“A Theatre Of Probity”

Apr 12 2011 @ 8:46am

David Runciman reviews Nicholas Shaxson's Treasure Islands: Tax Havens and the Men who Stole the World:

The essence of offshore is the need to keep up a solid appearance of respectability, while allowing money in and out with as little fuss as possible. Tax avoidance (unlike tax evasion) is not a clandestine activity, and tax havens don’t exist just to enable people to squirrel their money away from the authorities. The money needs to be accessible, and it needs to be liquid. For that reason, people prefer tax havens where they can conduct their business relatively openly, and the most successful offshore jurisdictions are the ones that ask no questions but also tell no lies. 

Shaxson's memorable phrase for this is ‘theatre of probity’. The Swiss have always been the masters, with their formal manners and careful paperwork. But it turns out that the other champions of this way of doing business are the British. Shaxson’s book explains how and why London became the centre of what he calls a ‘spider’s web’ of offshore activities (and in the process such a comfortable home for the likes of Saif Gaddafi). It is because offshore is the offshoot of an empire in decline. It perfectly suited a country with the appearance of grandeur and traditionally high standards, but underneath it all a reek of desperation and the pressing need for more cash. 

That last sentence is brutal. And, of course, true.