On April 16th 1953, U.S. President Dwight D. Eisenhower gave his now famous speech The Chance for Peace. It’s a wide-ranging speech, but the part usually recounted – and closest to my heart – is as follows:

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.

Most of us already know what opportunity cost is and we’re probably not surprised to learn that heavy bombers are expensive, but something about Eisenhower’s direct comparison reaches out from the past and shakes us.

It’s been years since we first heard about the Panama Papers. The world’s wealthiest people were caught hiding their money from the rest of us. The numbers were unreal – so large it was hard to place them in our reality. Trillions of dollars passed through Panamanian firm Mossack Fonseca and while there have been some consequences the matter eventually slipped out of our collective consciousness, untethered as it was to our daily reality.

You can probably see where I’m going with this.

Doing the math

Where do we start? We need to know how much money was hidden – so far so good, the Panama Papers have that covered. Then we need to know how much tax would have been collected – that’s super tricky, because the amount of tax that would have been paid on money had it not been hidden depends on too many variables to name. Finally we’ll need to articulate what else that money could have paid for, which varies wildly depending on where you spend it. Most of these complications arise from the global nature of our problem space – Eisenhower had it easy!

Let’s skip ahead a couple of steps using the prior work of Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs. Moscovici estimated that offshore tax shelters like those revealed in the Panama Papers cost the public around €1,000,000,000,000 annually. That’s one trillion hard-to-really-comprehend Euro every year.

The Global Partnership for Education estimates the cost of “a complete education from pre-primary through upper secondary” in the developing world at €5,200 (currency conversion correct at time of writing) – note that this is the lifetime cost of an entire education, not the annual cost. India’s newest public hospital – state-of-the-art and their second largest – was recently completed at a cost of €161,668,600. Finally – for my fellow Melbournians – the cost of building a national-average-sized dwelling on a median-priced lot in Melbourne is apparently €364,600, the average number of occupants per dwelling is 2.7 and the number of homeless in Australia is around 105,000.

With these numbers in hand, we’re ready to look at the Panama Papers in a way we might actually remember.

To borrow from Eisenhower…

Every dollar of tax evaded signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. Our wealthiest people are not hoarding money alone. They are hoarding the sweat of our labourers, the genius of our scientists and the hopes of our children.

The annual cost of our wealthiest people evading taxes is this: A complete education for at least 190 million children in the developing world. It is more than 6 thousand large, fully-equipped hospitals in India. We pay for tax evasion with new homes that could have housed all of Australia’s homeless 70 times over each year.