The Sophisticated Hut
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The Sophisticated Hut

Posted on November 29, 2016 by urbanNext

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The primitive hut can be understood as a foundational concept for architectural development, one predicated on providing a minimum amount of shelter from the environment. On the other hand, the globalized system of international finance and capital movement also deploys the shelter, although in a much more sophisticated and nuanced manifestation, serving however, essentially the same purpose. The dispersed factory and the economic zone have become symbolic of global markets, capital at its most efficient. This essay tracks and interrogates their flip side, the tax haven. Understood within the rubric of globalization as a site of modern labor and production, the tax haven embodies more than just an expansion of global markets, it embodies the ethos and aesthetics of financial and intellectual production.

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A Not-So-Primitive Hut: Tax havenry as a spatial practice

It would not be a stretch to say that the history of civilization runs concurrent with the history of taxation. For as long as there have been forms of governance, there have been ways to levy taxes in support of them. No government works for free and every empire needs its roads. In the same breath, we can also say, as long as there have been systems of taxation, there have been those trying to undermine it.

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The Dutch Sandwich

Today, the practice of tax havenry has become a distinctly spatial practice. Increasingly instantaneous technologies of communication, complex international juridical structures, inter-governmental competition, and the lack of a supranational sovereign power contributes to making the practice of tax havenry a commonplace occurrence in the global business world. This practice is a derivative of the larger spatial logic practiced by contemporary multinationals, that of outsourcing. This logic understands business as a set of activities to be partitioned, understood separately, and optimized to the fullest extent possible in radically different, customized spaces. This logic allows for businesses to be physically located wherever they want, moving their legal and financial incorporation to nations whose juridical structures have been specifically designed to incentivize such behavior.

The tax haven exists at the extreme edge of globalization and international monetary flows, displacing national systems of taxation and decentering standard business practices. The tax haven can be thought of within similar systems of labor and capital displacement as the maquiladora, the special economic zone, and the territorial lease. The tax haven is the ur system that allows all of these spatial and political anomalies to exist. The tax haven is the extraterritorial enclave reduced to an address and a series of filings within a sea of paperwork sitting in the basement of a non-descript offshore law firm. The address is of course crucial to the entire equation. The tax haven is twinned with architecture and the two implicitly support each other. Capital needs an address to aim for, it needs a shelter. The territorial aspects and juridical inconsistencies are just as important as the filing cabinet and the mailing address.

Almost by definition the tax haven is a small territory, often either an island, or a nation that operates as an island. The Cayman Islands, Bermuda, Jersey, Luxembourg, and Singapore are all notorious tax shelters. But, in a way, so is the island of Manhattan and the City of London, that strange city within a city entirely claimed by London’s financial services industry. Each financial center is just one node within the global, decentered network of finance, banking, production and the services that maintain them. The tax haven is a well-worn trope within the public imagination, often thought