These Foolish Things: It takes your breath away (1995)

The Scavenger column from the June 1995 issue of the Socialist Standard

It takes your breath away

Orimulsion is a cheaper fuel for electricity power stations. It is based upon bitumen and is imported from Venezuela. Since it has been used at Merton power station, near Ramsgate, asthma attacks in the area have quadrupled. Because it is cheap there are plans to introduce it at a number of other power stations.

So what's new?

They throw the most lavish parties. Last year they air-freighted more than £13 billion in cash into the country to satisfy the popular demand for foreign currency. Their offices are already extravagant temples to Mammon. But now Russia's bankers want more.

With the Kremlin’s help they arc amassing enormous political power. In short. Russia's new plutocracy can boast of wealth and influence to rival the Medicis or the Rothschilds. Sunday Telegraph 16 April.

Current account

In the first five years of private operation, the regional electricity companies accumulated £1 billion surplus funds, instead of reducing charges to customers. Professor Stephen Littlechild, the highly-paid regulator appointed to prevent such excesses, either knew nothing about this or chose not to take any action. Whichever was the ease, he was useless.

The Thatcher nightmare

House prices have fallen by 25 percent in real terms since 1990 and experts believe that they have much further to fall. Over a million people in Britain arc caught in the negative equity trap, where they currently owe an average of £7.000 more in mortgage repayments than their home is worth on the market. Apart from the debt burden, this makes it extremely difficult for them to move house. During Margaret Thatcher’s rule, with her campaign for a “home-owning democracy” and income tax relief on mortgage interest payments, house prices doubled in seven years. Now the market is swinging back again.

True Brits

National Grid, the electricity transmission company being privatised, has avoided paying almost £2m in tax by setting up a financial arm in Dublin.

The company ladled £160m of its cash flow into the tax avoidance scheme before the government stepped in to make the arrangement less attractive.

A National Grid spokesman yesterday confirmed the existence of the "special purpose” firm and defended it as: “a tax-efficient way of managing the company’s money which is our duty on behalf of the shareholders. It is part of our treasury function, and normal practice for UK companies that have big cash flows” Independent on Sunday, 2 April.

The Scavenger

The Haves and the Have-Yachts (2007)

From the July 2007 issue of the Socialist Standard

The rich are not all equally wealthy. According to an article in Times at the end of last year (4 December), a rift is opening up among wealthy Britons between the merely rich, and the super-rich. The reporter went to a West London nursery school – £1800 a term, or £5400 a year – and found the conversation mainly about the forthcoming City bonuses. “According to the centre for Economics and Business Research, a staggering £8.8 billion will be paid out in this next round, with more than 4200 individuals receiving more than £1 million each. Much of that money (around £5 billion) will find its way into property, half of it in London; and of the overall bonus, between 60 and 70 percent will go to non-UK residents – i.e., foreign nationals working in London, many of whom will not be liable for UK tax.” Many of these latter are now the super-rich, whose expenditure is soaring above that of the rich: as Rachel Johnston put it in her book Notting Hell, it is now “the Haves versus the Have Yachts”.

One of the main reasons for the rise of the super-rich is the policy of the Labour government: Tony Blair and Gordon Brown and their friends do love the wealthy. “Britain has one of the most business-friendly tax environments on the planet, exemplified by the non-domicile (or ‘non-dom’) tax laws. In simple terms, these allow wealthy foreign nationals to hold their main liquid assets in tax-free offshore environments while operating freely within the UK – largely untroubled by the Exchequer (the same is not true of British nationals).” The result is that “London’s status as the place to make and take money has only been reinforced in recent years”.

With such competition, the merely rich feel jealous about the super-rich. One City fund manager (Eton and Oxford) said “Not only do they look down on us, they have made our lives more uncomfortable from a financial point of view too, by pushing up the price of traditional wealth assets – school fees, house prices, staff.” An investment banker said, “the super-rich are fine. They either don’t need to pay tax at all or find ways of avoiding it. I don’t have enough cash to employ a clever accountant.”

The Have Yachts – people “with more than £15 million to invest” – operate on a higher level. “These are people who think nothing of spending several million on a party, or having their children picked up from school by helicopter and transported to a waiting private jet for a weekend in Gstaad. They have so much money that they pay experts to help them spend it.” For example, “at Quintessentially, the global concierge service, their ‘elite’ membership is by invitation only and costs a basic £24,000 a year. For that, members have access to finders and fixers in every major city across the world, 24 hours a day.” Among the requests they have dealt with are “finding a premiership footballer to play with a member’s son; sourcing twelve albino peacocks for a party with just three hours’ notice; completely redesigning a London hotel room; and organizing a trip to Hudson Bay, Canada, during the one month each year when the world’s largest concentration of polar bears gathers on the ice”. One service in much demand is finding appropriate houses, usually in London, or by the sea in the west country.

A director of a Central London estate agency said “super-rich foreigners” were their best customers. “Between 70 and 80 percent of our top deals are with foreign nationals.” The steady injection of largely tax-free money by the super-rich into the London housing market (prices in the “most exclusive districts” went up by 31 percent in the year to February 2007) keeps all prices rising, because the cost of cheaper houses follows the market upwards; so ultimately all the young people trying to get their own property, or giving up in despair, are feeling the knock-on effects of the Blair/Brown romance with the rich. If the specially favourable terms for foreign magnates are thought to be under threat, prices decline. “House prices in Central London took a considerable dip in 2004 when ‘non-dom’ was last under serious review; but a sustained campaign from the City and the Exchequer persuaded” the Chancellor to relent, and the super-rich breathed a sigh of relief.

Tax Haven

The International Monetary Fund has decided that Britain is now an offshore tax haven, listing it “alongside the likes of Bermuda and the Cayman Islands – unregulated jurisdictions associated with illicit funds” (Observer, 22 April). The “non-dom” people save vast amounts by largely avoiding British income tax. “The accountancy firm Grant Thornton worked out that the UK’s fifty-four billionaires paid income tax totalling just £14.7 million on their £126 billion combined fortunes” (Observer 4 March). That makes a rate of about one-hundredth part the percentage that the merely rich, who can’t wangle this particular tax-exemption, have to pay on their incomes. Among the “non-dom” Londoners are Lakshmi Mittal, Roman Abramovich, and the Hinduja brothers. The Observer (22 April) has several times asked Sir Ronald Cohen, who was born in Egypt and is now Gordon Brown’s “senior City advisor” (Brown has appointed him to several “taskforces”) whether he is lucky enough to have this “non-dom” tax status; Sir Ronald has refused to answer. If he has this status, he has something to thank the Labour Party for, and he – like Lakshmi Mittal, who tops the Sunday Times Rich List this year (20 April) – is among those who have generously donated funds to the Labour Party.

If you think that the law says that foreigners cannot contribute to British party funds, you would be mistaken: the Inland Revenue (whose regulations are laid down by Gordon Brown) says that people living in Britain under the “non-dom” rules can still be counted as residents, who can thus legally give money to – for example – the Labour Party (Observer 18 February). So that’s all right then. The authorities are less than forthcoming when questioned about this “non-dom” dodge. When asked about a month ago, Gordon Brown’s front man Ed Balls said, “Estimates of the tax foregone in the UK . . . by those not domiciled in the UK are not routinely made” (Private Eye 8 June). But when Private Eye asked about it, “HM Customs and Excise confirmed the information does exist”. However, they refused to divulge it because if they did “it would lead to less robust policy development” (whatever that means). It seems that the ” ‘non-dom’ tax exemption saves the mega-rich billions. The last figure released showed that in 2003 ‘non-doms’ were saving around £1 billion a year; and use of the ruse has multiplied since then. The benefits to Britain of hosting more billionaires and bankers are uncertain.” But Brown, “who has received campaign donations from prominent non-doms, wants to keep them happy without revealing the size of their subsidy. So much for his promise of ‘open and accountable’ government.” It’s all a long way from what Keir Hardie thought he was going to do when he helped to found the party which – he claimed – was going to establish socialism.

Like nearly all the big issues of the day which are endlessly canvassed in the papers and on radio and TV, this unpleasantness arises out of a disagreement within the owning class. Should all the members of that class pay their due taxes, to help support the state which runs capitalism for them? Or should some be allowed to get away with much less taxation than the others have to stump up? For Socialists, there is only one issue: getting rid of capitalism and all the struggles and the dubious hanky-panky it inevitably engenders, both between classes and within classes. If the non-dom ruse was stopped tomorrow, the owning class would still be obscenely richer than the rest of us.

Alwyn Edgar

Cooking the Books: What is capitalism’s true course? (2006)

The Cooking The Books column from the March 2006 issue of the Socialist Standard

Is capitalism inherently anti-human-welfare or is it just bad policies that make it that way?

An article in the Financial Times last year (11 October) by Raymond Baker and Jennifer Nordin entitled “How dirty money thwarts capitalism’s true course” put the case for the second view. According to them, capitalism’s “true course” is to take into account ethical considerations, what Adam Smith called “moral sentiments”, when pursuing profits. Unfortunately, they say, these days this is no longer the case (but was it ever?). “Global capitalists” have chosen to put “maximising profits” before “pursuing lawful and just business transactions”, with the result that a “dirty money” structure has grown up consisting of “tax havens, secrecy jurisdictions, abusive transfer pricing, dummy companies, anonymous trusts, hidden accounts, solicitation of ill-gotten gains, kickbacks”, etc, etc.

They ask themselves:

“Why has so much unethical behaviour become business as usual? One explanation is greed, pure and simple. But this does not adequately explain the phenomenon and demeans many in business who believe they are operating in an ethical manner. An overriding commitment to maximising gains, taking priority over principles comes closer.”

Not just “comes closer” , we’d say, but is the whole explanation. Capitalism runs on the basis of firms seeking to maximise profits which are then accumulated as further capital invested in further profit-making. As Marx put it, “Accumulate, accumulate! That is Moses and the prophets!“ (Capital, Volume I, chapter 24, section 3). But Becker and Nordin are right that this has nothing to do with personal greed on the part of individual capitalists. It’s something that is built-in to the system which those having to take decisions about economic matters have to abide by or risk the business they own or manage going under. Which is why the authors’ vision of a “free market system with a sense of justice and fair play” is no more than a pipedream.

A more realistic assessment of capitalism was given by Robert Newman in an article in the Guardian (2 February):

“Capitalism is not sustainable by its very nature. It is predicated on infinitely expanding markets, faster consumption and bigger production in a finite planet. And yet this ideological model remains the central organising principle of our lives, and as long as it continues to be so it will automatically undo (with its invisible hand) every single green initiative anybody cares to come up with. Much discussion of energy, with never a word about power, leads to the fallacy of a low-impact, green capitalism somehow put at the service of environmentalism. In reality, power concentrates around wealth. Private ownership of trade and industry means that the decisive political force in the world is private power. The corporation will outflank every puny law and regulation that seeks to constrain its profitability.”

This is well said. A green capitalism is just as much a pipedream as an ethical capitalism or, as we have been saying for ages, a capitalism reformed to benefit the workers. The only possible capitalism is the one we’ve got: a profit-maximising one.

Voice From The Back: The Obscenity of Capitalism (2008)

The Voice From The Back Column from the March 2008 issue of the Socialist Standard 

The Obscenity of Capitalism

The columnist Richard Morrison, in an article mocking the ridiculous prices paid for modern art, refers to Don Thompson’s book The $12 Million Stuffed Shark and brings to notice the obscene wealth enjoyed by a handful of billionaires. Remember we are dealing with the social system of capitalism where many exist on a $1 a day. “He looks at the buyers for ‘trophy’ art; billionaires such as the American asset manager Steve Cohen, who bought the shark with what, for him, was loose change (it would have taken him five days, Thompson estimates, to have earned the $12 million price tag).” (Times, 16 January) Overlooking the term “earned”, we are talking about someone whose income is over 2 million times that of another. Doesn’t capitalism make you sick?

Not So Primitive

Daniel Everett once was a missionary in Brazil dealing with so-called primitive tribes, but his experience of the Pirahã people made him give up that calling to become a linguist. When asked how he had changed his views he replied: “They lived so well without religion and they were so happy. Also they did not believe what I was saying because I did not have any evidence for it, and that made me think. They would try so hard to understand what I was saying, but it was utterly irrelevant to them. I began to think: what am I doing here, giving them these 2000-year old concepts when everything of value I can think of to communicate to them they already have?…” (New Scientist, 19 January)

Toothless Watchdog

The sole purpose of capitalist society is to make profits, so we can imagine the following report will come as no surprise to anyone who knows anything about how it operates. “The government will be publicly castigated this week over its failure to help poor people – by the watchdog that ministers set up to monitor fuel poverty. Ofgem, the energy regulator, will also be criticised for not stopping energy companies from making excessive profits at the expense of consumers. Peter Lehmann, chairman of the Fuel Poverty Advisory Group, will criticise the government over its record on fuel poverty, which he labelled ‘incomprehensible, unjustifiable and shocking’. Consumers now pay more than 50 per cent more on utility bills compared with five years ago, yet energy companies’ costs have risen by only a fraction of this. In the past month, four of the biggest suppliers have announced substantial rises in the price of gas and electricity.” (Observer, 3 February)

Loaded But Stupid

We are constantly being told by supporters of capitalism that the extremely rich got that way because of their superior intellect. That seems invalid thinking when we see how much the extremely rich will pay for a stupid pointless motor car licence plate. “But nowhere is the craze for a unique plate more intense than in the United Arab Emirates, the oil-rich Persian Gulf nation that holds the world record for the six most expensive plates. Here, it’s all about how low you can go — with people battling it out at auctions to win the chance to show off license plates with the lowest digit. The numbers “5” and “7” have already been snapped up,

Transcendental Materialism

The death of Maharishi Mahesh Yogi led to many newspapers rehashing the stories about the Beatles contact with his Transcendental Meditation, but it has transpired that his TM could have more properly stood for Transcendental Materialism. It seemed the great man had sited his HQ in a Dutch village for tax reasons. “As ever, the business-savvy guru was ahead of the game: the big draw is a financial regime that has made the Netherlands the EU’s top tax shelter. Among those who have set up holding companies there are Ikea, Nike, Coca-Cola and Gucci.” (Guardian, 7 February) Like many religious leaders before him this guru told his followers not to be concerned with the material things of life, but in practice was very shrewd about the way capitalism operated.

Proper Gander: Luxury Legoland (2020)

The Proper Gander Column from the July 2020 issue of the Socialist Standard

Monaco is a strange country, a haven for the super-rich on the Côte D’Azur, where the excesses of modern capitalism mix with old hangovers from feudalism. Filmed one year BC (Before Covid-19), Inside Monaco: Playground Of The Rich (BBC2) showed us inside its casinos, government offices and black-tie events. This particular playground costs a fortune to play in – keeping out the riff-raff – and its swings and roundabouts are all gold-plated.

Being not much bigger than Hyde Park in London, Monaco is the world’s second smallest state, after the Vatican City, and the most densely populated. It’s a constitutional monarchy headed by Prince Albert II, who can see more than half the country he rules from his office window. Albert’s ancestors captured the area disguised as monks nearly 800 years ago, and he’s still defended by soldiers (the ‘Carabiniers’) today. The affable prince has allowed the cameras to follow him on his tightly-choreographed official duties and time off, joking that ‘spontaneity has to be scheduled’. We also meet others who live and work in the pocket-sized principality, such as those who clean and organise hotel rooms which cost tens of thousands of Euros a night to stay in, and staff in air traffic control and the harbour who manage the influx of wealthy visitors’ yachts and helicopters. The streets and buildings of Monaco are sleek and pristine, but soulless, like, as someone points out, a ‘luxury legoland’.

Monaco’s demographics are different to those of other countries. Monégasques, or inhabitants with citizenship, are in the minority at just over a fifth of the population, which mostly comprises European ex-pats. There are strict rules around non-natives gaining citizenship, which is granted personally by Prince Albert for those who have lived there for ten years and satisfy other criteria. Citizenship confers benefits such as subsidised rents and priority for employment over foreign nationals. Non-citizens can only last there if they’re sickeningly wealthy. So, another difference between Monaco’s population and that of other places is that as many as a third of its inhabitants are millionaires, often identifiable by their self-satisfied, surgically-enhanced smiles. Proof that wealth is strongly linked to health is shown by the country having the world’s highest life expectancy, at around 90 years. This means that many of its inhabitants are elderly, leading to efforts to court younger super-rich people. These include the social media stars invited to Monaco’s Influencer Awards, whose president is Princess Camilla of Bourbon-Two Sicilies. At the gong-giving ceremony, one ‘influencer’ is asked ‘what are you doing here?’ and quips back ‘looking fabulous’; another is wearing a t-shirt saying ‘make money not friends’.

Proportionate to the number of its inhabitants, Monaco has one of the largest police forces in the world, and they have a zero-tolerance attitude to any misdemeanour and also the right to question anyone at any time. There are strict rules and laws: Monégasques can’t use the country’s casinos and the paparazzi are banned. Even camper vans, uploading photos to social media and walking down the street barefoot are forbidden. But rather than all this stirring up concerns about living in a police state, it’s welcomed among inhabitants as it protects their wealth and privacy. If you can afford to walk along the High Street (not barefoot) wearing millions of Euros’ worth of jewellery, you want to be reassured that you won’t get either mugged or papped.

Monaco isn’t large enough to accommodate industry or agriculture, and so its economy is based on commerce, and especially gambling. In the mid-nineteenth Century, its state was in the financial doldrums until the opening of the Monte Carlo casino, which drew in punters and their money from France, where gambling was then illegal. Since then, Monaco has also hosted money-spinners like the Influencer Awards and, more traditionally, the Grand Prix car race. During this event, Prince Albert hosts a reception at the Royal Palace for 700 guests, who enjoy wine priced at thousands of Euros a bottle and dishes with ingredients including a truffle worth £35,000. There’s enough money flying around that the state doesn’t need to charge income tax, a move which has attracted more millionaires and billionaires to the principality.

Monaco hasn’t found a way of managing capitalism which could be replicated anywhere and everywhere. Despite its sovereignty and quirkiness, Monaco’s economy is tied in with that of the rest of the world, even more so than other countries’ are. Its wealth relies not on the spin of a Monte Carlo roulette wheel or spectacles like the Grand Prix and the Influencer Awards, but ultimately on countless people elsewhere, whose work produces the profits which eventually end up being bet on red or invested in a bespoke super-yacht. All countries are concentrations of capital, and Monaco is also a concentration of capitalists. The lack of common ground between their lifestyles and ours highlights the extent of the class divide.

Mike Foster

Cooking the Books: The Money Shuffling Business (2018)

The Cooking the Books column from the January 2018 issue of the Socialist Standard

There is trade and trade. Trade in tangible things – what most will understand by 'trade' – and trade in services. This was brought out by a news item in the Times (6 November):

'Data published by the Office for National Statistics last week showed that Guernsey, with a population of 63,000, was one of Britain's largest international trade partners and the sixth-largest consumer of British services, putting it ahead of major economies including Italy, China and Japan'.

In other words, the UK exports more services (not tangible goods of course) to the island than it does to the other countries mentioned. According to the statistics, export of services to the Channel Islands, the Isle of Man, the British Virgin Islands and the Cayman Islands accounted in 2006 for 11 percent of all such exports.

What are these services? The ONS lists 52 of them, but excludes travel, transport and banking. On the list some such as technical advice on production are useful in themselves. Most are only useful in a capitalist society and some only to capitalists and capitalist corporations: accounting, advertising, market research, management consultancy, public relations, legal services, leasing, financial services, merchanting.

As sales of technical advice on how to grow potatoes, tomatoes and flowers must be rather limited, it is not difficult to guess what the 'trade' in 'services' with Guernsey will be. And why. In a word, tax-dodging.

That some capitalists and corporations don't pay their fair share of taxes compared with other capitalists and corporations is not really of concern to socialists or to the wage and salary working class generally. But it does expose the hypocrisy of those who preach patriotism to the workers while in practice being, as they used say of the Northern Ireland Protestants, more loyal to the half-crown than to the Crown.

Trade is a buying and selling transaction but what is traded doesn't have to be tangible. Anything – in fact everything – can be bought and sold and, under capitalism, is. Some services such as health care, education and entertainment are useful in themselves, even though corrupted by being sold. Other services – all those concerned with money – are useful only under capitalism. They would not make sense in a socialist society.

In fact, there would not be any trade or trading in socialism. There won't need to be as what is produced will be the common property of society and will just need to be moved from where it is produced to where it is needed (actually, technically this is still part of production). So, goods will still be moved from one part of the world to another. This won't be trade because no equivalent will have to be moved in the opposite direction. If people in some part of the world need farm machinery it will simply be shipped there. The same goes for food or minerals that can't be grown locally. There will be no expectation that something has to be shipped back in exchange. No doubt people will move from one part of the world to another to provide services like technical advice, training or health care. Once again, in exchange for nothing.

All the financial services necessary under capitalism – and the vast waste of resources and work involved in them – will disappear. The people of Guernsey will be able to give up shuffling about paper claims to wealth and concentrate on doing something useful, sure in the knowledge that, as with all communities, they will be provided with all the things they can't produce locally.

Some taxing questions (1981)

From the September 1981 issue of the Socialist Standard

The propagandists of capitalism are always lecturing the working class about our alleged obligations and responsibilities (to the capitalists, of course). We are told that to ask for higher wages is irresponsible, that all pay increases must be earned by higher productivity, that “restrictive practices" must be abandoned. The implication of all this propaganda is that the workers are somehow managing to cheat the capitalists and take more than they give whereas the capitalist system could not operate without the system of legalised theft through which profits are made. Putting that aside for the moment however, one might expect the capitalists, having struck this moral attitude, to set a good example themselves. This is far from the case however; taxation is a good example of their hypocrisy.

The capitalist class throughout the world is divided into various groups, each of which operates a state machine in its interests. To use the terms “country" or “nation” for these entities is to fall into a trap set by the ruling class, to create the illusion that the state represents the interests of the whole population. In order to run the services provided by the state, taxes are raised by the capitalist governments. Part of the fantasy concerning the nature of the state is that the whole population is contributing to the funds raised by taxation, and is receiving certain benefits in return. The truth, however, is that the capitalist class alone contribute to the national exchequer; the other social class the working class-does not pay taxes.

At first sight this assertion appears absurd. After all, many workers on their weekly or monthly payslips will see that a certain amount of money has been deducted for “income tax". And often when we buy something, the price tag will tell us that “value added tax” has been included. The answer to this apparent contradiction lies in the way wages arc determined.

In order to have access to the means of living, workers must sell their labour power, physical and mental energies, to an employer. Labour power is a commodity and its value, about which its price fluctuates, depends on the labour time necessarily involved in its production and reproduction. The wage or salary which the worker receives is the price of the labour power, on average just enough to keep the worker and any dependants in a state fit to carry out the tasks required by the capitalist class. Of necessity it must be the net wage, the worker’s take-home pay, which represents the price of labour power. Thus the “income tax” deduction on a worker’s pay slip is. in fact, part of the employer’s payment to the exchequer, and not a charge on the worker.

Now, in view of all the denunciations by the capitalist media of the “greed” and “irresponsibility” of the workers, what sort of example is set by the capitalist class when it comes to their own responsibilities in the matter of paying taxes? Sixty years ago Lord Clyde, a High Court Judge, set the moral tone in delivering judgement in 1920 in the case Ayrshire Pullman Motor Services and D. M. Ritchie v IRC:

No man in this country is under the the smallest obligation, moral or other, so to arrange his legal relations to his finances or to his property as to enable the Inland Revenue to put the largest shovel into his stores.

More up-to-date illustrations of capitalist ethics are given in the Granada TV Production series Business Decisions. The programme screened on 28 June last was devoted to tax problems. The TV Times billing posed the following questions: “How far can a business go to minimise its tax bill? How far will the Inland Revenue go to pursue offenders and change the law?” The assembled panel of executives, civil servants and “experts” were in basic agreement that to stretch the letter of the law to its limit for the purpose of tax avoidance was perfectly legitimate, indeed laudable. When it was suggested that “the government needs this money”, a company finance manager said simply “I need it too ”.

Illustration by George Meddemmen.

One thing is certain however: if some capitalists can reduce the tax bill they pay to the state, either more must be extracted from the other capitalists, or the services provided to that class as a whole will have to be reduced. The hypocrisy in the attitude expressed by this finance manager does not lie so much in saying that “his” firm need the money (although many who have massive resources will say this) but in the sharp contrast between the morality displayed here and the continuous demands for sacrifices from the workers. The distinction drawn in the programme between tax avoidance which stays just within the law, taking advantage of loopholes in it, and tax evasion, which the state is usually compelled to punish severely, is one which is of some concern to the ruling class although in reality no difference in principle is involved.

The use of tax havens has become increasingly common, so that it is now probably the most popular method of tax avoidance. A tax haven is a country where a taxpayer from a different country may achieve some relief from the taxation in his place of origin. Small states such as Lichtenstein and the Cayman Islands, which do not need to provide much in the way of services, are famous as tax havens. The revenue authorities in these places know that there is only one reason for a non-national forming a company there. However, some eminently respectable financial centres can also be used as tax havens. It is not, for instance, generally realised that Britain comes into this category, despite all the propaganda from the ruling class about “penal rates of taxation”. There are considerable attractions for non-residents, or even foreign nationals temporarily resident here. A UK registered company controlled from abroad pays no UK corporation tax on its non UK income and is free of capital gains and capital transfer taxes. This has made a useful and prestigious base for many multi-national businesses.

It is a sobering thought that this double standard is so openly admired by so many workers. It illustrates again how little pressure is yet being exerted for the abolition of capitalism, despite the misinformed optimism of a few left wingers. People generally act in what they believe are their best interests, and tax avoidance is only one quite small illustration of capitalists doing just that. To denounce them for doing so, as many left wingers do, is to miss the point completely. The trouble is that the working class have an incorrect appreciation of where their true interests lie, still believing that the capitalist system can somehow be made to operate, like some great tropical tax haven, to their benefit.

E. C. Edge