The government frequently says that it cannot change the law in the UK’s Crown Dependencies and Overseas Territories as they are independent jurisdictions. As a result it pretends there is nothing we can do about the fact that they are tax havens.

This is not true. Start with the names. They are ‘dependencies’ and ‘British overseas territories’. Internationally, they are ours. We are responsible for them.

And as a matter of fact note that as a result the world thinks, and the law accepts, that we are responsible for their foreign affairs. And since offshore is, by definition, all about foreign affairs because it records transactions that do not have their economic impact in the place that records the event then the offshore tax laws of all these places are wholly within the UK’s responsibility and legislative remit.

Yes, let’s return to our colonial ways! You, bastard grotty foreigners that you are, will simply have to do what we whities say you must.

Interestingly, great uncle was a colonial governor: over the years of Gilbert and Ellice, Montserrat, Anguilla, Turks and Caicos…..and the balancing act was to make sure that that colonialism diminished rather than increased.

There is, inevitably, an urgent call for actions being made on tax havens. One way to tackle their abuse is to impose capital controls on money flows to and from them. This is something I called for in Chapter 18 of The Courageous State. I wrote there:

The measures suggested in this chapter are forms of capital control: they are intended to make sure that capital is accountable wherever it is. This is essential if the inevitable increase in the rate of return to capital that has been a characteristic of the last thirty years, and which has been so harmful to the world economy, is to be corrected. The proportion of the world’s income paid to labour has to increase if people are to have any prospect at all of realising their potential, meeting their needs and even of paying their debts, which in itself makes this a matter of self-interest for capital itself.

Erm, did the rate of return to capital increase? I’m reasonably sure that it didn’t. Rather, that there was an increase in the amount of capital looking for a return which perhaps increased the portion of the economy which flowed to capital but lowered the rate of return to each part of it.

You know, those oceans of cash that companies are sitting upon and earning 0.1% as companies can’t think of how to invest it profitably that Ritchie so complains about?

Not employing more members of the PCS is now corruption:

Failing to provide the resources HMRC needs to tackle tax abuse is in itself a form of corruption

How long before not providing public funding to tax campaigners is corruption?

Linked to your post an interesting pamphlet by Bryan Gould has just been published by the Fabian Society. I’ve got a lot of time for Gould, and it is a crying shame he saw which way the wind was blowing after Blair was elected Labour leader and decided to head off back to New Zealand and a vice-chancellorship of Waikato university

http://www.fabians.org.uk/wp-content/uploads/2016/04/FABJ4254_Bryan_Gould_Ideas_Pamphlet_WEB_03-16-1.pdf

Reply
Richard Murphy says:
April 3 2016 at 11:28 pm
Stewart

He looks like he is borrowed a great deal from me

Because every semi-fascist manque borrows from Ritchie. There being no other proposers of such ideas in the literature.

Simon says:
April 2 2016 at 11:08 am
According to Michael Rowbotham (1), Ricardo stipulated 3 conditions for free trade to create mutual benefit:

1) Capital must not be allowed to cross borders from a high wage to a low wage country
2)trade between participating countries must be balanced
3) Each country must have full employment.

he goes on to say: ‘Since non of these conditions applies anywhere in the modern world, and since nations are all attempting to pursue an imbalance of trade, how can the theory be expected to operate properly?’

Free market fundamentalism is like saying that we have to let the weather wreak havoc and not bother building flood defences, safer housing because the weather is the natural order of things. It’s a denial of human agency.

Reply
Richard Murphy says:
April 2 2016 at 8:45 pm
Agreed

Help me out here. Where did Ricardo say this?

Joan Robinson argued some of those restrictions, but Ricardo?

So let me find a small silver lining if I can. This is that tariffs are back on the agenda, where they belong. The Ricardian ideal that competitive advantage alone should determine who has the commercial right to determine the source of supply for a country, irrespective of national interest, was always flawed and yet whole economic systems – including the EU – have been built upon it.

Ricardo is about comparative advantage, not competitive. Sheesh. The one non-trivial and non-obvious idea in all of economics and our 0.2 of the Professor of International Political Economy doesn’t get it.

But it does, of course, get worse:

The same is true for the movement of capital. Capital comes in all sorts of forms. There is human, emotional, intellectual, environmental, national, personal, corporate and financial capital. We have, perversely, chosen that financial capital shall have almost complete freedom whilst limiting in some way most others. The consequence has been predictable. Just as unfettered migration creates processes of change that can be too difficult to accommodate so too can the unfettered movement of capital be harmful. We have now suffered that free movement for too long and are seeing the consequences.

So, a bunch of Indians come over here, lose £5 billion of their money on a steel business no one else wanted and we’re the people suffering?

The implication is obvious. A policy that favours the movement of capital must also, and simultaneously, constrain that movement to ensure that the common good is achieved.

This is no new departure for me;

No Ritchie, it isn’t. Because what you really want is that Brits cannot take their capital out of the country. That way you can tax it more heavily.

Isn’t it just amazing how so many nominal lefties get all wet at the gusset over the idea of fascist autarky?