How Offshore Tax Havens Enslave the World

The Spider’s Web: Britain’s Second Empire

Directed by Michael Oswald (2017)

Film Review

The Spider’s Web is about the network of secret offshore tax havens that has allowed Britain to financially enslave much of the Third World. The film begins by describing the special status of the City of London corporation, a special enclave within greater London that services as Britain’s financial district.

The City of London has a private police force and private courts, Unable to conquer this area of London during the 1066 invasion, William the Conqueror negotiated a treaty making it virtually self-governing.

After an attack on the British pound during and after the 1956 Suez Crisis (see Suez: Britain’s Illegal War Against Egypt), the British government implemented two important measures to stem the hemorrhage of pounds overseas: 1) it temporarily restricted foreign investment and 2) it created a City of London eurodollar market to accept foreign investments in US dollars.

Keen to escape US regulation, US banks flocked to set up international operations in London. At the same time, City of London bankers augmented their eurodollar market by drafting secret and illegal regulations to make the Cayman Islands (still a British colony) a secret haven for tax evasion and money launderers.

Eagerly creating similar offshore havens in Bermuda, Virgin Islands, Jersey and other colonies, by 1997 City of London banks controlled 90% of all international loans via their eurodollar market. The filmmakers blame the creation of this vast offshore banking network for the “financialization” of both the US and UK economies (ie the decision by US/UK banks in the mid-seventies by major US/UK banks  to invest in financial instruments rather than manufacturing).

Africa is the region most heavily exploited by this illegal financial network. Between 1970 and 2008, African elites in cahoots with multinational corporations moved $944 billion in oil, gold, diamond and rare earth revenues into offshore tax havens. This was five times the amount of global debt ($177 billion) Africa owed in 2008.

The most interesting part of the film is an interview with former Chase Manhattan economist Michael Hudson about the State Department approaching him in 1967 for his help setting up a US offshore tax haven to stem the flow of US dollars overseas for Vietnam-related military expenditures.

The Coming Collapse

Surviving Progress

Harold Crooks and Mathieu Roy (2011)

Film Review

Surviving Progress is based on Canadian Ronald Wright’s 2004 book A Short History of Progress and takes up where the book leaves off. The book’s main focus is the collapse of historic civilizations due to dangerous technological innovation. It introduces the term (originally coined by German economist Walter Kramer) “progress trap,” to designate technological innovations that have dangerous and unforeseen unintended consequences. An example used in both the book and the film is the case of the wooly mammoth – how new Stone Age techniques that vastly improved efficiency caused the species to become extinct.

The film, in contrast, focuses on our present “progress trap,” and the biological determinants that cause civilizations to produce progress traps. It features a broad range of experts in addition to Wright, including psychologists, geneticists, primatologist Jane Goodell, environmentalist David Suzuki, economist Michael Hudson and astrophysicist Stephen Hawking.

The filmmakers start from the premise that humanity has entered a final progress trap. In the past when civilizations collapsed, homo sapiens simply moved on and started new ones somewhere else. Our present civilization covers the entire planet, and this is no longer possible. The technologies we’ve devised over 200 years have become so ecologically destructive the coming collapse could easily spell the extinction of our species.

The case the Stephen Hawking, the psychologists, geneticists put forward is that our Stone Age brains are incapable of dealing appropriately with advanced technology – that the only conceivable way to prevent collapse is through some kind of human genetic engineering. I have a major problem with any hypothesis that blames the failure of capitalist civilization on human nature. In my experience, it’s not human nature that makes people into greedy, individualistic sociopaths, but an economic system that rewards people for being greedy and competitive and punishes them for being compassionate.

I also had a problem with the way the filmmakers left out half of humanity by designating male competitive behaviors as typical of the entire human species. As geneticist Bryan Sykes argue in Adam’s Curse, the Stone Age reptilian traits described in the documentary are extremely rare in human females (and most males for that matter). In fact, it’s extremely rare for women to commit violent crimes, become tyrants or start wars. (I will post a review of Adam’s Curse later in the week).

I found economist Michael Hudson’s contributions far more valuable. He talks about the role oligarchy, extreme inequality and ecological destruction in causing past civilizations to collapse. He gives the example of Rome, in which confiscation of public land by aristocrats led to rapid overgrazing and topsoil depletion. Two hundred years later Rome collapsed, owing to their inability to feed their empire.

Nobel Prize for Walmart


wall street

Guest blog by Steven Miller

(This is the second of 6 guest posts by Steven Miller describing the financialization of capitalism and the takeover of the global economy by bankster speculators)

Speculators – Part II

Today the financial industry makes far more profit than any other sector of capitalist production. In 1973, they made 16% of total US profits; by 2007, financial profits reached 41% of all profits. (2) Since credit and debt control the levers of the economy, the financial industry has become politically dominant. The planning function of government increasingly devolves to their control. Finance – producing money from money – produces no value; it simply moves money around, but it does centralize even more wealth in the hands of speculators.

Once Wall Street speculators realized, after the 2008 Crash, that their new “financial instruments” were actually weapons of economic mass destruction, they understood that these tools could be employed to attack national and public wealth. Speculators get richer by seizing your wealth.

They do this today with hedge funds, among other things, which are completely private, completely unregulated and completely hidden from the public. But you can make wild speculative bets with their expert staff. Because they are “private”, we are supposed to accept whatever negative effects they have on society. Though the results are highly destructive to society, this is not up for debate.

Today the financial industry in the US is sitting on the largest mountain of cash in human history, over $2 trillion. Why? This is perceived as strange behavior, since they received over $16 trillion in the 2008/9 Bailout. In addition, the US government for at least two years has been dutifully sending them $85 billion a month, over a trillion dollars a year, in free money. (3)

So why don’t they spend it?

Every modern industry, especially finance, is based on extending credit; the debt is then “leveraged” to takeover companies and engage in various forms of speculation. As financial companies began to collapse in 2008, every one that was “solvent” lied and minimized how much of their holdings were based on toxic assets. Since each one knew that the others were also lying, they began to curtail how much credit they would extend. Without credit, modern capitalist commerce was on the verge of collapse. This is why the form of the Bailout was for the government to buy up toxic assets. This situation still prevails today.

Michel Chussodovsky, professor of economics at the University of Ottawa, and organizer of the Center for Global Research describes how this was rigged:

In a bitter irony, while the Wall Street institutions were the recipients of the bailouts, they are also the creditors of the federal government, which has been precipitated into a structure of debt financing controlled by Wall Street. This deficit financing… is controlled by the creditors. It does not create employment. It is not expansionary.” (4)

This reality illuminates the dangerous instability of the times. In essence, the public is financing its own indebtedness and funding its own privatization. The banks collapsed the economy in 2008 because they had been counting their various toxic assets as part of their wealth. Money is now generated, loaned and invested by clicking a computer keyboard. The monthly $85 billion gift, of course, is not put into gold bars and moved into the bank vaults by elves. The financial industry uses public money to offer increasingly shady loans, essentially organized criminal activity against the public.

Every day the value of one-year’s GDP in the US – about $14 trillion  – passes through Wall Street and other financial institutions! This is the Casino Economy. Most of this vast wealth is put into play as speculative bets, driven by computer-driven programs, on anything from water to debt to fracking. Just like mortgages, anything that can be financialized – entire electrical grids, school districts, pensions, and medical credit – almost anything at all – can also be securitized and bundled as fodder for speculation.

It is important to recognize that none of these vast transactions are taxed at all. Real people pay a large sales tax on almost everything in the US; corporate people pay ZERO on their schemes to increase their great wealth. A simple tax of 2 cents on the dollar would generate $28 billion a day, enough revenue to solve every financial issue that America faces.

Numerous people have proposed this idea, since it would end Austerity and usher in an era where governments could provide incredible resources to real people for free. The fact that this “reform” will never be permitted is a telling sign of a system that is approaching its demise.

The immediate result of the Crash was that the banks, hedge funds, insurance companies, private equity firms, real estate interests, etc. simply reprogrammed their computers to speculate on food and petroleum. Hence the mega-jump in food prices in the Fall of 2008. But money that doesn’t circulate produces no profit, so the financial industry has begun to invest in solid, material assets, tangible properties that cannot be wiped out with a click of a keyboard. Meta-money is the cousin of the NSA’s meta-data. Its use by corporations is equally malign.

Thus today we are in the midst of a tsunami of privatization, as the banksters are seizing and privatizing everything they can get their hands on. They are seizing public assets and a rate never before seen. Everything is financialized – given a monetary rating; then it is securitized – turned into speculative assets, which are quickly privatized; then your access to it without money is eliminated and thus criminalized. (5)

This trend has been noted by a number of observers:

Michael Hudson, professor of economics, University of Missouri Kansas City,:

This financial engineering is not your typical bubble. The key to the post-2000 bubble was real estate. It is true that the past year and a half has seen some recovery in property prices for residential and commercial property. But something remarkable has occurred. This new debt-strapped low-interest environment has seen Hedge funds and buyout funds doing something that has not been seen in nearly a century: They are buying up property with cash, starting with the inventory of foreclosed properties that banks are selling off at distress prices.” (6)

Ellen Brown, Web of Debt Blog:

Giant bank holding companies now own airports, toll roads, and ports; control power plants; and store and hoard vast quantities of commodities of all sorts. They are systematically buying up or gaining control of the essential lifelines of the economy.”  (7)

Michel Chussodovsky again:

The privatization of public monuments, museums, national parks, the post office, etc., has been raised in recent media reports as a possible ‘solution’ to the debt crisis. But let us not be misled: the process of acquisition of federal public property including the infrastructure and State institutions is likely to go much further. The public sector is up for grabs. Wall Street will eventually go on a buying spree picking up State owned assets at rock bottom prices.” (8)

References and Resources

 2)  Dave McNally, Global Slump, 2011. P 86

 3)  Harding. “Bernanke takes plunge with QE3.”

4)      Chussodovsky. “The Shutdown of the US Government  and ‘Debt Default’. A dress Rehearsal for the Federal State System?”. Center for Global Research

5)       5)  “Debt As a Class Weapon”. Rally Comrades, October 2011

 6)  Michael Hudson. “The Bubble Economy as a 2 Part Play for Privatisation”. July 4, 2013

 7) Ellen Brown. “The Leveraged Buy-out of America.” Center for Global Research, August 26, 2011

 8)  Chussodovsky. Op sit

photo credit: nromagna via photopin cc

To be continued.


Steven Miller has taught science for 25 years in Oakland’s Flatland high schools. He has been actively engaged in public school reform since the early 1990s. When the state seized control of Oakland public schools in 2003, they immediately implemented policies of corporatization and privatization that are advocated by the Broad Institute. Since that time Steve has written extensively against the privatization of public education, water and other public resources. You can email him at

Originally posted at Daily Censored