This book goes some way towards explaining why those who drove us to Brexit did so, and alarmingly where they are trying to take us next.
The author takes the reader through the development of ideas explored by an elite seeking to protect and sustain their wealth. Wealth that has continued to grow unabated despite the financial crash in 2008 or the global pandemic of 2020.
The book starts in 1970’s Hong Kong, considered by Milton Friedman and the emerging neo-liberal evangelists to be an economic miracle due to a low tax, light regulatory government. Tremendous growth had seen this territory of less than 500 sq miles become the 20th largest global exporter. As we discover though, this economic success was in no small part due to the exploitation of huge numbers of refugees from China, whose cheap labour was used to drive productivity. Then as now there was no democracy in Hong Kong, and what Milton Friedman concluded was that
“Democracy once established destroys a free economy” (p.15)
Which of course the Chinese fully understood, as when the new constitution was being prepared, it was the business people of the community who were represented…
“The Chinese Communist Party and Hong Kong Business people wanted the same thing. Rule of Law, bank privacy, weak labour laws, security of contract, stable currency.” (p.26)
China then adapted and perfected the Hong Kong model and spread it across China to create the global manufacturing power it has become.
We were told that Brexit Britain could become a Singapore on steroids, but then we find out why that couldn’t possibly be, as the economy of Singapore had been built on huge investment in their infrastructure and world leading public services. Their people benefitted from good housing, education and health care; whilst the British had seen our core public services sold off, privatised and allowed to fall into disrepair. There is though a darker side to the economy in Singapore, the extent to which it is dependent on migrant labour, housed in special camps, with labour rights reduced to Hire-Fire-Deport. This came back to bite Singapore later, when after initially managing Covid pretty well, the country’s failure to look after their migrant population proved to be a costly one.
The author moves on to discuss economic zones, where businesses are able to write their own laws. In 1980’s South Africa, a group of Libertarians sought to make Ciskei a beacon of industrial growth that would be
“the height of economic freedom in a state unburdened by representative democracy, stripped of its capacity to tax and redistribute, and trained by the threat of capital flight to always put the investor’s needs first”(p.89)
By 1988 there were 80 small Taiwanese factories there, but under apartheid it was as cruel a police state as you could imagine, built on the exploitation of cheap labour.
The 1980’s also saw the development of Canary Wharf, a city designed for business, not people. The government simply abolished the GLC to ensure that local planners were bypassed. Here too businesses were able to write laws in their own interest.
“… Canary Wharf is not subject to the usual rights of assembly and free speech. The Transport and General Workers Union found this out when it sought to protest the low wages of cleaning staff…” (p. 56)
Canary Wharf though was small fry compared to developments in Dubai, where a vast free trade zone, Jebel Ali, was created, with its own container port and lots of attractions for those looking to invest…
- 100% Foreign ownership allowed
- No corporate tax for 15 years
- No personal Income tax
- Full repatriation of profits and capital
- No labour unrest – (Hire-Fire-Deport)
Separate zones were set up for different sectors: healthcare, media, knowledge, aviation etc, each with its own set of laws. Islands were made and mansions built, creating safe places for the elite to put their cash…
“the Azerbaijani Head of State bought nine Dubai mansions in two weeks in the name of his 11 year old son” (p.178)
Zones, it seems, are spreading like a virus around the world. Interconnected they are disrupting national democracies and the rights of their people…
“The risks of bargaining away slivers of sovereignty became clear in 2022 when DP owned P&O Ferries, seeking to lower the wages it was paying, fired its entire workforce of eight hundred employees without warning on a single day.”
(DP World is a Dubai-based international logistics company)
The development of NEOM in Saudi Arabia will cover over 10,000 sq miles, already it has displaced 20,000 Bedouin, to create a zone run by and for the shareholders.
The author also looked at how some had sought to either
- Settle and create new states in places that are largely unoccupied. Nowhere though is totally unoccupied and indigenous peoples around the world from North Canada to West Australia have resisted and struggled against those trying to reshape the land they have inhabited for centuries
- Move into part of an existing state, and then seek secession from it. For some taking Britain out of the EU was just the first step to break up the EU. Even in the United States…
“Talk of a “national divorce” has become common place; in late 2021, 50 percent of Trump voters and 40 percent of Biden voters were sympathetic to breaking up the country” (p 234)
The author has shown how the huge resources available to a global elite have enabled them to conduct social experiments at scale, to see what does and doesn’t work. So that we can now see perhaps more clearly what they have in mind for themselves, and not surprisingly there is no role for democracy whatsoever. He concludes that by now
“Good capitalists realise that the real game is to capture existing states avoiding the hassle of creating new ones” (p.233)
Which is exactly where citizens of the US and the UK find themselves today. With the major political parties and much of the broadcast and print media sponsored by the wealthy who have no interest in paying taxes to fund hospitals, schools, transport and housing, unless they can extract rentier income from them.
Perhaps the questions we should be asking now are.
- How is it that an elite have acquired so much wealth, that they can simply use the threat of “capital flight” to blackmail governments to do their bidding?
- What can we do about it?
This book is hugely revealing about the aims and power of the super wealthy, and the clear and present danger they pose to those striving for greater democracy.