Warren Buffett recently maintained: “There is class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” I describe here how this rich class is indeed waging class war through the striking new strategy of going offshore (Urry, 2014). [1]

It had been thought, especially in the 1990s, that the massive ratcheting up of movements of money, people, ideas, images, information and objects was economically, politically, and culturally beneficial. Most aspects of contemporary societies were believed to be positively transformed through increased cosmopolitanism and borderlessness. But the 1990s were not the harbinger of an optimistic and borderless future. Migrating across borders are not just consumer goods and new services, but terrorists, environmental risks, trafficked women, drug runners, international criminals, outsourced work, slave traders, asylum seekers, property speculators, smuggled workers, waste, financial risks, and untaxed income.

There are many ‘secret worlds’ of offshored manufacturing work, waste, energy, torture, pleasure, CO2 emissions, property ownership, and taxation. Offshoring involves moving resources, practices, peoples and monies from one territory to another, hiding them within secret jurisdictions. Offshoring involves evading rules, laws, taxes, regulations or norms. It is all about getting around rules in ways that are illegal, or going against the spirit of the law, or using laws in one jurisdiction to undermine laws in another. Offshore worlds are often based upon secrets and lies.

Offshore worlds have been made possible by the development of new sociotechnical mobility systems, of container-based cargo shipping; aeromobility; the internet and virtual worlds; car and lorry traffic; electronic money transfer systems; the growth of taxation, legal and financial expertise oriented to avoiding national regulations; and the proliferation of ‘mobile lives’.

The offshoring world is dynamic, reorganising economic, social, political and material relations between societies and within them, and more and more resources, practices, peoples and monies are made or kept secret. The global order is the opposite of a simply open world – it is one of concealment, of many secret gardens mainly designed by and for the rich class and its casual patterns of migration.

Since the rise of neoliberalism in the later 1980s there has been an astonishing growth in the movement of finance and wealth to and through the world’s 60 to 70 tax havens, which entail one-quarter of contemporary societies. These tax havens, or ‘treasure islands’, include Switzerland, Jersey, Manhattan, the Cayman Islands, Monaco, Panama, Dubai, Liechtenstein, Singapore, Hong Kong, Gibraltar, the City of London, and Delaware. The development of ‘secrecy jurisdictions’ are core to the neoliberalisation of the world economy from around 1980, and the ending of many exchange controls. To be offshore is to be in paradise, contrasted with the high-state, high-tax life experienced onshore. Tax havens are places of escape and freedom, a paradise of low excises, wealth management, deregulation, secrecy, and often nice beaches.

This rich class is the beneficiary. Almost all major companies have offshore accounts/subsidiaries, more than half of world trade passes through them, almost all high net worth individuals possess offshore accounts enabling tax ‘planning’, and 99 of Europe’s 100 largest companies use offshore subsidiaries. As a consequence, one-quarter to one-third of all global wealth is held ‘offshore’. Offshored money has grown from US$11 billion in 1968 to US$21 trillion in 2010, or a sum equivalent to the combined GDPs of the United States and Japan, about one-third of annual world income. Fewer than 10 million people currently own this offshore fortune. This is the source of power and wealth of the super rich who almost all owe their fortunes, in part at least, to the rapid and secret moving of money and ownership.

Offshore is how the world of power now works. Money staying onshore is almost the exception, suitable only for the ‘little people’ still paying tax. Most big money is offshored. Nicholas Shaxson describes how the US is by far the world’s most important ‘secrecy jurisdiction’ (2012). In the diminutive state of Delaware there is a single building which houses 217,000 companies, the largest and most (fiscally speaking) unethical building in the world. The annual loss of taxation is hundreds of billions of US dollars. The offshore world makes it hard for small and medium-sized companies to compete, as revealed by protestors, NGOs and charities who increasingly engage in ‘tax shaming’.

One commentator reports how, for billionaires, ‘you don’t live anywhere, and neither does your money’ Meek, 2006). Place, property and power are intertwined in forming and sustaining such a networked rich class: homes dotted throughout the world, first class travel, private schools, family life structured around episodic get-togethers, private leisure clubs, airport lounges, private jets, luxury destinations, and places of distinction for encountering other super rich and extending one’s ‘network capital’.

Central to these offshore worlds is water. Seven billion humans are crowded onto one-quarter of the earth’s surface. Almost all the ocean world is out of sight. The oceans contain many unregulated ‘treasure islands’; ships sail oceans flying flags of convenience, with conditions of work driven to the bottom; many poor migrants lose their lives in oceans; oceans are a global rubbish dump with the ‘Great Pacific Garbage Patch’ twice the size of France. The sea is a neoliberal paradise for the rich class, a vision of the world almost without government, taxes and laws, and where only the powerful ships and their companies survive, with the rest often literally sinking to the bottom. The outlaw sea also subjects humans to heightened unruliness: more intense storms, hurricanes, tsunamis, rising sea levels and flooding.

The social sciences neglect these offshore worlds at their peril. Can what has escaped offshore ever be reshored? Offshoring and the associated lack of transparency is bad for democracy, and for the possibility of societies moving towards a low carbon future.

Notes

[1] See http://www.morphstudio.co.uk/work/offshoring/ for a short video on offshoring.

References

Meek, J. (2006) ‘Super Rich’, The Guardian (17 April).

Shaxson, N. (2012) Treasure Islands: Tax Havens and the Men who Stole the World, London: Vintage.

Urry, J. (2014) Offshoring, London: Polity.

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