Does every media editor on earth have an offshore tax haven account they’d rather not talk about in Geurnsey? Isle of Man? Grand Cayman? Or are they terrified of looking like one of those Bildeberg Illuminati conspiracy nuts if they say “boo”? That’s really the only explanation I can conceive for the total silence on the gaping black hole in the middle of Brexit, and the entire world economy, the Corporation of the City of London.
Average folks think of Swiss bank accounts as the big culprit of tax haven globalization. Ha. If you want to know where the lion’s share of the middle class’s money went for the past 40-75 years, every ill gotten penny, every fraudulent scheme sucking the wealth of nations into a collapsing star, it’s Death Star is the offshore accounts all over the world whose legal jurisdiction rests in the Corporation of the City of London. The last remaining spider web of the British Empire’s global sovereignty, the City (pointedly, not the British Parliament), through the Empire’s historical vastness, presides over tens of trillions of untaxed dollars, perhaps equalling the size of the entire world economy. The Panama Papers, voluminous as they may be, are barely a pin prick into the labyrinth. Brexit does nothing to that jurisdiction, or those trillions, left safely frolicking in the City-based offshore like ticking time bombs of global financial risk.
Brexit doesn’t touch The City, because no international agreement has ever touched The City, whether you call it The Square Mile, or the British Wall Street, or more appropriately, the Corporation. A medieval jurisdiction whose unknown origin predates William the Conqueror, The City is “governed” by an impenetrable Escher drawing of Worshipful Whatnots whose titles date back centuries. New Labour’s drooling neoliberalism merely made The City more impenetrable, Tony Blair gifting the City ever more global corporate power and independence from the slightest touch of London local government.
The hand wringing commentary on the City post-Brexit about all the financial jobs supposedly leaving London in favor of mainland Europe is profoundly false, and blind to history. Before Britain even joined the EU, the City blatantly ignored the post-war Bretton Woods framework for international capital to create the eurodollar market in the mid 1950’s – non-US banks accepting deposits in dollars. In international scholarship, Eurodollars are the consensus big bang moment of the post-war City-based offshore. London property values post-Brexit will remain inflated due to the obscene amounts of London real estate registered in the City based offshore. In fact, thanks to the severing of the EU relationship, post-Brexit there is actually an incentive for Europeans to come to London, not the other way round. At a minimum, Brexit will likely lead to more offshore ownership in London, not less.
Brexit did nothing to address this decades long boiling global financial risk in the beating heart of London. To the City, the EU is very much a Johnny Come Lately to the neoliberal free market party, and Brexit leaves the swirling offshore toilet very much intact. British voters thought the EU was causing the giant sucking sound of their futures disappearing. Their media didn’t help, and still won’t.