How offshore capitalism ate our economies

The world, as Arthur Schopenhauer observed, is a business that doesn’t cover its expenses. This wasn’t idle metaphysics but first-hand experience. The Schopenhauer family had been wealthy stockbrokers in the free trade city of Hamburg. Then the European economy collapsed and they lost everything.

Two hundred years later, there is much that Schopenhauer would find familiar in the landscape of bank failures, collapsed companies and growing unemployment. What lies behind the global recession is a particularly virile form of capitalism, now seemingly in its death throes. Let’s call it “offshore” capitalism — literally so in the way it had locked itself into a network of tax havens and offshore finance centers that formed the shadow side of the world’s banks and mega-corporations. But this was offshore in a metaphorical sense too — it produced financial structures and instruments so absurdly technical and abstract that the net effect was a freakishly remote economic system, detached from society.