven percent of climate scientists agree that climate-warming trends over the past century are very likely due to human activities, and most of the leading scientific organizations worldwide have issued public statements endorsing this position.”

Even the wishes of the most knowledgeable scientific minds in our nation have been ignored. From an Obama speech delivered at Cushing, Oklahoma last year:

"Over the last three years, I've directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We're opening up more than 75 percent of our potential oil resources offshore. We've quadrupled the number of operating rigs to a record high. We've added enough new oil and gas pipeline to encircle the Earth, and then some. In fact, the problemis that we're actually producing so much oil and gasthat we don't have enough pipeline capacity to transport all of it where it needs to go."

Citizen’s United – “More than three-quarters of voters said that they support a Constitutional Amendment if one is necessary to limit the amount that corporations can spend in elections.”

The result: “A study by the Center for Responsive Politics found that in the 2012 election cycle, 536 donors gave $70,800 ($37,948,800 plus) or more to the Obama Victory Fund for Democratic Party Committees. And 721 donors gave $70,800 ($51,046,800 plus) or more to the Romney Victory Fund for Republican Party Committees.”

Wall Street Bailout – “Fifty-three percent think not enough was done to prosecute bankers; 15 percent were satisfied with the effort.”

The will of fifteen-percent of Americans won out…abetted by our own Justice Department.

In The Great American Class War: Plutocracy Versus Democracy, Bill Moyers said:

We are this close – this close! – to losing our democracy to the mercenary class. So close it’s as if we’re leaning way over the rim of the Grand Canyon waiting for a swift kick in the pants.
I think his warning came too late.

From a CNN poll released on December 26, 2013:

According to the survey, 73% say that this Congress has so far done nothing to address the country’s problems, with one in four disagreeing.


The poll also indicates there’s little optimism for the future.

“Negative attitudes extend to both sides of the aisle: 52% believe that the policies of the Democratic leaders in Congress would move the country in the wrong direction; 54% say the same about the policies of congressional Republicans,” Holland said.

And 54% say the same thing about President Barack Obama’s policies

Seventy-three percent.

As Chomsky’s said:

“…the proper term for that is not democracy; it's plutocracy.”

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Comment Preferences

  •  Prince William may well be on the Throne (0+ / 0-)

    In fifty three years to celebrate the millennium of the Conquest. He is a direct descendant. Assuming he follows his father the middle of the pack is looking a lot like the English Civil War and an unsettling moment for the family in front of Banqueting House.

  •  I've Called it a Democratic Plutocracy or (2+ / 0-)
    Recommended by:
    praenomen, Captain Sham

    democratic oligarchy because we do participate in elections, but as Chomsky indicates, what we elect are representatives of the plutocrats.

    Americans lost governance of their military in the late 1930's, and of their economy for the most part in the mid 70's. They've  been losing governance of many of the states since the 90's or so, maybe considerably earlier.

    Moyers' warning did indeed come quite late to the game.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Jan 02, 2014 at 03:45:47 PM PST

  •  Some complete twaddle (2+ / 0-)
    Recommended by:
    FG, Bill Ellson

    For a start, the only companies that can vote in the City elections are those that pay business rates in the City and who have employees working there. The number of votes they get is more or less one per 50 employees (sole traders or partners in small companies get a vote).

    Businesses operating within the city limits enjoy special privileges and protections, including access to untouchable, offshore tax havens.
    That is complete nonsense - something you picked up from Wikipedia? If that were so attractive, why are so many companies moving out of the City to the Canary Wharf area which is in the London Borough of Tower Hamlets - the Financial Services Authority is based there too.

    We will work, we will play, we will laugh, we will live. We will not waste one moment, nor sacrifice one bit of our freedom, because of fear.

    by Lib Dem FoP on Thu Jan 02, 2014 at 04:03:15 PM PST

    •  Actually, I did a lot of research on this paper, (0+ / 0-)

      and nearly everything I collected about the City of London came from British papers and websites. I read Wikipedia's entry on the City of London Corporation, but the information I entered came mostly from British websites including the City of London, the City of London Government, the City of London Common Council, and many more.

      I will agree that there is a lot of discrepency about the info that is posted on UK websites, so I retained only the information that seemed common among all of all, I collected over 45 pages of notes and research information, which was reduced to just a small section...

      •  Do they not put together a charity event, (0+ / 0-)

        the parade on New Years day? From what I understand, they select musical talent (marching bands, etc.) from all over the world--and are very good hosts.  Not to mention that they use it to raise money for worthy causes.

        •  You guys really need to read (1+ / 0-)
          Recommended by:

          about this place. I spent three days reading in-depth about the city, its history, its charter, and structure, and it is nothing like you and Lib Dem FoP have described.

          One thing is for certain, they are a plutocracy, that is undisputed, and there are a lot of British people who are angry with them, the same way that we are angry with U.S. corporations.

          For example: Lib Dem FoP wrote this:

          The number of votes they get is more or less one per 50 employees (sole traders or partners in small companies get a vote).
          Those numbers are inaccurate...and what he/she didn't say is that they are not residents of the city...they are proxies for the corporation.

          If you are that hyped up on plutocracies, then you and I certainly are on different sides.

        •  Confusion (1+ / 0-)
          Recommended by:
          Compost On The Weeds

          No, that is organized by the Mayor of (Greater) London. There is an annual parade when the new Lord Mayor of (the City of) London is inaugurated.

          Note the Lord Mayor post is primarily ceremonial. The City does indeed raise a lot for charity both via the Lord Mayor and the various livery companies. Perhaps the most famous Lord Mayor was Richard "Dick" Whittington, the "thrice Lord Mayor" (it actually was four times) who is a folk hero in part because he left part of his fortune to charity when he died in 1423. Now administered by the Mercers (cloth traders) Company (one of the livery companies), the charity still aids individuals and has "almshouses" that provide 56 homes for the elderly. He also aided hospitals and a hospital just north of the City still bears his name.

          You have been confused by the same conflation between the City of London as an administrative area, Greater London and the financial functions that were previously mostly centered on the square mile. "The City" is a similar shorthand as "Wall Street" is in the USA but electronic trading is far more prevalent than in New York and far more companies now base outside the City. CitiBank, Barclays and HSBC banks are all located at Canary Wharf - if you like I can take a photo from my window to show you the Citi and HSBC logos on their office blocks to demonstrate! (Will not as it's a bit overcast and wet in London today so it would not come out well even though I am just on the other side of the Thames.)

          These companies do have the right to nominate voters for the City elections because they have branches and therefore employees working in the area. The arrangements for the voting roll is complex which is why I considerably simplified it - eligibility to vote in elections in elections elsewhere in the UK is almost as complex with various groups being eligible to vote at some but not all elections. Irish and Commonwealth citizens can vote in all elections, EU citizens of other countries (Malta and Cyprus are Commonwealth countries) can vote at local and European Parliament elections. Rather like the non-resident business votes in the City, there used to be provision for "business rates" (local taxation) payers to have votes in local government elections in the rest of England although that was abolished in 1969. So in historical terms, the arrangements for company votes were not unusual.  

          Some countries' legislatures allow special arrangements for their citizens in other countries - the French National Assembly has additional constituencies for those living elsewhere. The UK is in the "Third" which covers northern Europe - you may be interested to know that French in the USA and Canada are in the "First" and are represented by Frédéric Lefebvre from the centre-right UMP.

          Fuller name of the administration of the square mile is "The Corporation of the City of London" and, apart from local non-business property "rates", has absolutely no powers to levy taxes or pass laws (contrary to the suggestion in the diary). The diarist also ignores the fact that there is another financial center in the Scottish capital which, by their logic, would not have access to the tax avoidance methods alluded to (although of course this would change if Scotland votes for independence.)

          None of this of course reduces the influence the financial sector, "The City", has in terms of both politics and financial regulation. That has been effected by a series of changes that again the diarist ignores. The Financial Services Authority (FSA) has now been split with its banking regulation functions reverting to the Bank of England and the rest with the new Financial Conduct Authority, which uses the old FSA building in Canary Wharf.  

          Legal tax avoidance (as opposed to illegal tax evasion) is under attack, something that the author does not recognize or realize. The biggest player used to be Barclays Bank but it closed its special unit last year in the midst of criticism. Some of the most egregious schemes run by, for example, Starbuck, Amazon and Google have been exposed and some are "voluntarily" paying monies over to HMCR (Her Majesty's Customs and Revenues which collects taxes). The Treasury itself has to be consulted before any new tax avoidance scheme is started and is likely to outlaw it before any tax is lost. In addition, companies which have used now banned schemes are excluded from bidding for government contracts.

          Perhaps if praenomen had spent 40 years in British politics rather than three days googling, he or she may not have used the more hysterical coverage from the past to justify their diatribe.

          We will work, we will play, we will laugh, we will live. We will not waste one moment, nor sacrifice one bit of our freedom, because of fear.

          by Lib Dem FoP on Fri Jan 03, 2014 at 03:42:37 AM PST

          [ Parent ]

  •  Any mention of The City makes me think (0+ / 0-)
  •  hmmm...yes and no... (0+ / 0-)
    U.S. Attorney General Eric Holder admitted to Congress that some banks were too big to prosecute, he tacitly acknowledged that the corporate world operates outside the jurisdiction of U.S. laws, and subsequently this elitist group has been granted a de facto, autonomous status that is similar to the privileged standing bestowed upon The City of London Corporation
    Overstated, but, whether "granted" or not, Wall Street [etc] certainly is operating as a de facto autonomous state.

    And we are being blackmailed. Obama has been being blackmailed. Main Street has been being blackmailed. Anyone not Wall Street-connected has been being blackmailed. It has been the intention of the Wall Street sphere to pull everyone down if we don't give them what they want.

    I thought everyone understood that in Sept 2008.

    Poverty is not an accident. Like slavery and apartheid, it is man-made and can be removed by the actions of human beings. —Nelson Mandela

    by kaliope on Fri Jan 03, 2014 at 01:31:46 AM PST

  •  Conspiracy Theories and other Codswallop (0+ / 0-)

    This article starts going wrong by implying that Greater London has a municipal government, it does not. Greater London was created by the London Government Act 1963. Greater London consists of the 32 boroughs, statutory corporations also created by the 1963 Act, and the pre-existing City of London. Municipal government in Greater London is provided by the said 32 boroughs and the City, all of which are local planning authorities (town planning / zoning), local education authorities, waste authorities (either individually or in partnership with neighbouring boroughs), housing authorities, highway authorities and licensing authorities (alcohol, entertainment & late night cafes) etc. The Mayor of London devises policies relating to town planning, waste, economic development etc, but does not provide municipal services.

    The City of London does not stand atop Londinium, it is the same place, which was never abandoned. Apart from the differences in how its members are elected, the City operates the same laws as the surrounding boroughs. All principal councils in England are statutory corporations see the 1963 Act & s2 Local Government Act 1972. Businesses operating within the City are subject to the same laws and pay the same taxes as businesses anywhere else in England. There are no special privileges or protections.

    English voters elect individual candidates who may or may not be members of a political party. Not all City of London residents pay taxes as many are children, elderly or in receipt of benefits. The City of london is divided into 25 wards each of which elects an Alderman and between two and ten Common Councilmen (depending on the number of electors). There are 6,632 residents and 15,581 business / others on the Ward Voting Lists. (others incude clergy, doctors, nurses and staff of other non-business institutions). Each Ward has both resident and business voters, although in pursuance of undrtakings given to Parliament about twelve years ago, four of the wards are predominantly residential. Two of those wards are basically council estates (housing schemes), but all four 'residential' wards elect the same sort independent candidates as the other wards despite party candidates standing. In the early 1990s the residents of the Golden Lane Estate (owned by the Corporation, but largely in the London Borough of Islington) sucessfully petitioned the Local Government Boundary Commission to alter the boundaries so that the whole estate was in the City.

    The Corpration does not have a charter, but is a corporation 'by prescription' - i.e. it is a Corporation because everybody has recognised it as such for a long time. Nicholas Shaxson is a Geneva based conspiracy theorist. Temple Bar was taken down in 1880s. Shaxson prattles on about privileges and freedoms, but has never been able to name a single one. The City is not a seperate jurisdiction and is subject to the same financial regulation, or lack of it, as the rest of England. George Monbiot is a conspiracy theorist who copies most of his guff, re the City, from Shaxson.

    Before his fall from grace Elliot Spitzer never seemed to perceive any corporation as too big to prosecute.

    Wikipedia contains whatever old codswallop people chose to post on it. Sadly, there are far more than 45 pages of twaddle about the City that directly derive from Shaxson's ramblings. That other people may have fallen for the same nonsense does not lend it an ounce of credability.

    Lib Dem FoP  
    Companies based in Tower Hamlets do not have the right to nominate voters in the City. Only businesses, or other institutions, based in the City can nominate voters and they have to be staff who work, or who did work in the City.

    "The Corporation of the City of London" runs a council in Canada, not England. The body that provides municipal services to the Square Mile is the Common Council of the City of London, which used to style itself as the 'Corporation of London', but since 2003 has adopted the style 'City of London Corporation'. In legal proceedings and land registration etc it continues to be known as 'The Mayor, Commanality and Citizens of the City of London'

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