By Jamie Pitman
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Treasure Islands

This article is over 11 years, 4 months old
Nicholas Shaxson
Issue 357

Treasure Islands: Tax Havens and the Men who Stole the World should become a new subgenre within mainstream economic literature. At first glance, Nicholas Shaxson’s work could be shelved alongside other reformed capitalists – such as Paul Krugman, George Soros and Joseph Stiglitz – who write about their anti-capitalist epiphanies while remaining unmoved by the possibility of an alternative. In other words, writers who still manage to find some hope for the system on which they have just performed a 500-page demolition job. Often this “hope” is prescriptive – more regulation, less regulation, dig up John Maynard Keynes, search the Jedi toolkit for a mystical third way, etc. With this in mind, I admit to starting the book with some sense of resignation.

Happily, my feelings were not entirely justified. For a start, Treasure Islands turned out to be very entertaining. As Tax Research UK’s Richard Murphy says on the book’s jacket, “It reads like a thriller” – which is perhaps less surprising when you consider that the first places that spring to mind when somebody says “tax haven” are the sort of exotic locales we normally associate with James Bond films – the Bahamas, Barbados and Bermuda, for example (and that’s just the Bs). This leads us on to one of Shaxson’s fundamental points, namely that such islands are actually on the periphery of the global trade in tax avoidance and provide a palm-fringed distraction from the real centres of scandal – namely New York and London.

It is at this point that Treasure Islands differentiates itself from the justified but narrow International Monetary Fund and World Bank bashing of the previously mentioned authors. Instead Shaxson’s focus on a virulently corrupt and uneven tax system provides socialists with more proof of a system rotten to its very core. George Monbiot summarised the book thus: “[After] reading Treasure Islands I have realised that injustice…is no perversion of the system; it is the system.”

Importantly for a mainstream book, little space is left for readers to draw anything other than a Marxist conclusion (even if the author himself manages to avoid it). The primacy of the economic base is continually revealed in the book’s historical sweep that entangles Columbian cocaine barons with Tory peers, and the Mafia with the Bank of England, and uncovers Nazi gold nestled next to establishment money in Swiss bank accounts. Consequently, much of the hypocrisy that occurs within the superstructure is simultaneously demolished. State rhetoric about curbing the banks’ “greed culture” is hollowed out by many of Shaxson’s accounts of political compliance with capital (while Tony Benn gets a favourable mention, Tony Blair appears complicit in the “offshoring” of Nigerian oil money).

While Shaxson succeeds in convincing the reader (not to mention Monbiot) that these injustices are systemic, he himself remains unconvinced – rather impotently concluding with an argument for building a more flexible regulatory framework. It is here that you might argue that Shaxson should re-read his own work.

Any Keynesian alternative would rely upon keeping capital within national boundaries as much as possible – anathema to the nature of the world economic system. Similarly, undiluted neoliberalism is also undermined by the tax havens – how can you sustain the argument that fluctuating prices contain embedded signals giving everybody access to the same information when much of the market is shrouded in impenetrable secrecy? Amazingly, you can be sent to prison in the Caymans for even asking about somebody’s financial affairs.

This book can provide those willing to look outside the present system with some powerful arguments, as it strikes me that the case for tightening tax laws over the elites is, currently at least, doomed. Such an attack on the undeserving rich would trigger a clamour throughout the tax havens to deregulate even more (and more again – as they remain tied into competition with one another). And who would enforce these laws – the very class of people who often benefit from them? Shaxson recounts how Barack Obama complained about a building in the Caymans which houses over 12,000 corporations – to which a Cayman bank representative pointed him in the direction of a building in Delaware that contains 217,000.

At which point we return to Monbiot’s assertion that injustice is no perversion of the system – it is the system. Surely then, the only coherent answer must be to overthrow this system and rebuild a more humane successor. It is this conviction that prevents Marxists from misguidedly reaching for reformist alternatives such as those proposed by Shaxson.

However, there are still important points to be taken from this entertaining book, which can then be reformulated into an argument for revolution – perhaps at the next UK Uncut protest you attend or even to Shaxson himself, should you ever meet him.

Treasure Islands is published by Bodley Head, £14.99

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