Perfidious Albion, seedy ads and The Economist

We have just blogged a new report to the French National Assembly on the subject of tax havens. Quite separately, we'd like to draw your attention to Annex 2 of the report, which includes the following image taken from the small ads section of The Economist magazine (we know, we know: they prefer to call themselves a newspaper, but sorry, it's a magazine).

The Economist has many interesting things to say, but when it comes to their attitude towards tax havens we don't claim to be fans. And the fact that they have been running these ads, and others like them, for decades highlights their rather relaxed position on the seedy side of financial capitalism.

To the eyes of impartial observers, such ads confirm that secret trusts, companies and offshore foundations are intrinsic parts of the Anglo-American model of laissez-faire capitalism. Far from being committed to free and transparent markets, the self-proclaimed apostle of neo-liberalism is taking advertising revenue from those who promote the exact opposite. As the authors of the French parliamentary report note (page 52):

For a long time there has been a certain complacency towards offshore practices. Since the end of the 1950s, the “flexible attitude” of the Bank of England has allowed the development of the Eurodollar markets, which operate outside regulatory constraints. The permanence of this culture can be seen in the media, exemplified here by regular advertisements in the weekly British publication The Economist placed by operators based in London offering services for creating offshore companies and for offshore banking, and not exclusively working out of the United Kingdom.

This flexibility is offered as explanation for why London ranks alongside New York in the international financial system.

Distrust between the French and the perfidious British goes back many, many centuries. But in the past decade the Anglo-American economic model has heightened levels of distrust, especially when Prime Ministers Blair and Brown have visited Europe to preach the virtues of deregulated markets. That is all so much hubris under the bridge now, but ads such as these in The Economist do little to build confidence that the fight against tax havens is gaining traction.