Back in December last year, the collapse of FTX set off a train of thought, which was less about crypto than about the place of SBF’s arrest, the Bahamas. Over last four years, the island chain has taken on an outsized role in my life. In the summer of 2019 Dana and I bought a tiny cottage on the outer islands chain of the Abacos that within weeks was destroyed by hurricane Dorian, the historic storm which swept through the islands between 1 and 3 September 2019.
You sum up perfectly the inherent futility of late capitalism with the simple fact you built a quite lovely and expensive home directly in the path of a hurricane that destroyed the previous home, and under current climate change conditions, can easily be predicted as not the last to sweep through within the next few years. It’s hard to take anything you say as an analyst seriously when you act in such a mind-numbingly, reality-denying manner.
Thinking about this a little more broadly, it helps to explain some aspects of the development of global capitalism and the role of the United States which many find puzzling. There have been many predictions in recent decades of the advent of a multi-polar world, with variously Japan, Russia, the European Union and most recently, China touted as emerging players. None have so far significantly challenged the US, and it seems increasingly likely that China will fail as well. Outside observers are also frequently baffled at the stunted development within the US - persistent poverty, racial oppression, stunted educational and healthcare systems - which the rest of the developed world has long surpassed. Within the US, those who struggle with these issues bemoan the lack of resources while the focus of the government is on military domination of the rest of the planet and reducing the tax burden on billionaires. The simple answer is that there is no need for global capitalism to leave the nation-state behind as long as it can create one nation-state to dominate all the others, and completely capture the functions of that nation to meet its own needs.
Vanessa Ogle’s work on archipelago capitalism is a really good frame for understanding the networks of finance capitalism, especially tax havens since some ~10% or more (?) of global GDP is tucked away in them.
I’ve encountered here work first during my MA and it’s stayed with me ever since, how so much of the global economy depends on these grey zones especially since the neoliberal turn.
Why did you buy a cottage and even rebuild it if you know the island will finish underwater?
And then there is this: shorturl.at/jkJW3
And this: shorturl.at/cjnEU
You look comfortable. The new global economy is rewarding you handsomely, even as it punishes the less-skilled and well-educated American workers, African Americans above all.
Is there a way out? Maybe, but it will involve a vast redistribution of income from capital to labor, which is something we don't know how to do at present without adversely affecting the propensity to save and invest. How to get around that?
Consider this alternative: shorturl.at/otOZ0
Thanks for reading.
I noticed the track map for Hurricane Dorian is inaccurate - the eye stalled for 24 hours in the center of Grand Bahama
I can't see what common law has to do with it. Lichtenstein & Luxembourg are very "offshore," continental contiguity and civil law tradition notwithstanding. Similarly Switzerland, although less so these days. I see three essential elements of tax havens or laundromat zones: 1.) Sovereignty, at least with respect to domestic affairs; 2.) Political stability (i.e., low expropriation risk); 3.) No visible means of support (i.e., no possibility of retaliation for obnoxious financial habits, since gunboats are no longer permissible.) This describes Crown Colonies to a "t," as well as some other places. Interestingly enough, it does not describe Bermuda, which exports an enormous quantity of insurance, and is thus open to retaliation. But Bermuda's insurance industry is based on a very strong community of practice, not unusual secrecy or fraudulent conveyance rules.
Enjoy your insights. btw, anyone criticizing rebuilding in abacos just doesn’t understand the pull of those beautiful islands and people. doesn’t happen often either. last major storms 1992 and 1932. 2022 not so much.
You should check out Mark Hanna’s “Pirates Nests and the Dawn of the British Empire”.
From that vantage, your questions are addressed largely by mean reversion.
Are you sure bout "the Bahamas have become the richest Black-majority independent state in the world, as measured by gdp per capita" ?
Bermuda GDP/Capita ~$115K; Bahamas GDP/Capita ~$27K. Both black-majority independent states. EDIT: " the British monarch, represented by the governor, is the head of state" --Britannica. Stand corrected. Ironic though.....bermuda makes money from the climate storms
I can understand and empathize wanting to pick the Bahamas for a vacation home especially for someone who enjoys metropolitan life, as do i, (and wanting a significant population base around you, not isolation) and how it's practically reachable by even small boat from the US.
But Bermuda is raking in the insurance money...$100s billions in premiums to the jurisdiction. Also it's Bermuda that's home to the exotic ILS (Insurance catastrophe bond whatnot) securities market....
It would be interesting to contrast the British/American framework against the French in Martinique and Haiti for example. Poverty in the French territories is obvious but seemingly less white elites. One could also look at the trajectory of Vietnam from French colonization to its current economic status.