Anyone looking for a graphic illustration of the one-sidedness of attacks on banks and tax havens would do well to watch a new documentary. The UK Gold, written and directed by Mark Donne, presents itself as an erudite and well-informed but is essentially an old-fashioned conspiracy theory. Its most striking feature is its habit of making giant logical leaps from one problem to another.
In its view a shadowy global network of financial institutions is to blame for many of the world’s key economic and social problems. To the extent that governments are criticised it is usually for allowing themselves to be captured by the banks. The possibility that states have played a large role in their own right in creating economic problems seems to elude the film.
Nor is there any mention of the real economy. The possibility that economic factors such as low investment, poor productivity and weak economic growth might play a part in the story does not figure. Instead the film simply notes that there was a financial crisis in 2007-8 without considering the possibility that it had deeper economic roots.
None of this is to deny that the film points to some real challenges. Much of the film centres on Father William Taylor, a Church of England vicar from Hackney, who identifies a direct link between his parishioners’ problems and the City.
It is certainly true that Hackney has high rates of unemployment and poverty as well as poor infrastructure. As it happens I have lived in that London borough and still often visit friends who are based there. But the claim that there is a simple connection between financial institutions and Hackney’s destitution has to be proved rather than asserted.
The relationship drawn with African poverty and Zambia in particular is even more tenuous. There are many reasons why Africa remains tragically poor including the insistence of western governments and non-governmental organisations on sustainable development. This is essentially a coded way of saying that Africa should not try to develop as a modern, industrial economy. Instead they suggest it limit its ambitious to small-scale development and alleviating the most extreme forms of poverty.
It is also true, as the film claims, that banks bear some share of culpability for the crisis and that the legal status of many tax havens is absurd. British-run offshore territories tend to be run by governors with any legislation requiring the royal assent.
But focusing on finance while ignoring the central role of the state or the part played by the real economy gives a grossly distorted picture. The campaigners in the film end up looking like the militant wing of the HMRC with their demand for a severe clamp down on tax avoidance.
Readers of this blog might be particularly interested to hear that Jonathan Ruffer, the chairman of the Ruffer fund management firm, appears in the film several times. By his own account he earns an “absurd” amount of money.
But surely what is really absurd is that anyone in Britain should be earning as little as the minimum wage of about £6 an hour (even less for those who are under 21 or on apprenticeships). The pittance that most people have to live on in Africa is doubly absurd as well as a human tragedy.
Daniel Ben-Ami is a writer on economics and finance. His personal website can be found at www.danielbenami.com