That is one among a collection of posts that may ask what essentially the most pertinent query raised by a distinguished influencer of political financial system might need been, and what the relevance of that query is perhaps at the moment. There’s a record of all posts within the collection on the finish of every entry. The origin of this collection is famous right here.
After the primary two posts on this collection, the matters have been chosen by me, and that is a type of. This collection has been produced utilizing what I describe as directed AI searches to determine positions with which I agree, adopted by last modifying earlier than publication.
That is the third publish in a sub-series right here, the place I acknowledge notable economists who’ve influenced me and who additionally occur to be buddies. This time, the topic is John Christensen, the one-time senior economics adviser to the States of Jersey who went on to co-found and direct the Tax Justice Community within the first decade of this century, during which function I used to be his shut working associate, though nboth of us is now related to the Tax Justice Community.
John and I are shut buddies who speak commonly. Because of this, we’ve drastically influenced one another’s pondering for 1 / 4 of a century.
What not one of the on-line biographies of John clarify is that he’s an expert economist with a number of levels within the topic, specialising in improvement points specifically, and that he was additionally skilled as an auditor earlier than beginning that profession. What in addition they fail to notice is the sacrifice John made to depart Jersey, which was his childhood house, and his profitable profession as a senior civil servant, in order that he would possibly clarify the size of abuse that locations like Jersey have been allowing around the globe when our marketing campaign work started. His tireless work helped change that. The world owes him its thanks, and he rightly deserves a spot right here.
John Christensen has spent a long time illuminating what the world of mainstream economics, for much too lengthy, most popular to not see: that the worldwide monetary system operates by means of an structure of secrecy designed to free the rich from the obligations that bind everybody else. As co-founder of the Tax Justice Community, Christensen mapped the offshore world not as a scattering of unique anomalies, however as a coherent system — a community of secrecy jurisdictions, trusts, shell firms, nominee administrators and permissive regulators certain collectively by one function: to cover wealth from accountability.
His work uncovered how these buildings distort markets, undermine states, and erode democratic energy. For Christensen, the offshore world will not be a side-show; it’s the working system of contemporary capitalism. And since secrecy allows the wealthy to choose out of obligations to the societies that maintain them, it fuels a downward strain on requirements — a worldwide race to the underside during which governments are pitted towards one another for the favour of those that can transfer their cash, however not their duties.
Therefore the John Christensen Query: If the wealthiest actors within the world financial system can cover their cash from scrutiny and duty, how can the race to the underside be averted and democracy survive the facility that secrecy creates?
Secrecy as technique, not accident
John Christensen’s early skilled life in Jersey revealed that secrecy jurisdictions don’t emerge organically. They’re created, nurtured, and defended by highly effective pursuits, typically with the tacit approval of main governments. These jurisdictions present the infrastructure by means of which companies shift income to low-tax zones, high-net-worth people cover belongings, and illicit flows transfer unchallenged.
The intention will not be effectivity, however invisibility. Secrecy detaches wealth from anyplace, legislation, or neighborhood. As soon as wealth might be hidden, obligations might be evaded. And when obligations disappear, so does the premise of democratic equality.
Revenue shifting as systemic abuse
John Christensen argued that revenue shifting will not be “tax planning” however an institutionalised type of financial extraction. Multinationals document income in jurisdictions with no actual financial exercise to keep away from contributing to the international locations the place their staff, infrastructure and customers truly are. This isn’t marginal behaviour — it has grow to be the enterprise mannequin of main world companies.
When companies escape taxation, the general public sector loses important income. The result’s predictable: underfunded providers, greater taxes on odd folks, and the erosion of social cohesion. Christensen insisted that this isn’t technical inefficiency. It’s a coverage failure pushed by the facility of secrecy.
Secrecy as a menace to democracy
John Christensen’s deepest concern was at all times political. Secrecy empowers wealth on the expense of democratic oversight. If the richest can cover their fortunes, they’ll additionally cover their affect — in political donations, lobbying, regulatory seize, and the quiet shaping of nationwide priorities.
Secrecy produces a type of financial citizenship with out democratic accountability. These with offshore buildings get pleasure from the advantages of public infrastructure, markets, authorized methods, and social order, however contribute nothing proportionate in return. This breaks the reciprocal bond on the coronary heart of democracy: the precept that those that profit most from society ought to shoulder the best duty.
The race to the underside
When the rich can transfer cash effortlessly throughout borders, states start competing to draw paper income reasonably than investing in folks. Tax charges fall. Labour protections weaken. Regulation is diluted. Transparency is averted.
John Christensen confirmed that the “race to the underside” will not be a theoretical threat however a lived actuality. Nations that try to manage pretty are punished by the specter of capital flight. Those that capitulate are rewarded with fleeting monetary flows that carry no actual prosperity. The worldwide financial system turns into a contest in regulatory give up, during which jurisdictions are inspired to desert democratic oversight as a aggressive technique.
The UK’s offshore empire
John Christensen’s work made clear that the UK sits on the centre of this technique. Its crown dependencies and abroad territories — Jersey, Guernsey, the Isle of Man, the Cayman Islands, the British Virgin Islands and others — type a constellation of secrecy jurisdictions that funnel huge quantities of world wealth past accountability.
These networks should not embarrassing leftovers of empire; they’re actively supported hubs that reinforce the Metropolis of London’s energy. The UK thus income from a system that systematically undermines its personal democratic integrity.
What answering the John Christensen Query would require
To confront the corrosive results of secrecy, a society must make reforms that go far past closing a loophole right here or tightening a rule there. At a minimal, it could require:
Ending secrecy on the supply: public registers of helpful possession for firms, trusts, partnerships and foundations in each jurisdiction.
Taxing multinationals the place they create worth: by means of unitary taxation based mostly on actual financial exercise, not synthetic paper flows.
Reversing the race to the underside: coordinated worldwide tax flooring, anti-avoidance guidelines, and penalties for jurisdictions that facilitate evasion.
Dismantling the offshore empire: bringing UK-linked secrecy jurisdictions beneath the identical transparency legal guidelines that apply domestically.
Reasserting democratic management over capital: guaranteeing that wealth can’t evade the obligations of citizenship by means of opacity.
These are structural reforms, not technical fixes. They symbolize a rebalancing of energy between democracy and capital.
Inference
The John Christensen Query is, at its core, about energy. A democracy can’t survive if its richest members can exist outdoors the rule of legislation, outdoors public scrutiny, and out of doors the obligations of citizenship. Secrecy will not be a monetary quirk; it’s a political toxin. It hollows out the state, corrodes belief, and undermines the social contract.
Christensen’s work exhibits us that the race to the underside will not be an financial necessity however a political alternative — one which arises when governments concern capital greater than they defend democracy.
To reply his query is to insist that wealth should be seen, taxable, and accountable, and that the principles of democratic society apply to everybody equally.
Solely then can the facility of secrecy be dismantled, and solely then can democracy hope to outlive the pressures that world capital now exerts upon it.
Earlier posts on this collection:
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