We had a wide ranging discussion including, of course, his book, the reactions he’s had to it, particularly from within the off-shore world, his on-going research and writing, and the troubled conscience of some bankers.
First let me say that “Treasure Islands” is, in my opinion, a very good book indeed. It not only lays out the story of the genesis of the offshore, tax evading world, but it goes beyond the surface reporting of ‘what happened’ to offer a disturbing analysis of ‘how’ and ‘why’ it happened and for whose benefit. In so doing Mr Shaxson brings himself directly into conflict with the mainstream narrative of what global finance and global banking is and does.
The central point, though by no means the only point of ‘Treasure Islands’ is that “Offshore” is a critically important piece of misdirection. Off-shore is not a remote place, it is a process of colossal tax evasion and regulatory warfare. ‘Offshore’ is a clear, present and immediate threat to every nation’s ability to support and protect its citizens and control its economy. ‘Offshore’ is a partly orchestrated, partly evolved world of stateless money and power populated and used by a loyalty free financial elite to degrade Democracy, suborn Sovereignty and destroy national Independence.
Profound charges you might think. And so they are. And in a lesser book you might discount them as perhaps a little hysterical. But not in Mr Shaxson’s book because of page after page after chapter, of documented evidence. The freight train of evidence is a testament to Shaxon’s hard and thorough work, but also to the fact that so little of this story has been told elsewhere.
Page one of chapter one begins,
“The offshore world is all around us. More than half of world trade passes, at least on paper, through tax havens. Over half of all banking assets and a third of foreign direct investment by multinational corporations, are routed offshore. Some 85 per cent of international banking and bond issuance takes place in …a stateless offshore zone….”
Every assertion is cited. Mr Shaxson then ploughs straight on to document that in 2008, 83 of America’s 100 biggest corporations had subsidiaries in tax havens. In 2010 just those tax havens which are indeed small islands, though small and unindustrialized, and whose indigenous people are generally rather poor, housed around 18 trillion dollars worth of ‘assets’ which is a full third of the entire globe’s GDP. None of that money was produced in those tax havens. It merely appeared there by accounting magic so as to avoid having to contribute to the welfare of the places where it was produced.
But surely, you might be thinking, all this talk of small islands undermines the argument that ‘offshore’ is not just the financial doings that go on in remote places? And that is both the tension and the argument of the book. There are islands where the global elite and their money harbour. But they are just that – temporary harbours into which wealth retreats when threatened and from which it sails forth to wreak havoc for profit. The global financial system created those islands as safe, secure, wholly owned places where money could come ashore. The real power and force of the offshore world, like the sea, is in no country. Offshore is stateless. Rivers of wealth flow into it, money sucked up from the land falls like rain upon it. But the ‘it’ belongs to no nation and no nation can command it.
The offshore world was created by and is still fed by people, actions and wealth flowing out from the ‘onshore’ ordinary world where you and I live our lives. Specific people in our world created this stateless other world. Having created it they moved their wealth and legal status into it. “Treasure Islands” tells the story of who they were , what they did and often what prejudices and desires drove them. Mr Shaxson details how London is still the epicentre of the offshore world and how the US state of Delaware, diminutive on the physical map, is monstrous in the map of the invisible offshore world. The largest and most powerful parts of the tax evasion and financial secrecy system are in fact the UK and the US.
What makes places like London and Delaware important and powerful is that they are two places at once. There is the physical place governed by local laws, but alongside it, largely invisible is another London, another Delaware, which is not inhabited by its citizens, not regulated by their ordinary laws, not constrained by their needs nor loyal to them in any way whatsoever. In all these ways, this ‘other’ Delaware, ‘other’ London is as offshore as surely as if it was physically an island miles out to sea.
This is Mr Shaxson’s message. The enemy are among us. And they are an enemy. For they parasitize the ‘onshore’ world. They live here, ride in luxury limousines which use the roads, turn on the taps, flush the toilets to take their waste away like the rest of us, but make sure they only pay a fraction of the rate of tax that the rest of us pay. They will tell you how much they do pay but it is the widow’s mite in reverse.
Mr Shaxson’s argument is that the offshore world is now so powerful that it blackmails any nation that tries to stand up to it and regulate it’s operations. Any attempt to regulate is met with the threat that ‘if you regulate or tax us, then we will just move somewhere more compliant’. The argument is applied everywhere and the result is that nations are played off against each other with the lowest tax, lightest regulation ‘winning’. But the winner has little to show for the victory because what has been ‘won’ is the right to house corporations which pay as little tax as they can, write their own ‘regulations’ of voluntary codes and too-big-to give a damn mind set and call upon the public wealth contributed by those who do pay tax, to bail them out whenever they feel the need.
Offshore is a plague to which we have as yet developed no defence.
The system of global finance which is happy to speculate on food while people go hungry is a sickness. And there are people in that system who do not care. They are happy. Their attitude is, as Mr Shaxson explained, that “people should be able to arrange their tax as they see fit and screw everybody else.” Subscribe to any of the offshore-world publications such as “Sovereign Investor” and you will glimpse a world where second passports are advertized so you too can escape the tax system and general socialist ruin of your nation. You will read breathless adverts for learning which commodities are going to return outsized speculative returns. Which currencies to bet on. Which jurisdictions are best for avoiding paying taxes and which are ‘safest’ from any regulatory enquiry.
And yet within the offshore world of tax theft and regulatory contempt Mr Shaxson has found, as have I, a small guarded vein of conscience and doubt. It is something that has struck us both and about which we talked. One rather senior offshore banker said to him, “I feel very bad about what I do”. But as Mr Shaxson went on to say,
“Many in banking and multinationals do have a nagging feeling that what they are doing is wrong and they don’t like it, but feel they have to.”
They do it because if they don’t they are out and someone less troubled by any scrap of moral disquiet will take their place and their bonus. So they, as another banker put it, “manage to not check in with their conscience.”
But within the army of minions, some lesser, some grander and very wealthy, there are some who have qualms. Who have a residual respect for the nation and place they grew up in, whose customs and attitudes they feel some love for. These people know what they are doing is wrong. That it is destructive and it is vicious.
The offshore world is very large and very powerful. But it is vulnerable because it is essentially a parasite. It needs us. It commands no love or loyalty beyond the promise of personal and selfish gain. There are those within it who know what they are doing is morally wrong and would like to change. And we, for our part, can still revolt against it.
The Offshore world is deeply entwined in our political, financial and legal system and so to tear it out will not be easy. But we can, IF we find the courage to take back what is ours – our government – and use that to assert our needs and those of our children above the pointless greed of the global financial class.
"The Offshore world is deeply entwined in our political, financial and legal system and so to tear it out will not be easy. But we can, IF we find the courage to take back what is ours – our government"
You are going to laugh at what I am going to say but you are describing the symptoms of dishonest money.
There is very little we can do about the dynamic inherent in politics and/or people's natural inclinations. But there is a whole lot we can do about the nature of money.
The Offshore world is the logical outcome of debt based fiat money which is not least fed by supranational entities such as the UN, the IMF the World Bank and tutti quanti.
You may think I am rambling and what I point out is not related. But have you ever noticed how the UN never decline to disburse sums to countries or entities even when clear cases of corruption are detected and investigated?
This is not to detract from the work of those true idealists that are occasionally employed by the UN but the truth is that the infinitesimal amount of "good" done by the UN is fantastically disproportionate to the amount of resources that is invested. The waste and laxity in controls is biblical. This is so because the primary directive of the UN is to spend vast sums of money regardless of how, where or why. The UN, like the IMF or the World Bank are essential tools of DBFM which is predicated on perpetual and aggressive inflation. These sums must be parked somewhere and the Offshore world is the ideal warehouse.
"The Offshore world is deeply entwined in our political, financial and legal system and so to tear it out will not be easy. But we can, IF we find the courage to take back what is ours – our government "
As I already pointed out in comments on this blog in the past, taking back our government is improbably easy. But it requires some material sacrifice.
If we are ready to paralyze the credit system and take the consequences of a temporary reduction in our life style, we can take back our governments.
The masses must be made aware of what is the ultimate cause of the corruption and the absence of fiduciary duty. Failing this, students and activists needlessly get killed in physical confrontations with the security apparatus in the streets.
Paralyzing credit markets requires that we withdraw our savings from the major banks and we close down our lines of credit. It requires that we demand to see how our pensions and insurance contributions are invested and, eventually, demand the return of said funds even though we may be charged a penalty.
In light of the leverage in use by the major banks, even small dents of 5 or 10% can easily take down the major players.
What I just suggested is still legal. However, in Holland for example, parliament was debating a law to criminalize the mere act of suggesting what I just did.
Are we ready to make some material sacrifice?
Golem,
Great post as always.
This concerns me a bit. Offshore is a disgrace. Pure and simple. Everyone knows it. No one has ever tried to do anything about it.
That’s what concerns me. We the sheeple have always known this. We have either a) haven’t cared until now or b) have never really thought about it.
I’m pretty sure that if you get a population fed, housed, keep them warm and get them a big screen TV, you can as a ruling class do pretty much what you want. There is no better example of this than the current apathy in Ireland where the sheeple are being gang ass raped by the banksters. This bailout shit wouldn’t have washed 30 years ago. No question about it. Heads would have rolled. Good knows what Michael Collins and his ilk would have done to Sean Fitzpatrick 90 years ago…
I think that the fed, housed, warm and big t.v theory applies to 99.99% of the population – those from b – they have never really thought about it. I’m sure that the readers (and author) of this blog aren’t in that 99.99%. I think we fall into part a.
Here is the thing though – we have always known about offshore. It just takes common sense to realise that offshore isn’t any good. It’s no great revelation. Why would you bank in Panama when you can bank in a developed country?
Why have we never had this discussion before?
The reason, and it’s probably hard for us to admit is that we don’t really care until it affects us.
So a few people is some shit hole in Central America lead crappy lives. We the people don’t care. If we did care about stuff like that, we wouldn’t be buying all the crap that gets made in China off the back of slave labour. Let’s face it; we are all part of the same hypocrisy.
I’ve always thought that banksters are a disgrace and have lead us down a morally bankrupt path. I’m now beginning to think that maybe we are the problem and the banksters are just a symptom of us. I just can’t get my head around who is leading who. The problem this time is that the banksters have just pushed it too far, and we are going to have to suffer a decline in living standards. Either way, we have to control them, whether it’s for the right reasons or not.
We in the west have systematically supressed the rest of the world. John Pilger did a great documentary on what the Americans did to Latin America, and through the course of history, European Empires have been a disgrace. Look at the state we left Africa in. Given that human nature hasn’t changed in 2000 years, my guess is that it won’t change in the next 2000 years (except that it might be China in control and someone else providing the slave labour).
But back to the Offshore. We all benefited. Our banks get their profits, the politicians get a smooth system (and god knows what else), and the sheeple have benefited from easy money and low interest rates that the dirty money has brought.
Let’s just face it. It’s that way, because deep down, that’s the way the way we wanted it.
Until we radically alter society, and in particular the values of our ruling class, I can’t see it changing.
Unfortunately.
Super Off Topic
Explitives are heard so don't click if that offends you (it's not that bad). 1st time out with new camera I get the nazi id terror threat card played (wish I'd taped me lecturing them). 2nd time I get to see the public private space in action. I dunno if I wanna go out a third time.
Only kidding 🙂 I wanna see their face when I've got a megaphone to direct a horde of zombies Spend Money Or F£$K OFF
I've had Treasure Islands on my wish list since publication but this endorsement has given me the nudge I needed to make the purchase. Thanks Golem.
Thanks also for the recent posts – 'The New Normal' in particular was excellent. Your most succinct description yet of the causes and effects of the financial crisis, I think.
Guidoromero, I think you're on to something. The idea of the many using their small amounts of money cooperatively to reign in the power of the banks and show our political elites the real source of power is not only attractive from a poetic standpoint but makes a lot of sense too. Golem suggested the idea of a 'depositor's union' a while back and there was also the Cantona-inspired mass withdrawal campaign back in December. The idea, in one guise or another, keeps coming back. I think with enough effort, applied in the right way, it can gain real traction.
Does anybody else have any thoughts on how to best organise such a campaign?
24K,
just watched. Makes me angry. Document the decline.
It's a joke bro, everythings got little stubs so skaters can't skate and instead of a vibrant capital with cafes and buskers and life it's a mausoleum to shopping. Cold masonary and not because of any masons art but because it's hard wearing.
I can't give too much away but the zombies are primal and mone….. Nar, it'll spoil it dude.
Jamie, yes I do.
I'll preach it in cinemascope with my heart and soul and then others with their hearts and souls will spread it because it's free, not fake and the strangest movie they've ever seen.
That's my plan.
Plus I can back it up with the worlds first music video singing in front of real riot cops (prove me wrong if you can, but so far I haven't found one, google it, it's only me. The foo fighters were fake) and I've got two more worlds firsts to come still. So I'm running with it and if I fall, I'm getting back up.
You know when you see a dog with a juicy bone?
That's me.
Great post as usual G.
Jamie, I can wholeheartedly add my endorsement of Treasure Islands, I'm just finishing it now and it's been an essential read.
on a similar note to 24k (although slightly more light hearted) here's a link to a very amusing video that is an interesting reaction to the erosion of just some of our basic rights..
http://www.youtube.com/watch?v=qAQrsA3m8Bg
Hey 24K, is that Cardiff? Disgraceful. Land of my fathers, eh? Not anymore, it seems.
Keep up the excellent work and good luck with BTG – can't wait to see it.
Pascal, yeah those guys are great. I love the old guy on the happy carrige getting people to welcome new travellers by a round of applause! Genius! Need more of that.
Rebecca, it's quite sinister the overload of so called desire and tesco metro. Glad you liked the video. Headdresses are nice aren't they! I wore it as an icon of ceremony, a proud people trampled over, importance, and my Nan and Bamps used to dress up and go to country a western nights, Nan as Indian and Bamp as Cowboy. I rekon if I took a Magnum to school now like I did when I was in juniors they put me on medication. All they did is take it off me and give it back at the end of the day, no fuss 😀
Never heard of that story, amazing.
JamieG, aye boyo, what happens when they sell the other side? Nobody asked me.
Thanks dude, I love the conversation you guys have about the money, bit over my head sometimes for me to join in, I like the spiritual ones more 🙂
Be great if you all could come to a consensus on a direction you would take given the chance as I've figured out Blythe Munsters scene and words but I have a discussion by some drinks machines at the 555th floor on the future and still have to write the showdown with Blankfeind.
To go with the Bond theme I thought of adding a doomsday where they flood the world with ZDRs to zombify the whole world. hehe the ZMF 😀
I even like the start of Casino Royal in B+W. Take out some troll…
Or was it Quantum Of Solace?
I agree too. The issues have always been about how we get change that matters without an even worse command and control system. Teaching is now less critical than ever. RT (with its shades of Radio Moscow)is better than our press. I think they are plying for war.
Great post again. A bit more lyrical than of late.
" … housed around 18 trillion dollars worth of 'assets' which is a full third of the entire globe's GDP."
Is that all? $54TN is the sum 'wealth' of the world? Back of a CIE bus ticket calculation means that Ireland, 0.06% of the world's population owes 0.5% of the world's wealth. Staggering in a way.
Ken,
Depends how you calculate and what you count. If you start counting CDS contracts for example then you get nominal figures vastly greater. But are such bits of paper wealth of the kind we should count as GDP?
In a way you are poking into the very heart of the crisis – of all these debt backed contracts and 'assets' which are really 'wealth'?
They certainly confer power but through 'negative' wealth – debt, rather than 'positive' wealth. Dangerous, difficult and baggy coincepts but ones we all know have some basis in reality and with which we therefore have to wrestle if we are going to reclaim some sense and order in our lives.
Not only is what you write about operating at the multi – trillion dollar international level, it's now being sold to the customer in UK high streets. Here's an anecdote.
Recently I tried to open a business account at a branch of Lloyds TSB as a sole trader small business. I'm a musician/ artist and, as I told the bank, would be earning less than the national minimum wage, but this money would be coming from various countries – USA, Japan, Europe, UK, wherever I sell records, perform, etc. So what kind of account would I need to receive ( or make )payments in at least four different currencies?
Answer : Either a) you open a foreign currency account at this branch for each separate currency and pay charges on each separate account or
b) your best bet, sir, is to open an offshore account and avoid all charges, less rules, much more flexible, pay in and out in any currency you like… here's the Lloyds Offshore Phone number. Why not give them a call ?
So, despite finding this proposal ludicrous, I called them, and a couple of other high street bans offshore dept's. And whereas Barclays, and other private banks, require £10,000 to open an offshore, the 84% state owned lloyds TSB permits – encourages- local businesses to open an offshore account with no minimum deposit.
(ps i declined the offer. Many others will not.)
Another brilliant post Golem – kudos and thanks to you.