Kojo Koram: The Economic Legacy of Colonialism

In this episode of SystemShift, Kojo Koram sheds light on the impacts of Britain’s colonial past on our current economic model. He explains how the legacies of the British empire are not just symbolic or cultural, but are deeply connected to our economy, legal system, and political structure. Kojo looks beyond the mainstream culture wars debate around Empire and emphasises the material motivations behind imperialism – the extraction of resources from across the world to benefit the home territory of the empire. He challenges assumptions about former colonies’ inequality and insecurity, exposing the material motivations behind imperialism and the ongoing effects on contemporary capitalism. Through thought-provoking insights and examples, Kojo highlights how the British Empire, in particular, has laid the groundwork for contemporary capitalism, with its influence still visible in the English common law system and the financial centre of London.

Carl Schlyter:
Welcome to another episode of SystemShift, where we explore the latest ideas and how we can create a sustainable, thriving economy that puts people and nature at the center. Today we are joined by the thought-provoking Kojo Koram, a lecturer at the School of Law at Birkbeck University of London, who also writes extensively on issues of law, race and empire.

At a time when we need to avert the destruction of our planet is increasingly urgent, it’s clear that we must deepen our understanding of the underlying structures that have shaped our current economic system.

Kojo’s work brilliantly examines the impact of the British colonial past on our present day economic model, revealing the interconnectedness of race, empire and economics. His latest book, “Uncommon Wealth: Britain and the Aftermath of Empire” is a groundbreaking work that sheds light on how the forgotten stories of empire and decolonization continue to shape our daily lives worldwide. I really recommend that you read it.

By the mid 1960s, the British Empire, which over three centuries, eventually spanned a quarter of the globe, was winding down as former colonies assumed independence. Britain faced a dwindling of its global dominance. How could Britain retain its imperial advantages?

Kojo argues that the answer was simple, borders for people of the empire but not for the wealth of the empire. Kojo takes apart the assumption that former British colonies around the world fell into inequality and insecurity because of their own dysfunctionality. He reminds us that the legacy of empires is not just in statues and city squares or patriotic songs, but in trade and economics.

It’s about creating wealth for some and impoverishment for others. Kojo explains how British capital, debt and asset stripping continue to shape those countries, with the UK cultivating its reputation as a gateway to the world of offshore tax havens. He shows how decisions made as the British Empire crumbled are intimately connected to the inequality and insecurity that many of us are struggling with today.

Kojo’s extensive research offers a fresh perspective that challenges us to confront uncomfortable truths about exploitation of resources and people, encouraging us to think beyond  traditional economic paradigms and embrace innovative and inclusive approaches that address the root causes of inequality and environmental degradation.

Join us as we challenge the conventional wisdom and ignite hope for an economy that serves the well-being of people and the planet.

So without further ado, a warm welcome to Kojo.

The Impact of imperialism on present society

Carl Schlyter:
And so nice to have you here. And I was thinking, reading up on your work, you’re taught about empires and colonialism in school and you think that’s part of history. But it’s actually impacting us a lot today.

Kojo Koram:
Yeah, absolutely. I think that this is something that’s started to seep out of the academy over the last few years and much more into the public consciousness. Imperialism and legacies of colonialism aren’t kind of emblems of a long, distant past, but are things that are very present in our society in the current moment. I think that, particularly since the kind of global responses to the Black Lives Matter protests that we saw, with protests in every continent in the world, a lot of those protests also transitioned into demands around the way in which different countries confronted their colonial history.

This was very much the case in Belgium and Holland, in France, and also in the United Kingdom, where I’m from. One of the things that I wanted to kind of push the conversation forward in relation to a book that I published last year, which is called, “Uncommon Wealth: Britain and the Aftermath of Empire.”

This book really tried to show how, whilst the recent conversation has talked about the relationship between imperialism and the symbolic society that we navigate today; one of the statues in our public squares, one of what our streets and our roads are called, what our institutions are called, a lot about the kind of cultural and symbolic legacy of empire.

I wanted to connect it a lot more with the economy, with the way in which inequality continues to escalate in our current moments and the way in which we continue to consume and devastate the natural resources of the world, leading to the kind of environmental catastrophe that we’re facing at the moment. That kind of hard material legacy of imperialism and the way it influences our legal system, the way it influences our political system and the way it influences the structure of our economy is something that I don’t think have been discussed enough. I think that that’s an element that we’re starting to wrestle with as we face the kind of compounding crises of capitalism in 2023.

The root causes of colonialism

Carl Schlyter:
So you’re actually bringing back the debate about colonialism to the root causes and why it actually started. I mean, the Brits didn’t go around the world forcing people to read Shakespeare. They actually wanted to extract something from these countries normally.

Kojo Koram:
Absolutely. You know, we ended up, at least in Britain, really becoming quite obsessed in a kind of trivial culture wars debate around the legacy of empire, where the debate around empire was about what song or songs on the last night of the Proms. Should we sing Rule Britannia or should we not? TV shows are shown on the BBC. Should there be a cancellation of Fawlty Towers? Is that imperialist, is it not?

I spend the whole debate really thinking that nobody was motivated to get on a ship in the 17th and 18th centuries and sail across the ocean in order to share Fawlty Towers with people. Whether you want to like it or not this is not the driving motivation for imperialism. The driving motivation of the British Empire is as it is with all empires. There’s nothing explicit about the British Empire or the European empires. It’s the same for the Songhai Empire in West Africa or the Mongol Empire.The driving motivation for all imperialism is material. The desire to extract resources from across the world and transfer them to the home territory of the empire.

This is the real legacy of the British Empire that I don’t think that we’ve wrestled with significantly. Because what perhaps is significant about the British Empire, perhaps even more than its European counterparts in France and in Belgium, is that it really put in place the building blocks of modern day contemporary capitalism. The English common law system is still the system of law that so much corporate activity is navigated through. Even up until today. The City of London is still the center of finance for so many companies and so much wealth and asset transition, even up until the contemporary day.

This legacy of empire, I think, is something that can be ignored, perhaps by a deliberate attempt to try and make the debates about wrestling with a very real and very recent history of empire. I think a lot of the kind of culture wars debate about imperialism, made it seem like this is an issue just about plantation slavery and guys in the 17th century with redcoats and muskets running around shooting each other.

The reality is, formal colonization only ended in the latter half of the 20th century. You know, in the 1950s, 1960s and 1970s, these were the decades when places around the world were going through formal legal decolonization. That’s a very recent history that has very real impacts on the way in which our world works today.

Global capitalism’s response to decolonization

Carl Schlyter:
Because actually the material and economic parts of colonization actually didn’t end then either because these countries were indebted or had structures in place which extracted the wealth all the way until today.

Kojo Koram:
Absolutely. What I try to do when I talk about this is to really reframe our understanding of, first of all, what formal decolonization was. This process in the latter half of the 20th century, where countries like India, Jamaica, Nigeria, Kenya and Ghana went through the process of transitioning from being colonial subjects into being sovereign nation states.

All of a sudden, huge swathes of territory all around the world that didn’t have the ability to elect their own representative governments, and therefore, (in terms of the flow of capitalism around the world), didn’t have the ability to elect leaders who might be able to pass labor regulations or tax demands or trade policies that might interrupt the flow of capital across the world, suddenly could do that. They suddenly did have their own governments, their own heads of state, their own flags, their own anthems and their own ability to interrupt the flow of capitalism. That is a significant challenge to how capitalism functions, that occurs in the middle to late half of the 20th century.

What is the response of global capitalism?

I think that that is the key point to understanding so much of the inequality that wrestles with the world today. What I would argue in Commonwealth and I think if you look at the stories of decolonization, you can see this played out, is that following these countries winning their sovereignty, winning their ability to be able to control how assets move in and out of their jurisdiction, we had a counter revolution, a counter response.

This is the kind of deep story of neo liberalism that allows global capital to protect its interests against the potentially damaging challenge of these new sovereign governments around the world. That part of colonization, the ability to control the flow of financial assets around the world, is something that never went away and was in fact reinforced after formal decolonization.

How Britain used private corporations to run its colonies

Carl Schlyter:
And that was actually the root cause of the colonization in the first place. I mean, just look at Britain, for example, between 1815 and 1900, you had an enormous expansion of the amounts of sugar and coal and cotton that was imported to the UK . Actually, if you would transfer that to how much land that was exploited for this import, you arrive at the figure of 200 million hectares of land outside the UK that was used every year to feed the UK or its industry or its capitalists.That’s like eight times bigger than the whole country. This is an enormous amount of resources that was extracted. How come this could happen? How did Britain go about to actually create this enormous exploitation of the rest of the world? What made it possible?

Kojo Koram:
There are so many different elements because the story of the British Empire, despite the fact that this is something that’s actually not very well known in Britain itself, is one of the more remarkable stories in terms of the history of humanity. The British Empire is the largest empire that’s ever existed in human history in terms of territory, in terms of population and in terms of wealth, as you’ve just illustrated. That’s a history that, like I mentioned, came to a close very, very recently. It’s only 1997 with Hong Kong transitioning back to Chinese sovereignty. That’s seen as the formal end of the British Empire.

There’s, of course, a debate to see how much of that still continues. We can even talk about the role of British overseas territories. It’s essentially colonies by another name, even up until today and the role that they play in the offshore world, places like the Cayman Islands, places like the British Virgin Islands and more. I hope to return to that conversation a little bit later.

In relation to how Britain expanded all across the world and became so dominant, one key element in terms of understanding how capitalism works today that we need to hold onto when we think about the British Empire, is remembering how much of the British Empire wasn’t actually administered and advanced by the state, but was pushed forward by a conveyor belt of private corporations.

This is something that really pushed the British Empire ahead of some of its European rivals, like the Belgian or the French empires, which were more state based projects unlike the British Empire. Much of the kind of dirty work of imperialism was done by the Hudson Bay Company in North America or the Royal Niger Company in West Africa -that founded Nigeria- or the Royal Africa Company before that. You might think of the Levant company. You might think of the Anglo-Iranian Oil Company. Of course, you have to think about the company that historians still consider to be the largest multinational corporation to have ever existed, even in the current age of Amazon, Google and Wal-Mart. Of course, I’m referring to the East India Company, which was the de-facto sovereign for the Indian subcontinent, stretching all the way to having a monopoly on the trade in China. It was probably the largest corporation and definitely the most historically influential corporation in the history of capitalism.

These companies show the intertwining between the interests of corporate capitalism and the interests of British imperialism, which really helped put in place the building blocks for the world that we have today, where all these multinational corporations seem like they are essentially unaccountable to the pressures of mass democracy.

The nature of Britain’s private colonial corporations

Carl Schlyter:
Look at the East India Company, for example, they had actually twice the number of soldiers as the UK army had. These were not just companies, they were chartered companies that actually got a lot of power from the state, policing even law implementation and having a military, for example. These (companies) were given enormous power and what did they use this power for?

Kojo Koram:
Absolutely. These essentially private companies were de facto sovereigns in huge swathes of the territory for the Hudson Bay Company in North America or the East India Company on the Indian subcontinent. They undertook tasks which nowadays we think of as the preserve of governments. They arrested and convicted people. They collected taxes, they waged wars, as you mentioned, with the size of the military that they were able to employ and they were key actors in significant historical events.

Think about the role of the East India Company in something as dramatic as the Opium Wars that’s often seen as a war between Britain and China.But in fact it’s the interests of the East India Company, which had the monopoly over the trade of opium in China, that really drove the conflict. Its subsidiaries included several companies that are significant actors in the global economy, even up until today.

The way in which these companies were formed, which as you mentioned, required a royal charter in order to come into existence. Prior to the Registration Act, you couldn’t just register a company like you can do now. You needed the grant of the state in order to come into existence.

That kind of careful relationship between the British state and these ostensibly private companies is very much in existence at the very origin.

The fact that they were private companies did a couple of things. First it allowed them to operate without the same obligations that a state has in terms of its international relations. It also played a crucial role historically in shielding the state from the crimes and moral judgments of a lot of the issues that happened in these colonies. And so the story of the British state, the history curriculum that we all learn in Britain, is an internal story of Britain, of the Tudors and the Gunpowder Plot and the World Wars.

It’s not the story of what happens in India or what happens in Iran, because that’s the story of the East India company. What happens in Iran is a story of the Anglo-Iranian Oil Company that’s somehow outsourced from the national narrative. I think that has a great role in facilitating the amnesia we have about the (British) empire. Even up until today.

What happened to these companies after decolonization?

Carl Schlyter:
This amnesia is so strong. We see a reemergence of this tactic in Iraq, for example, after the invasion, where you had private subcontractors running security and other operations full of human rights violations, but you could also then blame the company again.

Kojo Koram:
Absolutely. This kind of dual, revolving door that we see between the interests of the state and the interests of the companies plays such a crucial role in understanding how so much violence and so much damage continues to be facilitated even up until today. When we want to talk about the aftermath of the empire and the way that this continues to influence our world today, I think we really want to wrestle with this question of what happened to these companies after formal decolonization?

To be crude about it, one of the great benefits of empire was that these companies could operate across multiple different territories, but under one jurisdictional umbrella. If in the 19th century you operated from Hong Kong to India to London to Jamaica to the Cayman Islands, you operated under the umbrella of the British Empire. Once you have decolonization and all of these places start to get their own governments and their own potential ability to interrupt your business interests, you now exist under four or five, six or seven different jurisdictions.

Thus, what is the response of the interest of private corporations to this potential threat?

We look at the story of the Anglo-Iranian oil company and its response to the election of  Mohammad Mosaddegh in Iran in the 1950s as an example of how these private corporations were protected from the dangers of mass democracy, particularly in the former colonized world.

That helps create the world that we have today, where so many of these companies appear to be on the reach of accountability, not just for democracies in the Global South, but potentially even for democratic will in the very heart of the empire, places like the United Kingdom, places like the United States, where they first emerged.

The Anglo-Iranian Oil Company, the UK & the US in Iran

Carl Schlyter:
Hang on there, because maybe not every one of our listeners is familiar with the story about the Anglo-Iranian oil company. I mean, many of these old companies, they actually are still alive today, like Unilever started off with the Lever Brothers in Nigeria and the Niger company, and then British Petroleum has its origin and Anglo-Iranian Oil Company. So many of these colonial pasts have just been transferred to the modern company.

So let’s stick to Anglo-Iranian Oil, where a private individual or company got the right to, for 60 years, have the sole right to explore oil and large swaths of land in Iran. And then Mosaddegh had a democratically elected government who wanted to say, listen, we want some of the profits. When they refused, they (Iranian government) just nationalized the company, offering 25% of the profits as compensation.

But how did the UK and with the help of the U.S. then respond to this like the Iranian people, the Persian people wanted to have the wealth from their lands also to themselves and not only to be exported. What was the reaction by the UK and the US?

Kojo Koram:
So this is a one of the crucial stories of the kind of postwar world that isn’t known well enough, particularly in the United Kingdom, despite it being the main actor in this whole.

Carl Schlyter:
Maybe that’s why.

Kojo Koram:
Absolutely. But like you mentioned, the Anglo-Iranian Oil Company started by William Knox D’Arcy at the turn of the 20th century, enjoyed the monopoly over the cultivation of oil in the region that Britain then called Persia. This was part of Britain’s kind of informal empire, places like Argentina, places like China in the world with the economic dominance of the British Empire. And the Anglo-Iranian Oil Company profited from that very well.

They always had this kind of cozy, intimate relationship with the British state, even supplying the oil for the British war efforts in the world wars. There was often a revolving door between executives of the Anglo-Iranian Oil Company and ministers of parliament. And this is going to be crucial for the story of what happens following the Anglo-Iranian oil crisis.

But as you mentioned, there was the election of Mohammad Mosaddegh in Iran, who was a kind of social democratic prime minister who sought to use the wealth from the oil refineries in order to fund essentially a welfare state in Iran; housing, welfare, schooling, education. When he’s unable to renegotiate the terms of the very exploitative deal that they have with the Anglo-Iranian Oil Company, he uses those powers of sovereignty in order to nationalize those oil refineries and to claim that ultimately the oil is on the land of Iran. As the democratic representative of the Iranian people, they had the right to use that oil in the way that they see fit.

Now, what’s really crucial about this story is who the government was in the United Kingdom at this time. The government in the United Kingdom at the start of the Anglo-Iranian oil crisis is the government that’s nowadays canonized as probably the most progressive government in English history. The Labor government of Clement Attlee, and most crucially, the Labor government that created the welfare state themselves, created the NHS, building of council housing, expansion of welfare provisions. Maybe most crucially for the story, the government that nationalized huge swathes of their own economy in order to fund their own welfare state.

You might think, looking at those facts on the table, that there will be some understanding from the Attlee government  to the project Mosaddegh was trying to advance in Iran, but this was not the response of the Attlee government. They very much had that kind of blindness of a lot of those postwar British governments where they tried to have a social democratic welfare state at home, but continued imperial exploitation abroad. And so they threw their weight entirely behind the Anglo-Iranian Oil Company.

First they sought to get a UN Security Council to wage war on Iran for the crime of having expropriated the properties of the company. That failed. Then they took Iran to the ICJ, (the recently created International Court of Justice), in order to try and declare Mosaddegh’s act illegal. The ICJ turned the classic British dual step of privatizing and outsourcing its imperial interests against Britain. The ICJ essentially said, well, this is a court set up to settle conflicts between two nation states. This is not a conflict between two nation states, it is a conflict between one nation state, Iran, and one private company, Anglo-Iranian Oil Company. Even though we know there was much more intertwinement between the state and the company, the ICJ said, no, you always say that these companies are separate from the state. We’re going to take you at your word and say this isn’t within our jurisdiction.

And so with all kind of legal routes exhausted, unfortunately the British government, (then replaced by the second Churchill government), and as I mentioned earlier, this is significant because Winston Churchill was once a paid lobbyist for the Anglo-Iranian oil company. So that revolving door becomes very clear and also illustrates how across the different political traditions, -whether it’s the left or the right- there was a unified commitment in the British state towards protecting the interests of their colonial companies.

The Churchill government continued the aggressive policy of the Attlee government, and they were successful in basically convincing the Eisenhower administration in the United States that if Mosaddegh was allowed to do this; he would lead to a wave of communism spreading across the Middle East and North America. 

The United Kingdom and the United States collaborated in a coup d’État. Now we know, codenamed Operation Ajax, which removed Mosaddegh from power, placed him under house arrest until his death and put in place a new prime minister who was much more agreeable to the interests of the Anglo-Iranian oil company, and returned to them their oil refineries.

As you illustrated at the start of that question, that’s most significant for understanding how our world works today, because the Anglo-Iranian Oil Company did not disappear with the end of colonization. They did think that a coup d’État was a little bad for the brand name. You know, it’s not really good for any kind of corporate reputation. And so it was time after the Anglo-Iranian Oil crisis for a bit of a rebrand, and they then became first British Petroleum and now most commonly known as BP.

And that’s significant for understanding our world today because when we look at the current energy crisis that so many people are wrestling with in not just the Global South, but even in the United Kingdom as well, where huge swathes of the population are unable to pay their heating bills, are wrestling with choosing between heating their homes or feeding their children. We have BP recording record profits year after year and saying that the energy crisis has turned their company into a cash machine.

When we think about the role that they play in the contemporary energy crisis, as well as some of the environmental impacts that BP has had, (think about the Deepwater Horizon disaster, for example, one of the largest environmental disasters on record, the oil spill in the Gulf of Mexico) we can go back to that moment of the confrontation between the Anglo-Iranian Oil Company and the Mosaddegh government and think about whether the world, even places like the United Kingdom have really benefited from the decision of the British government to protect their colonial companies against the democratic will of people in the Global South, in this case, Iran.

An energy crisis amid record profits

Carl Schlyter:
Yeah, I mean, if you talk about not only BP had record profits, you see most of the oil companies actually had record profits last year. You have that at the same time as you have an energy cost crisis for normal people. And you see also that in the last quarter of 2022, you had a significant increase in corporate profits in general, while they are pushing back on salaries being on par with inflation, saying if you have your salaries according to inflation, you will have an even worse inflation story. But actually a larger and larger part of corporate turnover has turned into profits for the people owning them.

So this inequality you see here is aggravated and the energy crisis is more a crisis of extreme greed rather than actually energy crisis, I would say.

Kojo Koram:
Absolutely, and we can see that that kind of protection that the state gave to the colonial energy companies in the Anglo-Indian Oil Company isn’t wholly removed from the protection that the state has given to these energy companies in the midst of this energy crisis, where there has been demands for really aggressive windfall taxes on these profits that these companies are making but states have been very reluctant to really roll out and implement.

We can think about the way in which companies like BP have often been cited as one of the largest tax avoiding firms that operate within the British jurisdiction, often getting a tax rebate from the state despite these record profits being registered.

And so when we think about that moment where there was this confrontation between, say, the colonial sovereignty from these newly elected governments in the former colonies and the interests of the corporate companies who did so much to profit from the (British) empire. We think about that moment of confrontation, we can really think about what would have been in the interests of creating a more equitable, sustainable world. Would it have been to support these colonial corporations, and we’ve seen how that’s played out over the subsequent decades, or would it have been to try and allow all people around the world to have that ability to create the type of economies that they wish through the election of their own sovereign governments.

Link between the protection of colonial corporations and poor social democracy today

Carl Schlyter:
To clarify this statement here, do you think there’s a clear link between the colonial logic in protecting the oil companies and the lack of progress on changing our energy system? Do you see a link?

Kojo Koram:
Absolutely. Not just changing our energy system, but also the kind of disintegration of the entire edifice of social democracy in places like the UK. This is very acute. There’s been a real collapse of that postwar consensus welfare state that the Attlee government did so much work to build in the United Kingdom.

I often use in Uncommon Wealth this analogy, that the Attlee government in trying to create a welfare state, (a state where corporations have to exist in relation to the demand of the mass democracy at home, whilst allowing them to be as aggressive as possible in the colonies) is almost like having a dog and saying to the dog, I want you to behave in the house, I don’t want you to bite the kids, don’t tear up the sofa. But when we go outside of the house, you can bite anybody’s kids, you can destroy the bins, and you can act as wild as you want. And then being surprised when a couple of decades later you have a dog that’s tearing up the sofa and biting the kids inside your own house.

And this is very much, I think, what the Attlee government tried to do by taming the aggressive corporate profiteering at home was allowing it to run free in places like Iran, is they put into place the building blocks for the erosion of the very welfare state and very system of equality that they were trying to create in places like the United Kingdom.

The full Impact of tax havens

Carl Schlyter:
Just a reminder of the current links still today. Some figures are a bit older from 2007 but anyway, the EU, including UK, the US and Japan, the annual average net influx to our part of the world is 12.6 gigatonnes of raw materials, 34 exajoules of energy, 560 million hectares of land exploitation and 247 million work years every year being exploited and used to our part of the world, to the small part of the world.

So these processes are still very much ongoing, but using the neoliberal logic of exploitation and a crucial part of that I think you mentioned before, is the tax havens. I think let’s go there because that’s a key part of this colonialist logic and it’s not new. It’s over 200 years old.

Kojo Koram:
Absolutely. So, you know, one of the focuses that I put in Uncommon Wealth is on the aftermath of empire being attached to the financial and legal system that dominates our world today. At least in terms of the British story, it’s not a coincidence that according to the Tax Justice Network, the top three corporate tax havens in the world, all just happen to be British overseas territories. Which is essentially a fancy word for a colony for they were colonies in the era of imperialism and then reframed their branding to British overseas territories.

Here we’re talking about the British Virgin Islands, Bermuda, the Cayman Islands, and also think about places like Guernsey and Jersey. A lot of these Crown dependencies have really become the centers of what is known as the offshore world. The world in which global capitalism and wealthy individuals and profitable corporations can hide their assets and their profits outside of the purview of sovereign governments and the tax demands that they might place upon them.

We use the word tax havens, and I think that is useful for illustrating just how much money is being lost in these corporate tax havens, protected, sheltered from being redistributed to create a more equitable society every year. But the idea of a tax haven, is kind of a simplification of what these offshore centers actually do, because they influence our world in so much more than simply hiding money that should be taxed. 

They also allow wealthy individuals to be able to continue to own assets and to have interests and assets whilst maintaining a veil of secrecy. That kind of secrecy protection that they provide is just as important as their ability to not allow you to be taxed. The fact that you can be an owner or have an interest in property or in particular companies and not have to be declared if those properties are registered within these jurisdictions. It also allows people to use the wealth that they have in these companies to be able to then drive up the costs of assets in all countries around the world, even somewhere like the United Kingdom, which is seen as supposedly the home of this offshoring world.

We know that over 100,000 properties in the United Kingdom, residential properties I may stress, are purchased through the vehicle of offshore companies.This is a way in which some of the very wealthiest people in the world are able to drive up the price of the most secure human need that we have. The need for housing drives that up and beyond the affordability of everyday people in the United Kingdom. This is part of the reason why if you’re a teacher, firefighter, a nurse, or even a doctor in cities like London, you cannot afford the price of housing in the 21st century. You cannot afford to buy a house and to have some security for you and your family. The way in which these offshore centers have been used to drive up the price of assets is something that we really have to wrestle with if we want to create a more equal society.

The Cayman Islands and the Eurodollar market

Carl Schlyter:
For listeners who want to know more about asset inflation and how that is interlinked with the current monetary system and financial systems, you can listen to the episode with Ann Pettifor where we talk about money generation and debt creation, and how that works with the private banking system.

I’m thinking, listen to you now, it’s actually not only tax havens. They are human rights abuse financing havens, they are illegal weapon deals havens, they are criminal drug networks havens. They are the vehicle that makes it possible to extract profit from all unethical behaviors on the planet. I mean, one building in Cayman Island has 18,000 companies, according to Obama. That’s absurd. That’s clearly not a serious business.

Kojo Koram:
Absolutely. I think that we can’t really understand the emergence of the so-called offshore world without connecting it to shifts in the onshore world, as we might describe it, which is, of course, the shift towards decolonization. We take the Cayman Islands, for example, the Cayman Islands during the era of British imperialism, was not even governed as an independent colony.

It was governed as part of Jamaica. It was seen as so insignificant to Britain’s colonial interests in what was then called the old British West Indies.

But with Jamaica gaining decolonization in the early 1960s, the Cayman Islands split off from Jamaica and started to become this new focal point for this offshore world. It started to pass its own constitution and its own Companies Act that invited companies from around the world to register their interests in this territory underneath that veil of secrecy, that we mentioned a little bit earlier, and also, as we get the city of London, become the Center for Offshore Finance through the development of what’s known as the Eurodollars market.

The Eurodollars market was dollars that were outside of the jurisdiction of the United States that wanted to be protected by banks, despite the fact that this was essentially in contravention of the Bretton Woods regulations that have been implemented. The city of London, using that network of imperial finance accumulation, becomes the center of the Eurodollars market and then the ultimate place of protection for these offshore dollars that were building up in the city of London to really be protected was to these emerging offshore centers, places like the Cayman Islands and then the British Virgin Islands, Bermuda and other territories in the old British West Indies.

These places remain British overseas territories today, which means that they are not independent countries, they are not different countries from Britain, even though we often talk about them as though they are. We often say, all these companies are registered in the Cayman Islands. These are these remote tropical paradises, you know, who could do anything about them?

But we know that the British government, which has ultimate sovereignty over these territories, can intervene in overseas territories when it wants to. We can just ask the people of  the Chagos Islands how it can treat its overseas territories.

The entire population there was expelled in order to build an American military base. And so, thinking about the interests of the 21st century, I would say that if the British government is able to expel an entire population from its overseas territories in order to create a military base, it can intervene in these offshore financial centers in order to allow for greater transparency and greater accountability for the operations that exist within these jurisdictions.

Can the UK government abolish overseas tax havens?

Carl Schlyter:
So if we would have a UK government that wanted to abolish these overseas tax havens, that are under their jurisdiction, would that be possible? And how would they go about it?

Kojo Koram:
Absolutely, ultimately so despite the fact that they have a kind of an independent governor and there are legislative councils that allow them a certain amount of autonomy, especially in relation to internal jurisdictional issues. Ultimate sovereignty in British overseas territories continues to reside in Westminster in terms of foreign policy and in terms of who makes the final decisions if they really want to. I think the history of the Chagos Islands shows they can intervene in these areas when they want to. They’ve also intervened in the Turks and Caicos Islands very recently as well.

And so if they wanted to force greater transparency and greater accountability in these territories and to force them to agree to something like the global minimum tax rate campaign that’s being advanced by a number of countries all around the world, not just countries in the Global South, who’ve been pushing for greater accountability for these tax havens, but also now even places like the Biden administration in the United States, the United Kingdom government could push that forward. But that’s not something that we’ve seen a great appetite for by successive British governments over the past few years.

Carl Schlyter:
But then these territories are actually exploiting the power of the British administrative legal system to do their business. And the UK actually is not using its power to defend the public interest and the interest of the environment and non exploitation.

Kojo Koram:
Absolutely, you know, the key selling point of these overseas territories in the aftermath of decolonization was saying to all of the asset holders that were fleeing the colonies because of the shift towards decolonization, because now you have native governments, local governments that might be able to hold them to more accountability than the former colonial governments had done. These asset holders were fleeing areas like Ghana, Kenya, all of these territories, Nigeria, and were looking for a place to leave their assets.

What the overseas territories were able to do to attract them was to present them as somewhere that was both in the United Kingdom and outside the United Kingdom at the same time.

And so was in the United Kingdom because it had the access to the legal experts and financial experts of the City of London because it operated within the English common law system, because it had all of the refinement of the classic British West Indies, but it was also outside of Britain and outside of the decolonized world in terms of its not subject to mass democracy.

It’s not going to have your assets be seized by a government that’s been elected by a popular movement or a strong labor movement, and that’s looking to expropriate resources in the way that Mosaddegh, coming from a role of the state around the world. And so that inside and outside, position towards the British state has really been exploited by places like the Cayman Islands and the British Virgin Islands for their own benefit, but not for the benefit for the sustainability and equality of the rest of the world.

How can we unify against this logic of exploitation and destruction?

Carl Schlyter:
When I listen to you, I have this uneasy feeling that from slavery where we exploited people and brought them under our jurisdiction, and when we had colonialism, where we actually managed other countries or had outsourced chartered companies to manage other territories, we now have a neoliberal exploitation following exactly the same logic exploiting people, but using financial means and debts and trade agreements and intellectual property rights. So this endless exploitation of people and the planet and the worldviews that permit that.

If we want to fight this, how can we unite? Because now there are conflicts between different groups in different countries, between different groups and minorities in each country.

How can we unify against this logic of exploitation and destruction?

Kojo Koram:
Yeah, I mean, this question of how do we create a unified transnational opposition towards this kind of aftermath of imperial financial interests is really the question that drove me to create and to write Uncommon Wealth as a book.

I felt that the debate around decolonization, not just in Britain but I think across the West, is starting to become very divisive and it started to become very us versus them. And it’s a lot to do with a kind of imperial guilt and privilege. And it started to pit different exploited groups against each other.

I felt that this was doing the work of the imperial aftermath for it, in terms of if you’re saying to working people in, say, the north of England, whose heating bills are escalating beyond their ability to pay, well, as a company like BP enjoys record profits for their in opposition to people in the Aberdeen region of Iran or these other territories in the Niger Delta, where these oil companies are accumulating huge amounts of wealth from mining oil from those territories.

If you say that those two groups of people are in opposition to each other, the only people who benefit all the oil companies, when in fact I think what kind of material understanding of the aftermath of empire shows us is that the same systems of exploitation are worsening both of their lives.

Now, of course, there are differences, it’s more acute if you’re in the Niger Delta and you are being removed from your lands and you’re facing paramilitary organizations, kidnapping labor movement leaders and leading to people’s real death, you know, that’s perhaps more extreme than if you’re unable to pay your bills and unable to feed your children in the north of England or in the post-industrial world in the West.

But it’s the same process, the same system that’s damaging both of your lives, helping people understand the importance of learning about history as empire and the history of decolonization in the West isn’t to show that you’re a good person and to be like, look how good I am, I’m learning about what’s going on in these other countries to be morally superior. It’s to understand the system of exploitation that is going to be coming for you in due course.

I often say in the book this idea that what happened in the aftermath of empire in the colonies happened there first and worst. But it did put in place the building blocks for a lot of the issues that we’re wrestling with even now in the very heart of the former imperial world, the United Kingdom, in 2023.

Carl Schlyter:
So how can you integrate this with the environmental struggle, with the social struggle and unite people? Do you have any ideas about how we could go about it?

Kojo Koram:
Absolutely. I think it’s about, making people realize that this kind of apocalyptic challenge of, the climate crisis that we’re facing and wrestling with, the significance of the planetary damage that we’re doing to the only sustainable planet, that we know that can maintain human life, is something that isn’t just the problems of mothers in Bangladesh or, people of the Gulf of Guinea who might be at the forefront of this crisis, that this is going to be an issue for people even in London and Washington and Berlin and Paris, who might consider themselves quite protected and isolated from this crisis at the moment. But those same systems, the planetary devastation is going to impact them. It’s also going to be a driver of that human catastrophe as well.

These crises are interlocking the polycrisis of migration crisis, of economic crisis, of climate crisis, all of them are connected with each other, and all of them are going to have to be faced by all of us wherever we live very shortly. I don’t think we can face them without unpacking and delinking ourselves from the aftermath of imperialism.

Steps & actions you can take

Carl Schlyter:
So let’s say a listener has been listening to you today and they feel, yes, I agree with this worldview, the analysis of the empire, and I feel very motivated to go ahead and take action and do good stuff. So what else than demanding the abolishment of the tax havens could you do?

Kojo Koram:
I end the book by really illustrating a lot of immediate, tangible changes in terms of unpacking the aftermath of this legal and financial legacy of empire that could be demanded.

This is more relevant to perhaps the British context and British legal system, but maybe has relevance to other countries in that jurisdiction. I think one of the dangers of the decolonization debate is that it was becoming increasingly abstract. We would talk about decolonizing our mind, decolonizing our perspective, decolonizing our ideas. And this is all significant and really important, but something that could be demanded by individuals in places like the United Kingdom is the removal of something like the non-dom tax status.

So the non-dom tax status, which has been in the news recently because of its relationship to Rishi Sunak, is a tax status that benefits the wealthiest people in the country and it is a direct hangover of the aftermath of empire.

It’s one of the reasons why UK has this idiosyncratic tax status is that it was put into place in 1799 when William Pitt tried to bring in the income tax to protect those who had properties in the colonies from not having to face that income tax and to continue to encourage that imperial entrepreneurialism. This status could be removed by the government tomorrow, and that could help create a more equitable world.

Carl Schlyter:
And for countries that don’t have that specific maybe like a wealth tax or other taxes on property would be an alternative.

Kojo Koram:
Absolutely, also thinking about going back to the story of the  Anglo-Iranian Oil Company and the protection the multinational corporations received in the aftermath of decolonization. This was a quite crude protection in that story in terms of a coup d’état. But over the following decades, it starts to become a little bit more sophisticated with things like structural adjustment programs, conditional loan agreements, the use of odious debt, the use of investor state dispute resolution tribunals. A lot of these legal tactics could be abolished.

You know, the debt impact was devastating sovereign governments around the world and stopping them being able to pass laws that are in the interests of their people, not in the interests of global corporations, that could be removed and that could be abolished to create a more equitable world. And so policies like this are issues that individuals and groups could mobilize and organize around and start demanding. I think that could help us lead to a more sustainable world in the future.

Carl Schlyter:
Well, thank you so much for this talk. It was really interesting. I hope many of our listeners got some new perspectives and some new thoughts about our history and our future and how they’re interlinked. So for this, I’m very grateful. Thank you so much Kojo.

Kojo Koram:
Thank you so much for having me Carl, it’s been a real pleasure.

Kojo Koram is a lecturer at the School of Law at Birkbeck, University of London, who also writes extensively on issues of law, race, and empire. His latest book, “Uncommon Wealth: Britain and the Aftermath of Empire” is a groundbreaking work that sheds light on how the forgotten stories of empire and decolonisation continue to shape our daily lives worldwide.