Featured White Papers
- Oct. 14th: Simplified IT with Software-as-a-Service (SaaS) (ZDNet)
- PCI DSS therapy for the smaller retailer (McAfee)
- The rise of Web commuting (Citrix Online)
Content provided in partnership with
Out to sea: yes, offshore banking is an outrage. No, it's not a metaphor for capitalism
Washington Monthly, June, 2005 by T.A. Frank
The truth is that Brittain-Catlin's grudge does not really seem to be against offshore financing. He's angry at capitalism, period. The logical question of "So, what are you saying we should do about offshore financing?" is unanswered in the book and, as far as Brittain-Catlin is concerned, unnecessary. "There is little distinction," argues Brittain-Catlin, "between the good and bad use of capital in the global economy." And so there is no answer to the question--at least, not until after the revolution.
Meanwhile, we are left to wonder what on earth to do about offshore banking havens, assuming we're planning on hanging on to capitalism for the time being. After all, such places can sometimes have a function that isn't simply mischievous. Who can blame those Argentines who foresaw possible financial unrest and parked their life savings outside of the country before disaster struck in 2001? Or those businesspeople in countries with poor legal systems and unstable banks who choose to conduct their deals through more reliable offshore institutions? But privacy and economic freedom lose their appeal when they also destroy pension funds here at home or give shelter to tax-dodgers and money-launderers. And even the proudest Cato fellow would surely concede that a banking system such as the one that used to exist on Nauru has no constructive role to play outside of growth industries such as the Russian mafia.
In the end, taming the offshore world depends a lot on how much we want to do it. The OECD, of which the United States is a member, can do a lot to increase pressure on uncooperative places that refuse to open their books. The Cayman Islands are already far more cooperative about working with tax investigators than they were a decade ago. Nauru has effectively been put out of business. True, all these improvements may conceal a much larger problem that severely threatens us all. (If so, there's probably a different, better, book in it.) But, for the time being, I can't help thinking that the trouble is manageable. And it's not because I, too, have a bank account in Nauru.
T. A. Frank is a reporter-researcher at The New Republic.
COPYRIGHT 2005 Washington Monthly Company
COPYRIGHT 2008 Gale, Cengage Learning
