Treasure Islands - Nicholas Shaxson [53]
The Corporation of London is a municipal authority for fewer than nine thousand souls and its job is, officially, to promote financial freedom and liberalization around the world. In partnership with the Bank of England, it is one of the most powerful players in global financial regulation today. And almost nobody has noticed it.
Political theorists have had great difficulty even seeing the Corporation of London, let alone appreciating its significance. With its politics of personal proximity, its bonds of shared identity and principle, and its elaborate ceremonials, the City manages to be at once vastly powerful and barely visible. It fits into no modern analytical framework. Mainstream modern publications about the City gloss over its free-floating status.72 Globalization has led to whole fields of research into the actions and interactions of companies in markets, but they usually only discuss political institutions on an abstract level. Students of the philosopher John Rawls have focused on the social compact—the relationship between rulers and ruled—but have paid relatively little reference to the role of institutions or history. Even Marxists, primed not to worry much about how financial capital organizes itself, have considered the City in the context of a clash between manufacturing capital and financial capital, misunderstanding its true role. The City is, as Glasman puts it, “an ancient and very small intimate relational institution, which doesn’t fit into anybody’s preconceived paradigm of modernity. Here is a medieval commune representing capital. It just does not compute.”73
And it was here in the City, just as Britain’s imperial dreams collapsed in the ignominy of the Suez retreat, that the financial establishment in London began piecing together the means by which London would restore its position as the capital of a world ruled in the interests of an elite of financial investors. At the moment of its apparent destruction, the British empire had begun to reinvent itself, back from the dead.
5
CONSTRUCTION OF A SPIDERWEB
How Britain Built a New Overseas Empire
AS U.S. BANKS ENJOYED THE DELIGHTS OF LONDON’S unregulated markets from the late 1950s and 1960s, the City of London began to see more clearly how the partnership might be expanded more deliberately at a global level. I have already hinted at how the City began to use offshore centers around the world as nodes in a spiderweb, which would catch passing capital by getting rid of taxes and rules and regulations and providing safe, secretive new bolt holes for the world’s wealthy, and then send much of the business up to the City. Criminal money, far enough distanced from Britain itself to minimize the stink, would be turned to profit, and other money would accompany it. Meanwhile, the more that countries around the world deregulated and opened their economies to international capital, the more business would be flying around, and the more would come their way. Now I will explore the untold story of how it happened.
As I’ve noted, when Britain’s formal empire collapsed, it did not entirely disappear. Fourteen small island states decided not to become independent and became instead Britain’s Overseas Territories, with Britain’s Queen as their head of state. It is a status that has been preserved until today. Exactly half of them—Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat, and the Turks and Caicos Islands—are tax havens, actively supported and managed from Britain and intimately linked with the City of London. Accompanying these were the Crown Dependencies near the British mainland—Jersey and Guernsey, in the English Channel off the French coast; the Isle of Man, near the Irish republic; as well as a scattering of other territories—Hong Kong as a gateway to China, still under British control, and a variety of ex-colonial