A discussion of the origins of urbanization may provide some insight into the character of modern social problems by highlighting the long historical dynamic at work. It may not be out of place here to point out that anti‑states are well known in the modern world, above all in what the U.S. Federal Reserve Board classifies as eleven offshore banking centers. Five such enclaves are in the Caribbean: Panama, the Netherlands Antilles (Curacao), Bermuda, the Bahamas, and the British West Indies (Cayman Islands). Three enclaves—Hong Kong, Macao, and Singapore—were founded to conduct the China trade. The remaining three are Liberia, Lebanon, and Bahrain at the mouth of the Persian Gulf—the island which Bronze Age Sumerians called Dilmun when they used it to trade with the Indus valley and the Iranian shore.
Nothing would seem more modern than these offshore banking and tax-avoidance centers. They are the brainchildren of lawyers and accountants in the 1960s seeking to weave loopholes into the social fabric—to provide curtains of secrecy (“privacy”) to avoid or evade taxes, and to serve as havens for ill‑gotten earnings as well as to facilitate legitimate commerce.
Whereas modern nation‑states enact laws and impose taxes, these enclaves help individuals evade such regulations. And whereas nation‑states have armies, these centers are the furthest thing from being military powers. They are antibodies to nationhood, yet more may be learned about Ice Age, Neolithic, and even Bronze Age gathering and meeting sites by looking at these modern enclaves than by examining classical city‑states such as Athens and Rome.
Instead of being politically independent, the modern offshore banking centers and free trade zones are small former colonies, e.g., the Caribbean islands as well as the Chinese entrepots. The Grand Cayman Island was a Jamaican dependency until 1959, when it chose to revert to its former status as a British crown colony so as to benefit from what remained of imperial commercial preferences. Liberia and Panama are U.S. dependencies lacking even their own currency system (both use the U.S. dollar). Hong Kong did not gain title to its own land until Britain’s leases expired in 1997. Panama did not gain control of its canal until 1999.
In sum, whereas political theorists define the first characteristic of modern states (and implicitly their capital cities) as being their ability to enact and enforce laws, offshore banking centers are of no political significance.
In the sense of being sanctuaries from national taxes and law authorities, such enclaves are in some ways akin to the biblical cities of refuge. If they are not sanctuaries for lawbreakers in person, they at least provide havens for their bank accounts and corporate shells.
Typically, entrepots are on islands or key transport navels such as the Panamanian isthmus. They are separated as free ports politically, if not physically, from their surrounding political entities. They often are centers of travel and tourism (“business meetings”) and for gambling. In antiquity they typically were centers for sacred festivals or games such as were held at Delphi, Nemia, the Corinthian Isthmus, or Olympia (whence our modern Olympic games originated in a sacred context).
Although Delphi and Olympus were landlocked (as was Çatal Hüyük), they were centrally located for their local regions. They served as religious and cultural centers, whose festivals and games could be conveniently attended by the Hellenic population at large. Even visitors who were citizens of mutually belligerent city‑states enjoyed sanctuary. Of course, today’s enclaves no longer claim sacred status, except for the Vatican and its Institute for Religious Works promoting money-laundering functions1. Their commercial focus has become divorced from the religious setting associated with international commerce down through medieval Europe with its great fairs. And indeed, their attraction is especially to wealthy individuals avoiding the tax laws and criminal codes of their own homeland.
Although today’s enclaves rarely have armies of their own, they are militarily safe. Thanks to their unique apolitical status, and indeed to their ultimate dependence on larger powers, their neighbors have little motive to attack them and every reason to use them as business channels and even for government transactions such as arms dealing, money laundering, and related activities not deemed proper behavior at home. The resulting commerce thrives free of regulations and taxes, conducted in militarily safe environments without the cost of having to support standing armies, and hence less need to levy taxes for this purpose, or to monetize national war debts.
To create such enclaves has been an objective of mercantile capital through the ages. It patronizes the world’s politically weakest areas as long as they do not do what real governments do: regulate their economies. The search for “neutral territory” expressed itself already in the chalcolithic epoch, many millennia before private enterprise developed as we know it. The result of this impetus is that neolithic towns such as Çatal Hüyük, Mesopotamian temple cities such as Nippur, island entrepots such as Dilmun, the Egyptian Delta area, Ischia/Pithekoussai, and the biblical cities of refuge share the following important common denominator with today’s offshore banking centers: Instead of being centers of local governing, legal, and military power, they were politically neutral sites established outside the jurisdictions of local governments.
Whether the status of these urban sites was that of sanctified commercial entrepots or amphictyonic centers, they provided a forum for rituals of social cohesion to bolster their commerce. These rituals included the exchange of goods and women (intermarriage)—commerce and intercourse in their archaic sexual meaning as well as in the more modern sense of commodity exchange.
Michael Hudson’s new book, The Destiny of Civilization, will be published by CounterPunch
Books next month.
Source: CounterPunch
