The future of our earth looks bleak, capitalism will be established in space in the near future. So will tax havens!

"To evangelists of asteroid mining, the heavens are not just a frontier but a vast and resource-rich place teeming with opportunity. According to NASA, there are potentially 100,000 near-Earth objects — including asteroids and comets — in the neighborhood of our planet. Some of these NEOs, as they’re called, are small. Others are substantial and potentially packed full of water and various important minerals, such as nickel, cobalt, and iron. One day, advocates believe, those objects will be tapped by variations on the equipment used in the coal mines of Kentucky or in the diamond mines of Africa. And for immense gain: According to industry experts, the contents of a single asteroid could be worth trillions of dollars."
Two amusing headlines by, 
Thursday, April 28

"U.S. servicemembers who were involved in the October 2015 strike on an MSF hospital in Afghanistan will receive counseling and letters of reprimand..."

"Despite a conflict in South Suden [sic] that has left 50,000 dead, Washington is still hesitating to impose sanctions and an arms embargo on the country..."
A good analysis, but with a utopia.

"But for all the clarity of this historical continuity, it cannot deliver us from the particularities of the present. The most obvious difference between the pre- and postmodern circulation struggles is the contemporary primacy of the “race riot.” That term too easily forgets the great inversion that occurs sometime after the world wars. From the nineteenth century on, the racialized riots of the United States featured white mobs attacking not just African-American but famously Asian and Latin American groups — events among which the Zoot Suit Riots are only the best-known example. It’s not until the ‘60s that the phrase fastens its current meaning. There is something bizarre and perhaps obscene in the extent to which the political memory of “the sixties” is in the US dominated by the free speech and antiwar movements. This is not to diminish such projects, but rather to underscore the historical forgetting of the great rebellions of Watts, Newark, Detroit, Chicago, and hundreds of other uprisings. Almost 160 in 1967 alone, black America’s 1968. And these are in turn inseparable from the forces that drove black exclusion, the political economy of social death: automation, weakening profits, and the Last Hired/First Fired policies that ejected vast numbers of African-Americans from the urban industrial jobs which had drawn them during the great migrations."
Baltimore Riot. Baltimore Commune?

 Europe’s Joint-Smoking, Gay-Club Hopping Terrorists

The Abdeslam brothers, with their sudden escalation from dancing in nightclubs to killing in them over the course of a few months, seem to challenge this picture. They also raise a deeper and more troubling question for those seeking to understand the genesis of terrorist acts: What if they were not “radicalized” and underwent no dramatic metamorphosis at all? What if their violence had only the most tenuous connection to what they believed, whatever that was? What if the story of how they came to be involved in terrorism had no real coherent narrative arc? What if the script of terrorism doesn’t always feature the drama of radicalization?
According to one of the two friends who filmed the nightclub footage, the Abdeslam brothers “were nice people.… I suppose you could say they lived life to the full.” The other friend, going by the name “Karim,” adds: “I saw Salah joke, smoke, drink, and play cards.… If anything, he liked women. He was something of a ladies’ man, and I heard he had a girlfriend at one point.” The CNN report continues, “At the time, the friends said they had no idea that the two had embarked upon their journey toward radicalism.… ‘They must have been changing bit by bit.
Despite its seeming exotic otherness, and for all its theological quiddities, the world of the Islamic State is not wholly disconnected from that of our own. Its ideals of heroic self-sacrifice, adventure, violence, and machismo are mirrored, albeit in a secularized and far more muted form, in our own culture; they find less constrained expression, for example, in our movies. In other words, the breach between those who join the Islamic State and “us” is not as deep as we would like to think. It is even narrower in the case of Molenbeek in Brussels, where a hybrid subculture of crime, violence, and jihadi activism has taken root. The Washington Post’s Anthony Faiola and Souad Mekhennet describe members of this subculture as “part terrorist, part gangster”: liminal badasses who exist between two overlapping worlds, for whom, as terrorism expert Rik Coolsaet documents in a recent study of Belgian foreign fighters in Syria and Iraq, “joining [the Islamic State] is merely a shift to another form of deviant behaviour, next to membership of street gangs, rioting, drug trafficking and juvenile delinquency.”
Crisis in Brazil

"The Workers’ Party believed, after a time, that it could use the established order in Brazil to benefit the poor, without harm – indeed with help – to the rich. It did benefit the poor, as it set out to do. But once it accepted the price of entry into a diseased political system, the door closed behind it. The party itself withered, becoming an enclave in the state, without self-awareness or strategic direction, so blind that it ostracised André Singer, its best thinker, for a mess of spin-doctors and pollsters, so insensible it took lucre, wherever it came from, as the condition of power. Its achievements will remain. Whether the party will itself do so is an open question. In South America, a cycle is coming to an end. For a decade and a half, relieved of attention by the US, buoyed by the commodities boom, and drawing on deep reserves of popular tradition, the continent was the only part of the world where rebellious social movements coexisted with heterodox governments. In the wake of 2008, there are now plenty of the former elsewhere. But none so far of the latter. A global exception is closing, with no relay yet in sight."
'Though conclusive evidence is hard to come by, it is difficult to read Shakespeare without feeling that he was almost certainly familiar with the writings of Hegel, Marx, Nietzsche, Freud, Wittgenstein and Derrida.' — Terry Eagleton
Labour was “a class party and the class is not my class.  The class war will find me on the side of the educated bourgeoisie.” — John Maynard Keynes (Skidelsky p371)
وطبقاً لما جاء في تقرير لمنظمة التعاون الاقتصادي والتنمية لعام 2010، تعتبر بريطانيا حقاً بين أسوأ الدول في معايير معينة للتغير الاجتماعي المتعلق بالانتقال من طبقة اجتماعية إلى طبقة أخرى، حيث وجد التقرير أن ثروة الوالدين تمنح الطفل فرصة لتعليم عالي المستوى ووظيفة براتب ممتاز.
رغم ذلك، كان هناك معدل زيادة منتظم في عدد السكان بعد الحرب العالمية الثانية، توقع معه كل طفل أن يكون أفضل حالاً من والديه ولو بقدر يسير. ولسوء الحظ، فإن أعداد الأشخاص الذين انتقلوا بين الطبقات صعوداً أو هبوطاً يبدو أنها تتراجع.
ويقول إرزيبيت باكودي، من جامعة أكسفورد: "أعداد أكبر من النساء والرجال ينتقلون من طبقات أعلى إلى طبقات أدنى وأعداد أقل من السابق تنتقل من الطبقات الأدنى إلى الأعلى".
ويطلق باكودي على هذه الحالة اسم "الجانب المظلم من العصر الذهبي لحقبة الانتقال الطبقي". فكلما زاد عدد الناس الذين يتبوأون القمة كلما توقعنا سقوط المزيد من الناس إلى الهاوية.
"The so-called Arab Spring has been most often described as a revolt of Westernized, secularized youth, the latest instance of the democratic wave which toppled authoritarian regimes in southern Europe in 1970s, southern cone in 1980s, Eastern Europe in 1990s. This explanation is very popular among Western and Westoxicated audiences. For them the pictures on CNN and BBC–showing young people in Tunisia, Egypt, Yemen, Bahrain, wearing jeans, using social media, seemingly captivated by the appeal of Western prosperity and democracy–was very seductive. This representation confirms for Westerners and the Westoxicated that the West is the ultimate source of liberation. Such beliefs are based on the assumption that liberation can only be achieved by imitating the West. Alas, for the rest of us on this planet, things are far-less clear-cut. Outside Eastern Europe, most of the people of the world have not experienced the West as the vanguard of emancipation; rather they have been the subjects of Western empires and exploitation. After all, almost ninety per cent of the people ruled by London, Paris, and Amsterdam had virtually no political rights.
The idea that the Arab Spring was secular is based on a rather confused idea about what Islamism is and what secularism is. Even Western coverage of protests would wonder aloud at how big the crowds would be after Jummah prayers. So clearly, the signifier of Islam was present in the Arab Spring. Wearing jeans or using social media are not very useful markers of working out the political orientation of those who opposed the tyrannies of Tunisia, Yemen, Egypt, and Bahrain. Like any popular eruption, the Arab Spring contained many disparate elements, who created a common front through opposition to what were Kemalist dictatorships. These mass gatherings included hundreds and thousands of people who then went on to vote for Islamist-type parties. They also included, in some cases, many liberals and secularists who cheered as the Kemalist deep state launched its coup in Egypt.
The Sisi regime has sought to liquidate the Muslim Brotherhood. In this endeavor it has been supported or at least not opposed by large swathes of so-called liberal and secular opinion in Egypt. The Arab Spring was not hijacked by Islamism rather it was crushed by the Kemalist reaction. The Arab Spring and continuing upheavals associated with it are a product of structural changes in the international system. These include the end of the Cold War, the collapse of the Mukhabarat states, and the deepening decolonization within the Islamicate networks." — Salman Sayyid

The Caliphate beyond ISIS
"Brazil has turned dramatically against the country’s first female president. Once one of the most popular leaders in the world, with approval ratings of 92%, Rousseff has since seen her support plunge as a result of economic recession, political turmoil and the Lava Jato investigation into corruption at Petrobras, which has implicated almost all of the major parties.

On a dark night, arguably the lowest point was when Jair Bolsonaro, the far-right deputy from Rio de Janeiro, dedicated his yes vote to Carlos Brilhante Ustra, the colonel who headed the Doi-Codi torture unit during the dictatorship era. Rousseff, a former guerrilla, was among those tortured. Bolsonaro’s move prompted left-wing deputy Jean Wyllys to spit towards him.
Eduardo Bolsonaro, his son and also a deputy, used his time at the microphone to honour the general responsible for the military coup in 1964.
Deputies were called one by one to the microphone by the instigator of the impeachment process, Cunha – an evangelical conservative who is himself accused of perjury and corruption – and one by one they condemned the president.
Yes, voted Paulo Maluf, who is on Interpol’s red list for conspiracy. Yes, voted Nilton Capixiba, who is accused of money laundering. “For the love of God, yes!” declared Silas Camara, who is under investigation for forging documents and misappropriating public funds.

And yes, voted the vast majority of the more than 150 deputies who are implicated in crimes but protected by their status as parliamentarians."
Via Michael Roberts

"New UN report finds almost no industry profitable if environmental costs were included.

A new report by Trucost on behalf of The Economics of Ecosystems and Biodiversity (TEEB) program sponsored by United Nations Environmental Program, examined the money earned by the biggest industries on this planet, and then contrasted them with 100 different types of environmental costs. To make this easier, they turned these 100 categories into 6: water use, land use, greenhouse gas emissions, waste pollution, land pollution, and water pollution.

The report found that when you took the externalized costs into effect, essentially NONE of the industries was actually making a profit. The huge profit margins being made by the world’s most profitable industries (oil, meat, tobacco, mining, electronics) is being paid for against the future: we are trading long term sustainability for the benefit of shareholders. Sometimes the environmental costs vastly outweighed revenue, meaning that these industries would be constantly losing money had they actually been paying for the ecological damage and strain they were causing.
In terms of land and water use: almost no companies are actually paying a price remotely comparable for what they are actually taking away from the ecosystems. Consider that fact that Nestle pumps water out of drought-ridden California without limits for an unannounced but extremely low price, and turns around and sells this exact same water back to those affected by the resulting droughts for approximate $4 billion profit per year (based on 2012 data)."

New UN report finds almost no industry profitable if environmental costs were included

I don't think the solution proposed in the article can make any significant change. It may slow down the destruction, but it cannot prevent it under the current system of production.

A Structuralism of Feeling? Alberto Toscano on Frédéric Lordon

"In recognizing, with Spinoza, the irreducible role of the passions in human affairs, Lordon hopes to bid farewell to the allegedly utopian tendencies in Marx, insisting instead on the, at best, regulative character of communism. Lordon’s wager is that Spinoza’s theory of the passions can both elucidate our psychic investments in the capital-relation and delineate some parameters for the struggle against domination; yet the upshot is little more than schematic recipes for converting sad into joyful passions. Like many of his contemporaries, Lordon tends to over-estimate the psychic power of neoliberalism while under-estimating the force of misery evident in austerity; the relation of Marxian ‘need’ to Spinozian ‘passion’ remains untheorized. In contemporary conditions, Spinozist visions of radical democratic progress, understood as the ‘enrichment of life by joyous affects’, appear as considerably more utopian than the imaginary of transition in the Critique of the Gotha Programme, for example."
"The most shocking thing about the Panama papers is not the likely criminality and drug laundering, but that it is legal.  It is legal in most countries to set up an ‘offshore’ account for a company or trust as long as the directors are not ‘resident’ in the country where taxes should be paid. The company may be subject to local taxes but these are minimal or non-existent..."

A good post with facts and a solution

Opening the Panama Canal

The NGO-ization of Resistance

"The NGO-ization of politics threatens to turn resistance into a well-mannered, reasonable, salaried, 9-to-5 job. With a few perks thrown in. Real resistance has real consequences. And no salary."

Related articles:

"It was remarked that of the $150bn (£105bn) spent in aid globally, still only 1% directly reaches southern civil society organisations. I know from experience how frustrating southern NGOs find it when there’s always money to write a report or host a workshop; but never enough for more local staff. If poverty could be overcome from report writing, then we would have solved it long ago." — Deborah Doane, the Guardian, 13 March 2016

Crisis in Brazil

The trade unions, if somewhat more active under Dilma, were a shadow of their combative past. The poor remained passive beneficiaries of PT rule, which had never educated or organised them, let alone mobilised them as a collective force. Social movements – of the landless, or the homeless – had been kept at a distance. Intellectuals were marginalised. But not only had there been no political potentiation of energies from below. The style of the material benefactions of the regime created little solidarity. There was no redistribution of wealth or income: the infamously regressive tax structure bequeathed by Cardoso to Lula, penalising the poor to pamper the rich, was left untouched. Distribution there was, appreciably raising the living standards of the least well-off, but it was individualised in form. With the Bolsa Família taking the form of disbursements to mothers of school-age children, this could not have been otherwise. Increases in the minimum wage meant there was an expansion of the number of workers with a carteira assinada, entitling them to the rights of formal employment; but no rise, if anything a decline, in unionisation. Above all, with the arrival of crédito consignado – bank loans at high interest rates deducted in advance from wages – private consumption was unleashed without restraint at the expense of public services, whose improvement would have been a more expensive way of stimulating the economy. Purchase of electronics, white goods and vehicles was fanned (cars through tax incitements), while the water supply, paved roads, efficient buses, acceptable sewage disposal, decent schools and hospitals were neglected. Collective goods had neither ideological nor practical priority. So along with much needed, genuine improvements in domestic living conditions, consumerism in its deteriorated sense spread downwards through the social hierarchy from a middle class besotted, even by international standards, with magazines and malls.
How damaging this has been for the PT can be seen in the fate of housing, where collective and individual needs most visibly intersect. With the consumer bubble came a much more dramatic real-estate bubble, in which vast fortunes were made by developers and construction firms, while the price of housing for the majority of those living in big cities soared, and about a tenth of the population lacked adequate dwellings. From 2005 to 2014, credit for real-estate speculation and construction increased twenty times over; in São Paulo and Rio prices per square metre quadrupled. In São Paulo, average rents increased 146 per cent in 2010 alone. In the same years there were six million vacant apartments, while seven million families were in need of decent housing. Rather than itself increasing the supply of popular housing, the government funded private contractors to build settlements at a handsome profit in exurban areas, charging rents typically beyond the reach of the poorest layer of the population, and stood by as local authorities launched evictions of those who occupied vacant lots. In face of all this, social movements have sprung up among the homeless, and are now the most important in Brazil: these movements are not around, but against the PT.
Lacking any popular counter-force to withstand concerted pressure from the country’s elites, Dilma no doubt hoped, after her narrow re-election, that by beating an economic retreat, with an initial belt-tightening like that of Lula’s first years in power, she could reproduce the same kind of upturn. But external conditions precluded any comparable outcome. The dance of the commodities has gone, and recovery, whenever it comes, is likely to be subdued. It can be argued that, viewed in context, the extent of current difficulties should not be exaggerated. The country is in a severe recession, with GDP falling 3.7 per cent last year, and probably much the same this year. On the other hand, unemployment has yet to reach the levels of France, let alone Spain. Inflation is lower than in Cardoso’s last years, and reserves higher. Public debt is half that of Italy, though given Brazilian interest rates, the cost of servicing it is far greater. The fiscal deficit is below the EU average. All these figures are likely to worsen. Still, so far the depth of the economic hole does not match the volume of ideological clamour about it: partisan opposition and neoliberal fixation have every interest in overstating the country’s plight. But that scarcely reduces the scale of the crisis in which the PT is now floundering, which is not just economic, but political.

"Sure enough Sartre did have something for us: a prepared text of about two typed pages that – I write entirely on the basis of a twenty-year-old memory of the moment – praised the courage of Anwar Sadat in the most banal platitudes imaginable. I cannot recall that many words were said about the Palestinians, or about territory, or about the tragic past. Certainly no reference was made to Israeli settler-colonialism, similar in many ways to French practice in Algeria. It was about as informative as a Reuters dispatch, obviously written by the egregious Victor to get Sartre, whom he seemed completely to command, off the hook. I was quite shattered to discover that this intellectual hero had succumbed in his later years to such a reactionary mentor, and that on the subject of Palestine the former warrior on behalf of the oppressed had nothing to offer beyond the most conventional, journalistic praise for an already well-celebrated Egyptian leader. For the rest of that day Sartre resumed his silence, and the proceedings continued as before. I recalled an apocryphal story in which twenty years earlier Sartre had travelled to Rome to meet Fanon (then dying of leukemia) and harangued him about the dramas of Algeria for (it was claimed) 16 non-stop hours, until Simone made him desist. Gone for ever was that Sartre.

One further point. A few weeks ago I happened to catch part of Bouillon de culture, Bernard Pivot’s weekly discussion programme, screened on French television, and broadcast in the US a short time later. The programme was about Sartre’s slow posthumous rehabilitation in the face of continuing criticism of his political sins. Bernard-Henry Lévy, than whom in quality of mind and political courage there could scarcely be anyone more different from Sartre, was there to flog his approving study of the older philosopher. (I confess that I haven’t read it, and do not soon plan to.) He was not so bad really, said the patronising B-HL; there were things about him, after all, that were consistently admirable and politically correct. B-HL intended this to balance what he considered the well-founded criticism of Sartre (made into a nauseating mantra by Paul Johnson) as having always been wrong on Communism. ‘For example,’ B-HL intoned, ‘Sartre’s record on Israel was perfect: he never deviated and he remained a complete supporter of the Jewish state.’

For reasons that we still cannot know for certain, Sartre did indeed remain constant in his fundamental pro-Zionism. Whether that was because he was afraid of seeming anti-semitic, or because he felt guilt about the Holocaust, or because he allowed himself no deep appreciation of the Palestinians as victims of and fighters against Israel’s injustice, or for some other reason, I shall never know. All I do know is that as a very old man he seemed pretty much the same as he had been when somewhat younger: a bitter disappointment to every (non-Algerian) Arab who admired him. Certainly Bertrand Russell was better than Sartre, and in his last years (though led on and, some would say, totally manipulated by my former Princeton classmate and one-time friend, Ralph Schoenman) actually took positions critical of Israel’s policies towards the Arabs. I guess we need to understand why great old men are liable to succumb either to the wiles of younger ones, or to the grip of an unmodifiable political belief. It’s a dispiriting thought, but it’s what happened to Sartre. With the exception of Algeria, the justice of the Arab cause simply could not make an impression on him, and whether it was entirely because of Israel or because of a basic lack of sympathy – cultural or perhaps religious – it’s impossible for me to say. In this he was quite unlike his friend and idol Jean Genet, who celebrated his strange passion for Palestinians in an extended sojourn with them and by writing the extraordinary ‘Quatre Heures à Sabra et Chatila’ and Le Captif amoureux."

Edward Said, Dairy

The Roosevelt/JP Morgan connection in the setting-up of the new state was a direct one. The Americans’ paperwork was done by a Republican party lawyer close to the administration, William Cromwell, who acted as legal counsel for JP Morgan.
JP Morgan led the American banks in gradually turning Panama into a financial centre – and a haven for tax evasion and money laundering – as well as a passage for shipping, with which these practices were at first entwined when Panama began to register foreign ships to carry fuel for the Standard Oil company in order for the corporation to avoid US tax liabilities.
Some interesting arguments, but I think the take on Turkey is poor and superficial as it ignores Turkey's neo-liberal project, a state as a NATO member, its ties with Isreal, its role in the ongoing war in Syria and the geopolitical game has been playing to assert itself as a regional power, its record of repression of journalists and trade unions and, of course, its ongoing war on the Kurds. 

"It has to be remembered that liberalism has historically been compatible with racism, imperialism and colonialism. Liberalism without a commitment to a popular agency is not necessarily an emancipatory force." Salman Sayyid

Junaid Ahmad (JA): Dr. Sayyid, your earlier work, in particular A Fundamental Fear, was a scathing critique of existing accounts the rise of Islamism as well as what it signifies. It was a bold and innovative engagement with “critical theory” and the question of Islam and Islamism. But in some ways, your latest book is even more provocative and audacious—and not simply because of its title, Recalling the Caliphate: Decolonisation and World Order. It deconstructs the Eurocentrism embedded in the mantras of Western power today, or the discourse you term "Westernesse." One of the functions that you say this recent work of yours serves is to offer a "clearing" of/for the seemingly omnipresent orientalist tropes to which Muslims are forced to respond. Can you explain this notion/function of "clearing" that you speak of?

Many a ruling class has sought to erase from historical memory the blood and squalor in which it was born. As Blaise Pascal admonishes with arresting candour in his Pensées, ‘The truth about the [original] usurpation must not be made apparent; it came about originally without reason and has become reasonable. We must see that it is regarded as authentic and eternal, and its origins must be hidden if we do not want it soon to end.’ Kant, too, was wary of speculation on the origins of political power, which he thought a menace to the state. It is not just that these are bloody and arbitrary; it is also the sheer scandal of an origin as such, for what was born can also die. It is certain, Hume writes in his Treatise of Human Nature, that at the origin of every nation we will find rebellion and usurpation; it is time alone which ‘reconciles men to an authority, and makes it seem just and reasonable’. Political legitimacy, in short, is founded on fading memory and blunted sensibility, as crimes come to grow on us like old cronies. So it is that in Britain, France, Ireland and elsewhere, historiographical revisionism in the late bourgeois epoch comes to rewrite the heroics of revolution as the pragmatics of power, in a ceremony of self-oblivion which is not without its neurotic symptomatology.
Terry Eagleton, 2002
Thirteen years of near-unbroken hostilities in Iraq have been desperately unkind to the environment. Heavily agricultural Nineveh and Kirkuk governorates, on the fringes of Iraq’s “Sunni Triangle,” were caught up in the chaos that followed the U.S.-led invasion in 2003. As far back as the 1980s, when Saddam Hussein press-ganged agricultural laborers into military service to fight Iran, landholders have had no choice but to adapt to the vagaries of war.

For farmers still reeling from past troubles, the latest iteration of the conflict has plunged them even deeper into misery — and possibly sounded the death knell for agriculture in large parts of the country.

At least a million acres of prime arable land has been rendered unusable as the Islamic State lays waste to huge swaths of Iraqi territory.  Systematic looting has robbed farms of much of the equipment necessary to renew operations. In an unprecedented development, some Iraqis have seen their land purposefully destroyed by their retreating enemies for no obvious military end.

“Living in this area, we’d seen chaos in the past,” said Fahad Hamad Omar, a Yazidi sheikh who was driven from his farm at the foot of Mount Sinjar into a refugee camp on the mountain’s peak, when the Islamic State initiated its genocide of his ancient ethno-religious group in August 2014. “Never before, though, had people deliberately torched our fields. Never had they tried to completely wreck our livelihoods. Never have we encountered such animals.”

"All of this goes a little way to explaining why Britain has, for some time now, been considered the global capital for criminal money laundering among those in the know. Perhaps, with the release of the Panama Papers, the last sheen of respectability will finally be stripped away."

The “Panama Papers” show that the sun never sets on the United Kingdom’s tax havens.

[Republished without foreignpolicy permission]

There is a temptation, when looking at the astonishing “Panama Papers,” to start by searching for politicians from your own country who are implicated. If you are British and approach the documents in this way, you’ll find slim pickings in the information released so far.
Among the many thousands of names listed in the leak as possibly implicated in dodgy tax deals, there can’t be any appearance less surprising than that of Baroness Pamela Sharples, the widow of the former governor of Bermuda. That is, until you get to Lord Michael Ashcroft — billionaire, Belizean national, and former deputy chair of the Conservative Party — who would have been more remarkable if he had been absent. Then there’s Michael Mates, a former Tory MP, who stood down in 2010 amid another business scandal. And David Cameron’s late father, but again — hardly a surprise.
To engage in this exercise, however, is to largely miss the point: not just the point of this astonishing leak, but the point of the whole United Kingdom. Because it’s hard not to look at the whole affair and see Britain right at the core of it. Or, at least, the British state, which one might argue is a very different entity.
There are, you see, a few important facts we are rarely told about the British state. Like, for instance, the fact that it governs more land in the Southern Hemisphere than the Northern; more penguins than any other; that there are 18 legislatures under Westminster’s auspices; and that these include the governments that oversee by far the most important network of tax havens in the world.
With the City of London at its center, Britain’s network of refuges from taxes, regulations, and other pesky laws stretches first to the crown dependencies — the Isle of Man, Guernsey, and Jersey — and then into the 14 British overseas territories: places like the British Virgin Islands, Bermuda, and the Cayman Islands. From there, this web extends to places like Hong Kong, not under British rule since 1997 but, according to author Nicholas Shaxson, still feeding “billions in business to the City.”
The overseas territories — the last vestiges of the old empire — each have slightly different political structures, but all of them have a governor figure, appointed by the British government. All of them hand control of their foreign policy over to Westminster, and all of them depend on the motherland for military protection: The Falklands War is an obvious example, but let’s not forget that when Tony Blair famously claimed Saddam Hussein had weapons of mass destruction capable of reaching British military targets within 45 minutes, he was referring not to London, but to Akrotiri and Dhekelia, Britain’s military bases and overseas territory on Cyprus. Akrotiri and Dhekelia still serve a strategic purpose, which make them the exception; most of the overseas territories have evolved into, essentially, parking lots for the wealth of the .01 percent. It’s worth pointing out that more than half of the companies listed in the leaked Mossack Fonseca documents are registered in the U.K. or its overseas territories — and they’re not based in Birmingham.
It’s easy to focus on the idea that this is another story about possible corruption in the governments of countries in the “global south” — those developing nations of Africa, Asia, and Latin America — or the former Soviet Union. And, of course, it is that too. But it’s important to recognize that this is also a story about Britain’s changing role in the world.
Of course, the overseas territories are far from new — some date back to the earliest days of the British (or, English, as it was then) Empire and were vital parts of the English tradition of piracy. Bermuda, for example, was managed by a series of English companies before becoming an official royal colony in 1684. But the evolving role of these small corners of British influence tells a story of how, over the last 100 years, Britain switched from a land empire to a financial empire: from conquering the world to laundering its money, through treasure islands distributed across the planet, hiding pots of gold for corrupt leaders, tax dodgers, drug dealers, and embargo breachers.
Want to understand how things on the edges got so bad? Look to the center: The City of London itself is even older than the empire. The 1.12 square miles that make up London’s financial center have had their own constitutional arrangements for a millennium. (As Shaxson notes, it’s said that William the Conqueror allowed the City to keep its “ancient rights” in 1067, as he trashed the rest of the country.) Today, those square miles are governed by the City of London Corporation, whose representatives are elected by the businesses that operate there, and they have an unelected representative who sits in Parliament, as well as their own police force, which has been remarkably unsuccessful in policing British banks.
Because having its own built-in constitutional protections wasn’t sufficient, in 2010, the City paid for more than half of the Conservative Party’s election campaign, ensuring Cameron’s narrow victory (along with the aforementioned Lord Ashcroft) and that any significant new regulations on finance after the 2008 crisis would be politically impossible. To be sure, however, the Labour Party didn’t do anything to regulate the city in the previous 13 years when it was in power — winning it over with a famous “prawn cocktail offensive” that was a key part of its strategy to get into No. 10 Downing St. in the first place. All of this goes a little way to explaining why Britain has, for some time now, been considered the global capital for criminal money laundering among those in the know. Perhaps, with the release of the Panama Papers, the last sheen of respectability will finally be stripped away.
If we want to understand modern Britain, we first need to realize that our primary economic function in the world today is probably our network of tax havens. After all, around $21 trillionis estimated to sit in offshore accounts, of which Britain’s territories are said to make up by far the biggest part. Our own GDP is only around $3 trillion.
Second, we need to come to grips with the serious claims about our role as the global money-laundering capital. This isn’t just something we should be ashamed of — it also causes the country significant economic problems: It pushes up the price of the pound so far as to make our other exports unaffordable (bye-bye, steel industry); it drives up the cost of housing in London and the South East, fueling a vast speculative bubble, which sucks investment out of the rest of the economy. It’s no wonder net investment in the British economy is, according to the economist John Mills, effectively zero.
And third, we need to think about how this gradually dawning economic reality interacts with our politics: not through the obvious corruption of direct bribery, but through revolving doorsbetween government and civil service, through old boys’ networks and friendship groups, through perfectly legal election donations and media dominance, which all combine and operate to cement the role of finance as Britain’s most important industry.
It was not so long ago — within my grandparents’ lifetime — that Britain was at the center of the biggest empire in human history. Many observers have considered the present day, understandably, as the post-imperial era, placing the end date of empire somewhere around the time Britain withdrew from South Asia. But perhaps we got ahead of ourselves — perhaps we’re only just now seeing the final stages, the physical empire replaced with a hidden financial one. And perhaps the Panama Papers will be seen as the moment when this empire, too, finally began to come unstuck.

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