Friday, February 04, 2005

Tom Hartmann posted a piece about multinational corporate tax avoidance and how it is a strong indication that we are headed toward a new period of corporate feudalism.

I've been thinking about this for a while.

E.g. Take this passage from The Outlaw Bank: A Wild Ride Into the Secret Heart of BCCI by Jonathan Beaty & S.C. Gwynne (two Time reporters) -- which is the best introduction to that byzantine scandal (and highly entertaining):

"Though it was fundamentally a financial fraud, BCCI itself was not a bank in any conventional sense. Or, more precisely, banking was only a part of the global organism, the ingeniously constructed platform from which its other lines of business were launched. Taken collectively, it was more of an armed Renaissance city-state of Machiavelli's era than a modern corporation. This "bank" possessed its very own diplomatic corps, intelligence network, and private army, its own shipping and commodities trading companies. And BCCI itself was so thoroughly enmeshed in the official affairs of Pakistan that it was often impossible to separate the two. ... BCCI was bigger even than that: It was the unsettling next-stage evolution of the multinational corporation, the one the theorists had been predicting for years but which never seemed to be able to shed its sovereign boundaries. (General Motors and Mitsubishi are both good examples of this -- huge companies with holdings and operations all over the world that nonetheless persist in being fundamentally American and Japanese entities.) In taking that step, BCCI became truly stateless and very nearly invisible to the authorities in each country where it did business. The BCCI scandal shows what sort of frightening mischief can be made in a world where trillions of electronic dollars routinely wash in and out of international financial markets...Nor was BCCI a conspiracy. In much of what it did, BCCI reflected the way the world works. The organization was designed to mimic the way the world's largest corporations and banks move and hide their money."

(for more on BCCI, also see the Kerry Report).

Of course all companies strive to be like BCCI, because that is the system.

Recall that GE's famous CEO Jack Welch once said, "Ideally you'd have every plant you own on a barge" -- ready to move if any national government tried to impose restraints on the factories' operations, or if workers demanded better wages and working conditions.

And in 1972, Carl A. Gerstacker, then the Chairman of Dow Chemical Co., confided to a White House Conference on the Industrial World Ahead that he dreamed of buying "an island owned by no nation" and on "such truly neutral ground" he would locate the world headquarters of Dow so that "we could then really operate on the U.S. as U.S. citizens, in Japan as Japanese citizens, and in Brazil as Brazilians rather than being governed in prime by the laws of the United States."

How different is this vision from that of the British East India Company?