The Global Financial Crime Wave Is No Accident


Naked Capitalism has the article The Global Financial Crime Wave Is No Accident by Nat Dyer.

Top of my list of neglected economic superstars is Professor Susan Strange of the London School of Economics, one of the founders of the field of international political economy. In a series of ground-breaking books – States and Markets, The Retreat of the State and Mad Money – Strange showed how epidemic levels of financial crime were a consequence of specific political decisions.

Dyer goes through four ways that Strange “showed how politics and the financial crime epidemic were intimately connected.” I’ll quote the first item in the list.

There was nothing inevitable about financial globalisation, Strange said. It was born out of a series of political decisions. It means that global money can skip freely across borders beyond the reach of national laws and supervision. For smart operators tax, regulations, and compliance become a choice, not an obligation. Strange argued that international organisations lack the power to control global money, only coordination between the world’s major economies can rein it in.

I have recognized for a long time that no single country can control the problem. It will require coordination among the major players around the world to get a grip on what is happening. There were efforts being made along these lines, but George W. Bush put a stop to the participation of the USA in the talks to rein in the tax havens. Now global “trade” talks are all about making it easier for the corruption to continue.

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