Jan 17 2011

The FT likes Treasure Islands

Posted by: Nick Shaxson in: Thoughts

Treasure Islands has now been reviewed in the Financial Times. It’s a nice one:

‘Shaxson combines meticulous rewearch with amusing anecdotes, resulting in a very readable account of the murky world of offshore and a strong moral message that the system needs to be changed.’

The review is not entirely uncritical. “This is not a book that argues both sides of the topic,” notes the reviewer. Well, that’s true, up to a point: as I have already noted – this is a book with an opinion, and I’m not ashamed to say it. Although I do reproduce and discuss  opposing views in some detail, notably in my chapter ‘Resistance’ – and in fact the FT reviewer does note this:

‘he devotes a convincing chapter to rebutting the views of those who support tax havens’

There is one part I’d mildly disagree with:

“The reader is left with unanswered questions. Why do multinationals shift their profits into low-tax havens and costs into high-tax countries? The only motives Shaxson gives are sinister. . . . he makes little mention of shareholders in multinationals who benefit from extra profits”

Well, yes, I must admit that I don’t spend too much time defending tax-dodging by multinationals. But their reasons for doing so are incredibly simple: they are responding to shareholders, and ignoring society. And in fact, I do dedicate a bit of time on it. Page 30, for example:

“Tax is the missing element in the corporate social responsibility debate. Modern company directors do, it is true, face a dilemma. To whom are they answerable – to shareholders only, or to a wider set of stakeholders? There are no useful guidelines.

I continue, arguing that while many treat tax as a cost to boost short-term shareholder value, whereas others see tax not as a cost but as a distribution of profits to stakeholders and society – creating the enabling environment in which corporations make their profits.

So I don’t think that point in the review is entirely fair. But it is true that it isn’t an issue I discuss at great length. Perhaps I should have. Read more about this issue here. Overall, I’m delighted with this review.

3 comments so far

Huw 1th January, 2011 8.32 pm

Hello Nicholas,

I’ve nearly finished your book. Congratulations on an amazing bit of research. It’s worth every penny and I hope the tax avoiders get nailed.

That said, I have one comment, which is that the FT has a point. It would be great if, as I’m sure will happen, you get a second edition and the chance to write an intro or epilogue. I think it is very useful to look into why companies do this, and to give us their points of view rather than only the loudest and coarsest defenders (like the guy from the Cato institute). I want to hear what they have to say about it themselves. I like my duels out in the open, but the propensity of tax avoiding companies and individuals to stay out of the limelight means we are robbed of any counter argument. It would be good to get some of their views in there.

I feel the same way about the banker’s bonuses issue. I want to hear more from the banks themselves. If, as I suspect, they really think “look, you need us to be good at what we do, we’re competing so have to pay more to get the best staff, and being too big to fail is simply a fact of life” then at least that’s straightforward and out in the open. I think there’s a danger in the banking debate that the counter views are being kept silent out of a fear of a public lynching (perfectly understandably).

As an example – why not get someone from the DT like Liam Halligan or Nile Gardiner to take the opposing view?

Also, any chance you can get yourself on newsnight or question time? This issue needs a thorough airing.

Thanks again, great book,


Nick Shaxson 1th January, 2011 10.57 am


I think that this is probably fair comment, although the “why we do it’ argument of multinationals is so straightforward as to be not worth spending too much time on, in my view.

And on this site, I’ve started putting up some of the arguments and counter-arguments up – I hope this can be a forum where this can be debated. I will be adding to it in due course. It’s here


Nick Shaxson 1th January, 2011 10.58 am

and on the banking argument – they do make those arguments all the time, (though the ‘tbtf is a fact of life’ is less often aired)

Anyway, to be discussed further.

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