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Treasure Islands by Nicholas Shaxson

Of course no non-fiction book these days is published without a subtitle; this one is Treasure Islands: Tax Havens and the Men Who Stole the World.

It is a book with a particular argument to make, that tax havens are a Bad Thing. And it does a good job of making it engaging and readable, considering that it is, in the end, a book about international tax law and accountancy practices. It traces the historical development of the current system and illustrates it with plenty of colourful anecdotes about individuals along the way to keep it interesting.

Among the notable points it makes:

Tax avoidance is just one part of the problem. Offshore jurisdictions also allow businesses to avoid regulations and other legal obligations. And perhaps most significant, they provide layers of secrecy.

And of course it’s not just multinational businesses and wealthy individuals that benefit: it is also central to the workings of organised crime and government corruption. The secrecy in particular allows huge amounts of money to flow out of the developing world via the bank accounts of corrupt officials — amounts of money which apparently completely dwarf the aid moving in the other direction.

Not all of these jurisdictions are literally ‘offshore’. There is a single building in Delaware which is officially the corporate headquarters of 217,000 businesses, including Ford, GM, Coca-Cola, Google and so on. In the case of Delaware, the appeal is the very corporate-friendly legal environment. The City of London and Manhattan have also worked hard to turn themselves into tax havens in their own right.

The City of London is central to all this — it’s not a coincidence that so many of the key tax havens are parts of the old British empire: Jersey, Guernsey, the Caymans, the Turks and Caicos, Hong Kong, Singapore and so on. And the Bank of England, which I always thought of as a rather staid, conservative body whose main concern was economic simplicity, turns out to have been the most significant lobbying arm of the the City to the British government.

Interesting stuff, generally. The only reservation is that this is a very one-sided account about a subject I know nothing about, so I can’t easily assess how fair or accurate it is. And there are times it suffers from when-your-only-tool-is-a-hammer-everything-looks-like-a-nail syndrome; suggesting that financial secrecy doesn’t just contribute to but more or less causes ALL the world’s problems.  You get the feeling that if you asked him why your soufflés kept collapsing, he would say it was because of the laxness of trust law in the Cayman Islands.

Nonetheless, he does make a pretty convincing case that lack of financial transparency is an important contributor to many of the world’s problems; it may not cause them, but it certainly enables them.

» As seen on Google street view, that is 1209 North Orange St, Wilmington, Delaware. The legal home of 217,000 companies, including Google itself.

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Decline & Fall by Chris Mullin

Decline & Fall is the second volume of Mullin’s diaries, which I bought on a whim to read on my phone without having read the first volume. The first volume was about life as a junior minister in Tony Blair’s government; this one starts with him being sacked after the 2005 election, and so is about being a backbench MP in the last five years of the Blair/Brown government.

It probably would have made more sense to read the first volume first, but I enjoyed this anyway; because he never had a senior job in government, he’s just enough of an outsider to provide a clear-eyed account of life in the Westminster bubble. I might have to read the first volume, now.

And, incidentally, the fact it’s a diary made it well suited to reading on a small screen. Short entries mean you can easily dip in and out of it.

» The picture is of a design for fabric for a roller blind for the Houses of Parliament by Augustus Pugin, from the V&A.

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Egypt, Libya, foreign policy and honesty

I have been following events in north Africa closely, both via the usual media outlets and Twitter (see, for example, Andy Carvin’s one-man newswire for all the latest rumours swirling around). But I haven’t said much about it on this blog because, well, it’s a complicated subject of which I am ignorant.

It has often been enthralling, even so. The spread of protests from country to country, the ebb and flow between protestors and their governments: at times like this, live round-the-clock news coverage actually makes sense. Egypt had almost the perfect revolution for a spectator; large photogenic crowds, plenty of reporters on the scene, a hint of euphoria, a frisson of danger to add some spice, and not, in the end, too many casualties. Libya has been a darker experience; the more brutal response by the regime and the effective news blackout just producing a swirl of horrifying but unconfirmed rumours swirling around on Twitter.

There have already been some extraordinary moments, like the Wael Ghonim interview,or the incredible celebrations in Tahrir Square after Hosni Mubarak’s resignation. Or last night’s speech from Saif Gaddafi, which was so weirdly rambling and unfocussed that the conspiracy theory, that he was just buying time for his father to flee the country, almost seems like a plausible explanation.

And it has been making me think about the way we talk about foreign policy. Because when a popular revolution peacefully overthrows the dictator of a brutal autocratic police state with a habit of torturing its own citizens, it would be nice to be on the side of the protesters. Which makes it slightly awkward that our governments have spent decades supporting the dictator. And it’s not just Hosni Mubarak; it’s Bahrain, it’s Saudi Arabia; even Gaddafi had managed to rebrand himself from mortal enemy of the West to someone we can do business with. And there’s the awkward fact that we supported Saddam Hussein until it stopped being convenient. At least we can say we definitely don’t support the Iranian theocracy… but then that did come into being after a popular revolution against a brutal dictator who, almost inevitably, was someone we did support.

The deeply murky nature of our foreign policy is hardly news, of course. What I find so frustrating is the way that we talk about it, the way that governments feel the need to gloss over all the unpleasant details right up until the moment when the regime falls, and we are shocked, shocked to discover that Hosni Mubarak was a revolting dictator all along.

It would just be refreshing sometimes to hear a politician stand up explicitly spell out the logic:

Yes, we know that in supporting Hosni Mubarak we are propping up a brutal police state. But look around at the other countries in the region: Sudan has had decades of civil war and genocide. Eritrea and Ethiopia have been at war. Somalia is a failed state. Libya and Iran are even more repressive states and supporters of terrorism. Yemen serves as a base for Al-Qaeda. And so on. So we take the position, on balance, that supporting a nasty dictator is a reasonable trade-off for decades of stability and no war with Israel.

Because that argument may be right or wrong, but I don’t think it’s stupid. I don’t think it’s even outrageously cynical. Because foreign policy is a fairly blunt instrument. Mubarak’s regime might not have been our ideal choice for the kind of government Egypt should have, but then we don’t really get to choose. We certainly don’t get to control the internal policies of the country; all we can do, presumably, is to look at the government in place, weigh up the possible alternatives, and decide to support them or not.

Of course it’s a bit more nuanced than that — there are different degrees of support, there are various pressures we can apply — but short of invading, which is hardly a panacea, we’re pretty limited in what we can do. Foreign policy has to be deeply pragmatic because the range of choices is so limited.

I’m not suggesting that foreign policy has to be horribly cynical, although it clearly often is. It’s just difficult. Even if you don’t allow self-interest to trump human rights. Even if your only concern was the well-being of the people of north Africa and the middle east, you’d still probably end up supporting a few dictators. But it would just be nice if politicians would be a bit more open about it, a bit more explicit about the bargains they are making. A bit less diplomatic, in fact.

» Demonstrators Praying and Riot Police and People Should Not Be Afraid of Their Governments, Governments Should Be Afraid of Their People are © Ramy Raoof and used under a CC by licence. The shot of protestors in Tahrir Square in from Al-Jazeera.

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Yes to AV.

Just a quick pointer to a couple of my blog posts from last year’s election: ‘First Past The Post makes politicians lie to us’. And the follow-up: ‘FPTP makes politicians lie to us (hypocrisy update)’.

I would actually favour some kind of proportional representation — this one seems quite ingenious — but at least AV would be an improvement, because it would, I think, effectively get rid of tactical voting.

Serious political geeks will explain that tactical voting is technically possible in an AV system; but it’s much more complicated. It’s quite difficult even to explain how it works. Unlike FPTP. In a FPTP election with more than two candidates, tactical voting is so completely obviously part of the system that people don’t even have to think of it as tactical: there is an obvious and clear incentive to vote for a less-favoured candidate who seems to have more chance of winning.

Under AV on the other hand, anyone who wants to do tactical voting is going to have to do detailed research into voting patterns in their constituency and some careful mathematical analysis of different possible outcomes in order to work out how to maximise the effect of their vote. I don’t think many people will do that, and if they do, well, good luck to them.

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Egypt joke

A joke I heard a few years ago, can’t remember where:

Three agents are drinking in a bar, from the CIA, Mossad and the Egyptian secret police. After a few beers, they all start boasting about their tracking skills, and have a bet to see who can be quickest to head out into the desert and bring back a live gazelle.

The Mossad agent is fastest, and within a few hours he’s back at the bar with a gazelle tied up in the back of his truck. An hour or two later, the CIA man turns up as well. But many hours pass and eventually they head off and look for the Egyptian secret policeman.

They find him around the corner with a big stick, thrashing a donkey and shouting: “Come on, just admit it, I know you’re a gazelle!”

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More thinking about Wikileaks

One interesting thing I’ve noticed since Wikileaks exploded out of its relative obscurity: I keep finding myself of things which I wish someone would leak to them.

So, after FIFA awarded the World Cup to Russia and Qatar in what is widely asumed to be a more-or-less bent bidding process, I thought ‘there must be someone who has some dirt on Sepp Blatter and the FIFA organising committee, someone who knows where the bodies are buried… be nice if they leaked that to Wikileaks’. And today, when we learn that no charges will be brought following a probe into phone hacking at the News of the World, I thought ‘those nasty fucks have got away with it again… there must be someone who has the evidence that Andy Coulson knew what his reporters were doing and could send it to Wikileaks’.

Because the powerful have so many ways of suppressing information, the simple idea of an avenue for people to anonymously release information is rather intoxicating. And the higher-profile Wikileaks becomes, the more likely it will be that individuals within organisations like FIFA, or the News of the World, or the Metropolitan Police, will feel able to get that information out.

Interesting times.