Seems to be a lot of complaining about the City of London's semi-autonomous status, without actually explaining why this is a bad thing. I've always thought it was just an odd historical quirk. They're still subject to the general laws of the country, still subject to the same taxes and regulations.
The articles main complaint seems to be about banks and other financial bodies using offshore tax havens, but that has nothing to do with the City's odd status. That could happen - and does happen - anywhere in the world...
Yep. The City is in every way entirely subject to parliament, and the laws of the country apply within the square mile in every particular the way they do outside it.
The biggest oddity is that since so many people commute into the City, they don't just let residents vote in council elections, but also businesses in proportion to the number of workers they have; an odd but not altogether crazy way of making sure that all stakeholders are represented.
...what any of this has to do with offshore tax havens is a mystery to me. There's only one FSA in Britain, and they don't care where you're headquartered.
Edit: From the article: "the corporation is an offshore island inside Britain, a tax haven in its own right. The term "tax haven" is a bit of a misnomer, because such places aren't just about tax."
Actually, it's not that it's not just about tax; it's that it's not about tax at all. Tax rates are the same in and outside the City. A "tax haven" that's not a haven and doesn't have different tax rates? This is Orwellian stuff.
Sorry but businesses getting to vote based on the number of workers they have sounds insane and totally undemocratic.
There is a tendency on the internet to downplay the significance of democratic principles and to consider them as quaint, liberal or at odds with libertarianism. Worrying imo.
It is literally a single square mile. Nobody's sense of democratic principals should extend so far as to say a single square mile cannot choose to govern itself a little differently.
There are 7,000 actual residents in the City of London and more than 300,000 people work there. To give the huge imbalance of people who work but don't live there a voice in government a mere 16000 non-resident votes are also allowed and divied up to businesses with respect to their size. For the boring local government services provided, this is more than fair.
Also, in general the people who live (especially) and the people who work in the City of London are fabulously wealthy. My heart doesn't bleed for their lost electoral rights (not that I actually believe that the system is unfair) and they all seem pretty okay with it anyway.
If the people who work there "got a voice in government" that would be quite a bit better. According to the article that's not the case: Corporate management of "Goldman Sachs and the People's Bank of China" would be calling the shots.
Not sure if I understand where you are coming from. How can you not see a fundamental problem with the situation (even if "people are rich" and "just a square mile" would make this particular situation less severe)?
Would you be ok with an expansion of this system to other areas? How do you feel about democratic ideas in general?
Do you think that the board of trustees for a university should be elected by those students and others living on university owned property? Many universities own far more than 1 square mile, they are essentially mini-cities with their own police, courts, etc. Is it a fundamental problem that universities are not run as democracies?
I'll leave this question unanswered as I don't have knowledge about the type of university you are talking about (mine had no own police). If you are truly curious about this topic, your question has probably been thorougly dealt with in literature in the last 100 or 200 years.
If you just put that there to weaken my argument, I'd say let's stay with the topic at hand. We were discussing a local government that's nominally run as a democracy but where corporations have the votes, potentially part of a trend to less democracy if we are not careful (see protesting in the USA, blogging in Russia etc.).
I have a sort of a long term career dream of starting a community/small city as a startup. Such a community would necessarily not be run as a democracy. I have found that there exist "true believers" in democracy, who view it is morally problematic for any community to not be a democracy. Yet such true believers tend to be quite inconsistent in their beliefs - they very rarely complain about college campuses, remote company towns, military bases, research facilities, etc, not being run as democracies. I am thus very interested in how people draw distinctions - what makes it ok for one community or mini-city to be a democracy but not another, where is line? And in designing my city some day - how can I avoid setting off people's triggers whereby they denounce a certain government structure for not being democratic?
> what makes it ok for one community or mini-city to be a democracy but not another, where is line?
There isn't one, really. Which is why the Soviet system instituted formally-democratic assemblies in any entity. In principle, it was a great idea; in practice, these bodies were soon hijacked by professional political operatives from The Party, who would steer them in the "right" direction and use them as another tool of control (speak up against the Party line in your factory soviet, and you'd soon be on a train to Novosibirsk). For other insights into that particular form of organization, I'd recommend Bulgakov's "Heart of a Dog".
Whether the limits of the Soviet system where environmental or historical in nature (they didn't have the internet, say), it's an open debate for another day, but I mention it to define one extreme of the theoretical scale: anyone can vote on anything. At the other extreme, you have absolute monarchy: nobody can vote on anything.
Anything in between these extremes is not "absolutely democratic" or "absolutely undemocratic", which is why debate is so fragmented and dependent on specific circumstances. You can have profoundly-undemocratic organizations being run in a substantially democratic way by this or that specific leader, or formally-democratic institutions being run with an iron fist by a single individual.
I think that, pragmatically speaking, the most basic element of democracy is just the acceptance of the existence of feedback. If one is ostracised, isolated or punished for the simple act of expressing a differing opinion, people will feel that democracy is non-existent, that the game is rigged. On the other hand, if differing opinions are given substantial space and even co-opted by rulers, especially in times of crisis, the absence of formal democratic structures will be considered a purely theoretical problem and likely ignored in practice.
Others famously define the basic unit of democracy the answer to the question "can we replace our rulers without violence?". However, this sort of argument can be subverted by putting in place mechanisms for such a replacement and then, by other means, ensuring that they will never be invoked.
FYI, a recent "shake-up" of financial regulation saw the FSA (Financial Services Authority) change its name to the FCA (Financial Conduct Authority), and certain parts/responsibilities of the old FSA were (nominally) hived off to a new Prudential Regulatory Authority (PRA), which falls under the remit of the Bank of England.
> They're still subject to the general laws of the country, still subject to the same taxes and regulations.
The point of the article is that this is actually not true; the City is not subject to Parliament and Monarch, but rather a peer with substantial autonomy on various matters, enjoying special representation at Westminster and in other bodies. The author mentions a private development where the City was at the same time investor and institutional overseer, in a clear conflict of interest that would be illegal elsewhere in the UK.
Because the City body politic is composed by businesses rather than individuals, most matters where special status is invoked or leveraged are financial privileges and lobbying powers of one sort or another; this enabled City companies to build the network of tax havens we all know and love, where money flows to semi-autonomous City of London, which redirects it to progressively-more-autonomous dominions oversea, disappearing like a ship on the horizon.
Removing all privileges the City enjoys would be a necessary first step to crack down on global tax avoidance in the financial sector, but this is extremely unlikely: Blair's (New) Labour held an overwhelming parliamentary majority for a decade and still conceded to the City's wishes, while Tories are wholly dependent on City money to even exist in the first place. The author believes international pressure will eventually force the government's hand at some point; personally, I am quite skeptical -- but then again, I work with/for a lot of City companies, so I might not be entirely unbiased.
The only taxes I can see them being exempt from are local council taxes, not income/VAT/corporation tax. And whilst they are nominally not subject to the Monarchy, nor is the rest of the country really.
Much like the Monarchy, the City's regulatory power is largely paper thin and only exists within the square mile. The moment they tried to exercise any kind of open egregious use of power (like evading, rather than avoiding corporation tax), they'd find their priviledges revoked near-instantly.
However that doesn't prevent them from using the usual methods of bribery and corruption from influencing the government. But then how is that any different from any country in the world?
> how is that any different from any country in the world?
Well, other countries at least try to maintain the idea that democratic power comes from the electorate, rather than special interests. So corruption, where it is, has to pass through the electorate (which it often does, but that's another matter). Whereas in Britain, the City is an institutional body openly and directly representing business and "free trade" in Parliament and elsewhere.
This arrangement is closer to what Mussolini implemented in Italy, based on the idea that Parliament should be a zone of mediation between competing private interests, rather than a body dedicated to represent and discover the Will of the People as a whole (which is the traditional French model).
From an ideological standpoint, Labour policy has been very far from unionism for almost 20 years now, and there is an ongoing attempt to cut all remaining ties.
Actually, there are 2 financial center in London. Canary Wharf and the City.
Canary Wharf does not enjoy the same weirdo status as the City and that does not seem to prevent bank like HSBC to be headquartered there. Also quite a lot of financial institutions bleed outside of the City, like in SouthBank.
The whole financial sector in the UK has a murky reputation, and there have been regular show on TV about how "the City" is a big money laundering machine. The City in this cased was used as a synonym for the whole sector in the UK rather than the physical location.
True, but if Barclays has 500 subsidiaries, how many will hsbc have? It was probably just cheaper to have the big office in canary wharf and keep the city office with less staff.
I work close to bank station and I have never in my life seen so many banks, in the smallest spaces you get the most exotic bank branch from a bank operating in some other part of the world. And that's just on the street level - if it's not a pret it's a bank- and who knows what's in those generic skyscrapers housing 20 different companies...
I was on the edge of my seat waiting for them to get to the point and I still am. Sounds like a handful of socialists belly aching about something they don't understand but feel is unfair.
The articles main complaint seems to be about banks and other financial bodies using offshore tax havens, but that has nothing to do with the City's odd status. That could happen - and does happen - anywhere in the world...