Noblesse Without Oblige

Noblesse Without Oblige

The super-rich opt out of the social contract by picking and choosing which laws apply to them, whether in offshore tax havens or at home.

Offshore: Stealth Wealth and the New Colonialism
by Brooke Harrington
W.W. Norton, 2024, 176 pp.

Over the past eight years, a series of major document leaks has shone a spotlight on tax havens and their users. The Panama Papers, made up of 11.5 million documents from the offshore law firm Mossack Fonseca, broke in 2016. Next came the Paradise Papers in 2017, a trove of even more material, mostly from the Bermuda-based law firm Appleby and two other offshore corporate services providers. The Pandora Papers, published in October 2021, constituted the largest and most comprehensive such leak yet. Several earlier, smaller leaks—including the Swiss Leaks in 2015 (from the Swiss subsidiary of the British multinational bank HSBC) and Lux Leaks in 2014 (detailing tax arrangements for multinationals devised by the accounting firm PricewaterhouseCoopers and the Luxembourg government)—had garnered less publicity but likewise revealed the shameless activities of lawyers, accountants, bankers, and their clients.

Across the Panama, Paradise, and Pandora papers, a wide range of names popped up with offshore connections of one kind or another: popstars like Madonna, Bono, and Shakira; the former Prince Charles (now King Charles III) and the late Queen Elizabeth II; the former president of Colombia, Juan Manuel Santos; former UK prime minister Tony Blair; former Kenyan president Uhuru Kenyatta; Azerbaijan’s ruling Aliyev family; and Donald Trump’s onetime secretary of commerce Wilbur Ross, who held an interest in a shipping company that moved millions of dollars of Russian oil every year, with ties to Putin as well as other sanctioned individuals.

Given such wrongdoing among a sliver of extremely wealthy and influential individuals, why, after a couple of weeks of public attention, does the problem of tax evasion fade from view so quickly? In Offshore, Brooke Harrington, a sociologist at Dartmouth College, suggests an answer to this question. Part of the problem, she contends, is the culture of secrecy that pervades tax havens and other offshore jurisdictions. Most often, we simply forget that tax havens exist. This is not a bug but a feature of the system, designed by the politicians, lawmakers, and professionals who enable tax avoidance and evasion.

Harrington’s contention is that if these shenanigans of the super-rich were less shrouded in secrecy, people would be more outraged. That is probably true. Secrecy doesn’t just help rich people dodge the tax man, but also to keep the most unfair and unsettling aspects of widespread tax avoidance and evasion out of public view. Harrington cites recent findings by economic psychologists showing that most people vastly underestimate the extent of inequality in their countries—in the United States, by as much as 42 percent. Since the 1960s, offshore capitalism has quietly helped transform the global economy by pioneering financializat...