Capital Without Borders: Wealth Managers and the One Percent

by Brooke Harrington

"A timely account of how the 1% holds on to their wealth...Ought to keep wealth managers awake at night."
--Wall Street Journal

"Harrington advises governments seeking to address inequality to focus not only on the rich but also on the professionals who help them game the system."
--Richard Cooper, Foreign Affairs

"An insight unlike any other into how wealth management works."
--Felix Martin, New Statesman

"One of those rare books where you just have to stand back in awe and wonder at the author's achievement...Harrington offers profound insights into the world of the professional people who dedicate their lives to meeting the perceived needs of the world's ultra-wealthy."
--Times Higher Education

How do the ultra-rich keep getting richer, despite taxes on income, capital gains, property, and inheritance? Capital without Borders tackles this tantalizing question through a groundbreaking multi-year investigation of the men and women who specialize in protecting the fortunes of the world's richest people. Brooke Harrington followed the money to the eighteen most popular tax havens in the world, interviewing wealth managers to understand how they help their high-net-worth clients dodge taxes, creditors, and disgruntled heirs--all while staying just within the letter of the law. She even trained to become a wealth manager herself in her quest to penetrate the fascinating, shadowy world of the guardians of the one percent.

Genres: Nonfiction, Economics, Finance, Politics, Sociology, Business, Money

400 pages, Paperback

First published January 1, 2016

About the author

Brooke Harrington is Associate Professor of Sociology at Copenhagen Business School, Denmark.

Reviews

[Emma Sea · Rating 4 out of 5]

Entirely fascinating, and very, very depressing. Excellent writing and well-referenced. This might be an academic study, but it's clear and engaging. I found chapters 5 (the implications of wealth inequality) and 6 (the relationship between wealth managers and nation-states) particularly engrossing and pertinent.

Recommended.

[Charles Haywood · Rating 3 out of 5]

I read “Capital Without Borders,” a book on wealth management, because I wanted a “how-to” book. How could I, were I to become adequately rich, maximize my wealth by using methods available only to the knowledgeable and connected? Unfortunately for my purpose, “Capital Without Borders” doesn’t delve deeply enough into the precise mechanics of wealth maximization to be a useful “how-to” book. But it does contain a wide variety of interesting insights into the world of the new globalized elite, citizens of no country who completely lack positive feeling and loyalty towards their native lands. These insights are the book’s real value.

I ordered this book when I read an article on Harrington’s research in The Atlantic. She is a professor of sociology. When deciding to focus on wealth management, she early identified that the profession was insular, secretive, and not likely to have its practitioners give up its knowledge to an academic who contacted its members out of the blue. Therefore, she went to the trouble of obtaining what is “the accepted global standard for practitioners, the TEP, or Trust and Estate Planning certification,” issued by the London-based Society of Trust and Estate Practitioners (STEP). TEP is a “two-year wealth management training program,” which she earned under her own name, not concealing her purpose of publicly analyzing the wealth management profession. Through this, she both learned the details of wealth management, and, more importantly, met and was able to get to know and interview numerous individuals around the world who earn their living in wealth management (who are quoted using pseudonyms). This is a very impressive accomplishment and gives the reader a high degree of confidence in the book.

Harrington begins by conveying an understanding of wealth management as a profession, with its roots, at least in myth, beginning in medieval stewardship. As with other professionals, a professional code buttressed by fiduciary duties creates a high level of cohesion, loyalty, prudence, and an ethic of “selfless service.” She also discusses the social and personal characteristics that tend to typify wealth managers. Harrington sums up, “As trusteeship emerged in response to the feudal state, wealth management is an outgrowth of the supranational space created and inhabited by the world’s wealthiest families.” “The new norm is to hold a wide variety of assets—many of them globally mobile and fungible—in multiple jurisdictions in a complex of financial-legal structures.” Quoting a Cayman Islands wealth manager, “High-net worth individuals are all pretty similar to one another—they’re a pretty global bunch, with a lot more in common with each other than with people in their own countries.” I will return to this theme of supra-nationalism, or rather exo-nationalism, because I think it is the core insight of the book.

Harrington spends about 40% of the book outlining the wealth management process. She discusses basic types of structures used to protect wealth: trusts, foundations, and corporations, noting (to my chagrin), “There are many more possibilities for achieving these aims than can be explored within this [book].” Harrington notes the three basic threats against which protection is desired: developing world political instability; first-world regulation and taxation; and family conflict (reading about the families who use wealth managers, one gets the impression that their lives aren’t very pleasant). She discusses how the goal of wealth managers is primarily to protect wealth, but that the structures used, in the normal course, allow wealth to grow more reliably than the wealth of the non-rich, since the wealth is more protected from erosion normally resulting from taxes and other liabilities, and in addition lucrative investment opportunities exist for the wealthy that are not available to the normal person. All of this is interesting, well-organized and well-written, though there are few surprises and nothing concrete that could not be obtained from casual reading on the Internet (but the direct quoting of wealth managers adds considerable flavor).

The last third of the book is an extended discussion about wealth inequality, with a focus on the role of wealth management in its creation and perpetuation. Harrington treats wealth inequality as self-evidently bad, and is especially exercised by the inheritance of wealth and therefore the ability, using the techniques of wealth management, to prevent wealth’s otherwise inevitable dissipation within a few generations. Her objection is that wealth should not be durable over time, because “inequalities become stabilized, interfering with the processes of meritocracy and individual achievement that underpin the kind of thriving capitalist democracy Tocqueville described.” She cites Rousseau, Mill, and Bentham in support, and (bizarrely) caps it by approvingly citing the “Communist Manifesto” on inheritances (perhaps she should cite “Mein Kampf” as well?). This is a standard utilitarian perspective—money is fine, even lots of money, as long as you earn it yourself, but money should be mostly confined to its earner, not his descendants, and money has nothing to do with the creation and maintenance of a virtuous and effective ruling class.

Although Harrington quotes the largely discredited Thomas Piketty entirely too much, and fails to consider any but left-wing and utilitarian theorists, I think few would disagree that wealth inequality in America is significant, getting more significant, and is a more important structural problem than income inequality. There is fairly rapid turnover in who is at the top in income, but there is little turnover in wealth. Income inequality still gets all the attention, because it is much easier to identify and quantify. But George Soros would still be an obscene blight upon the world if his income dropped permanently to zero (although, for all our sakes, likely “permanently” for him will not be a long duration from now).

As Harrington says, “wealth captures far more [than income] of what matters conceptually about inequality, such as life chances, access to education, job market opportunities, and political power.” And, despite what the Republican donor class and establishment conservatives want us to believe, it is undoubtedly true that American mobility in both wealth and income is bad and getting worse. Yes, median American wealth has risen, and even the poor are objectively much better off than even a few decades ago, but relative wealth is still important for social comity, and perceived impediments to self-improvement—the perception, at least partially true, that the upper crust has pulled the ladder up—are especially pernicious (although it’s a fair question, which Harrington does not ask, whether we could have this overall increase in everyone’s wealth without increased wealth inequality).

But there is a highly respected alternate view of concentrated, long-duration wealth with which Harrington seems mostly unfamiliar. A Burkean conservative (admittedly a minority in America) does not necessarily object to accumulations of wealth, and their transmission through the generations. In this view, long-term social inequalities, including of wealth, are not only inevitable—they are highly desirable, for they lead both to better government by those raised to higher station, and to social institutions that prevent tyranny, both of the government and of majorities. Harrington does nod to this view with a complaint that modern wealth management has resulted in “the decline of the ‘old money’ ethic among the rich,” with its” sense of obligation to public service and to model civic behavior.” But otherwise she simply treats wealth inequality, and especially concentration of wealth in families, as necessarily being a great evil.

In any case, Burkean theoretical rationales notwithstanding, Harrington is certainly right that today’s wealth inequality is bad. Not because it’s inherently bad. Rather, it’s bad because we do not have a Burkean ruling class, or a ruling class with any Burkean elements. Instead, we have the low, cunning character of the exo-national ruling class in which wealth is now concentrated, typified by the globalist and materialist Davos ethic. These are those who are served by the wealth management profession. The wealthy who appear in this book, seen through the lens of their wealth managers, are not a Burkean class, bound by duty to their country and its service, focused on educating and bettering themselves to perform their duty. Instead, they are parasites of no country, slithering through the legal cracks of the nations they regard not as their mothers, but as their pawns and slaves. They are our ruling class, and they are a blight that has brought low the cultures of the West, mandating self-hatred and contempt for any traditional value or culture. They are best exemplified by the attitudes held by the unelected rulers of the European Union, and by the desperate desire of those such as Angela Merkel to deliberately destroy their own cultures by admitting millions of alien migrants, to whom wealth and power are given and from whom nothing is demanded, least of all any adherence to the traditional culture and morals of the nations who are forced to accept them. (It’s not just the West, either—Harrington explains in several places how wealth managers actively undermine traditional Islamic moral values in the service of Muslim clients. The new global elite hates any system of morals, especially one rooted in a particular culture.)

Harrington notes that “By detaching clients from allegiance and obligation to any particular state, wealth managers weaken those individuals’ need (and perhaps willingness) to submit to any laws, anywhere. As social scientists have known for generations, being a law-abiding citizen depends on a sense of membership in a collective. From that group membership comes acceptance of and adherence to rules: ‘a sense of rights and obligations derived from an identity and a membership in a political community and the ethos, practices and expectations of its institutions.’” Harrington here equates “rules” with “a sense of rights and obligations.” But that is a false equation. “Rights and obligations” are much broader than rules; they imply a Burkean duty to one’s own. Wealth managers, despite their fiduciary service ethic, using modern tools focused on offshore finance not existing prior to the modern era, undermine the social basis for societies around the globe, creating an atomized, disloyal, malice-filled global elite, whose destruction should be a priority of right-thinking people in every country.

Unfortunately, Harrington doesn’t focus on any of this, though it is implicit in the facts she relates and she does mention how political systems can be captured by elites. She is a statist. She views the world through the prism of the state as an independent actor to whom loyalty is owed. The problem for her is that wealth inequality harms the state, undermining the Westphalian system, not that it harms individual nations or their people. But a state itself has no claim to loyalty; it is merely the servant of the nation, and, for the most part in the modern world, a parasite equally as worthy of forced diminution as the global elite themselves. The real problem is disloyalty to the nation, as a proxy for the people and their culture. Harrington misses this, or, more likely, entirely rejects it.

So, instead of focusing on nations and national feeling, Harrington focuses on how small states, such as the Cook Islands or Jersey, can be wholly corrupted by wealth management. This is doubtless true. But it is small beans. The bigger game, and the bigger story, is the corruption of major states, and the nations they serve, by the atomized global elite (to whom increased power is granted by the wealth management profession, as Harrington outlines very well). What else are the activities of George Soros and his ilk other than attempts to corrupt and undermine the sovereignty and stability of the United States? They push deliberately socially destructive policies, ranging from attacks on religious believers to techniques deliberately enabling massive vote fraud, in order to destroy the nation as it is and create the nation as they will it—a malleable tool in the hands of the new malefactors of great wealth, with a leftist social structure and an imploded culture. And Soros, a man with more than a passing resemblance, physically and in his actions, to Rumpelstiltskin, does this not just for his own personal wealth, but because he hates what the old Westphalian and Western order represents, a world of national feeling, national loyalty, and unique (and superior) culture. (Soros, of course, hates his own original country, Hungary, except to the extent it is willing to become a subordinated fungible part of the odious EU experiment.)

Anyway, enough time on the soapbox—on to some other problems with the book. Harrington is a sociologist, not a historian or an economist, and it shows. For example, she focuses quite a bit on the origins of trusts in medieval law. She gets the mechanics right, but the history totally wrong. It is not true that English knights going to the Crusades gave land to what became “trustees” in order to avoid seizure by “the church, the state or rival noblemen.” Nor is it true that “the owner’s wife . . . had no legal standing to own property [herself].” In most of medieval Europe, particularly England, women could very much own property in their own right, and frequently did so. Similarly, they often directly administered estates for absent husbands, including those fighting in the Crusades. (One of the frequent criticisms by Muslims during the Crusades was that the “Franks” in Outremer allowed their women entirely too much independence and freedom.) The reality is that where a wife could not administer the estate, the trust form developed to efficiently administer an estate, including maintenance, farming, interactions with the king and other nobles, and so forth. These might include threats from “the state or rival noblemen” (the church did not and could not go around seizing land from absent knights), but those threats were not the main reason for trusts (and would exist whether the owner was absent or not). She also ascribes early legal authority over trusts to the ecclesiastical courts, whereas the secular Court of Chancery was the key player (part of the development of the separation of law and equity in the Common Law). None of this undercuts the rest of the book, but it’s a bit disconcerting to see bush league history errors, which Harrington probably got from the same kind of popular history that tells us that “rule of thumb” came from the size of the stick an Englishman was allowed to beat his wife with.

History errors are combined with economics errors and then exacerbated by the author’s credulity. We are told that wealth managers participate in elite, exclusive social activities, and through these obtain both new clients and non-public information. The example given is of a wealth manager who went bird shooting, and was able to alert his clients to a future increase in the cost of wheat, because at the shoot “we were told that the cost is going to go up 30 percent next year, because wheat [to feed the birds] is getting so expensive.” I’m no commodities trader, but I’m pretty sure that (a) what rich people idly say while shooting is not a good gauge for what global commodity prices, which fluctuate wildly, are going to be next week, much less next year and (b) if wheat is already expensive, as noted by the participants, that says exactly nothing about its future price. Similarly, Harrington says, analogizing to wealth managers, “A common story told by [London] junior lawyers is that wearing the right color socks and shoes is vital for success.” I wasn’t a lawyer in London, but I was an American big city lawyer, and that’s just laughable. The reader gets the impression that some of Harrington’s interviewees were trying to make her look foolish, and their success makes one wonder about their honesty in other matters.

Harrington makes other odd statements, too, like “the wealthy have made these service cuts [to Medicare and Social Security] a key political issue in the 2016 presidential campaign.” Nothing could be farther from the truth. No viable US politician running for President has EVER suggested cuts to those programs. Suggestions for cuts are confined to fringe players and professional economists (despite the undoubted need for such cuts). Then Harrington objects to wealth managers’ attempts to minimize taxes because “taxation provides the funding for public services such as schools and roads—[this] would seem tantamount to helping those states cut their own throats.” If Harrington thinks any significant amount of tax revenue in any country goes to schools and roads, perhaps she should stick to sociology. She ascribes the 2008 financial crisis to “bad debts and risks hidden from regulators in obscure offshore vehicles,” which is just wrong—the regulators knew all about the risks, and did nothing, and nobody alleges that the crisis had anything at all to do with offshore vehicles (that’s an Enron-era thing from nearly a decade before). Instead, the crisis was caused by domestic financial derivatives and a housing market corrupted by deliberate government action to distort the market for political gain.

Finally, Harrington bizarrely criticizes “philanthropic trusts and foundations that address social problems such as education and poverty.” You would think that would be desirable and cut against her argument that the rich harm the rest of us. You would be wrong. She believes we cannot allow the rich to be charitable, for when such private individuals dare to spend their money on charity, it is “without public accountability and often with mixed results.” How dare they spend to help others without subordinating themselves to the All-Mighty State! Leaving aside that both public accountability and good results are very, very rare in government programs addressing education and poverty, this betrays the usual unreflective statist mindset through which Harrington processes all her thoughts. That doesn’t make the book bad—but it could have been a lot better if she could have removed herself from that mindset, and truly examined the real impacts of the wealth management profession.

[Raul Velazquez · Rating 5 out of 5]

How the world really works.

This book is not a get rich for dummies read. It is for the average middle to low income citizen wondering why economic growth is unobtainable.

Why taxes are always high for the 99%, yet so low for the ultra wealthy 1% or nonexistent in gains via investments.

It's the keyhole view into a hidden world dating back to feudal times.

[JC · Rating 4 out of 5]

The weird world of private wealth managers is actually rather interesting, and I actually am very fascinated by the scandalous lives of my enemies (the ruling class). I feel like airing out dirty laundry is actually a pretty effective way of building class consciousness and politicizing friends, family, and fellow workers. And understanding how the rich lie, cheat, and steal is an important aspect of working towards dismantling capitalism (in my view). I think I heard about this book a while ago, but felt like reading it after watching Succession, and there is something a little Shakespearian about this quasi-feudal world of extremely wealthy people for whom borders mean almost nothing. If you're interested in getting a little glimpse into Brooke Harrington's research this print interview and this podcast interview she did with Jacobin is a nice place to sample what you find in this book.

[Javier Boncompte G. · Rating 4 out of 5]

A good book about how Wealth Managers not only help clients avoid taxes worldwide but also how they help them protect their assets and even avert non-financial laws in their home countries. Clearly written and with excellent references for further reading. However, the book sometimes gets a bit repetitive and does a lot of unnecessary self-referencing to previous chapters which can be tiresome for reading.

[carol · Rating 4 out of 5]

Reads like a PhD thesis and yup, the system is rigged.

[Vishaka Datta · Rating 3 out of 5]

I read this as a follow-up to Nicholas Shaxson's book on tax havens. Where Shaxson provides a bigger picture view of tax havens in terms of how they originated, why they continue to exist and their future, this book provides a "micro" view of how offshore structures get created.

First, the good --- As far as I can tell, this is the only book I could find that explores the world of wealth managers from the inside. The author trained as one, and gained access to fellow professionals for interviews. This is in contrast to Shaxson's book for instance, where he acknowledges that his presence in offshore islands was not quite welcomed by financial professionals there.

Harrington's account, on the other hand, seems more anthropological, where she not only studies the impact of wealth management tactics, which forms the second half of the book, but writes at length about the profession of wealth management itself. Tracing its roots to the institutions of trusts in England, Harrington brings out an interesting fact, which is that wealth managers as active investors of a trust's wealth is a recent phenomenon. While trusts were also used in medieval times for tax dodging purposes, its growth as a profession is very very recent, with Harrington pointing to the society of trust and estate professionals (STEP) as the first (and presumably only) body that certifies one as a wealth manager.

The author extensively interviews wealth managers, finds out their motivations as to why they do what they do, how they view their role in the creation of wealth inequalities, and how they got into these jobs. What emerges is an interesting picture of the profession. It turns out that wealth managers are actually amongst the lowest paid in the financial sector, and that much of the job satisfaction in it is derived from developing an intimate relationship with clients. So intimate that wealth managers end up being the repository of secrets of their high net worth clients, including knowledge of mistresses, children born from said mistresses, and sources of income kept from the client's family. And while the popular conception of wealth managers are those of people motivated purely by greed, the picture that emerges from these interviews is one of a profession that has a fairly sophisticated code that dictates a wealth manager's behaviour. Perhaps most interesting are the motivations described, where managers believe themselves to be honorable guardians that protect family fortunes from the vagaries of government taxation, spendthrift heirs and jealous relatives. However, these professionals aren't blind to the consequences of their actions. Most genuinely believe in some sort of free-market ideology when it comes to taxation, where they feel that tax competition between countries is important for their economies and not just their clients.

The book is also chock full of great references, some of them book and the others articles in social science journals. These references cover a range of interesting topics, such as the history of trusts, corporations, the sociology of professions in general, as well as details about taxation and tax-avoiding structures.


The not-so-good --- The book tends to get rather tedious after the first half. While the first half describes the wealth management profession in itself, which is what makes the book unique, the second half looks into the consequences of wealth management on real economies. This is where the book pales in comparison to Shaxson. While the author heavily relies on Thomas Piketty's work to highlight the growing wealth inequality amongst countries since the 1980s, no new insights are provided from her interviews. For starters, government tax revenues derive from both income tax and corporate tax. Her interviews cover tax avoidance schemes over income and capital gains, but say very little on corporate taxes. There are interesting cases highlighted where offshore wealth has been used to dodge debts and circumvent inheritance laws. In general, I would concede that the one percent dodging their taxes in this fashion does contribute to both wealth and income inequality, the evidence presented here is rather weak.

The second issue is that parts of the book are written more for a social scientist rather than the lay reader. Particularly when the author contrasts wealth management with other professions, the writing gets packed with references and dense sentences which can obscure the point the author tries to make. The conclusion chapter in particular makes for tough reading as it occassionally gets flooded with social science lingo that isn't elaborated on elsewhere in the book.

Finally, certain points in the book are repeated way too many times. This perhaps makes the book effective as a reference book (and, perhaps, is meant to be one) rather than one that can be read over the span of a few days.

Overall, however, when it comes to an analysis and exploration of wealth management, this is really the best reference out there.

[Dina · Rating 4 out of 5]

Good book which is trying to present a complicated topic through simpler lenses. I'll put on my shelf to re-read. When 1% owns more than 50% of all wealth, and shelters it through offshore trusts, foundations and accounts we are but slaves to serve it.

[C · Rating 4 out of 5]

Fascinating. Ultra-ultra-high-net-worth individuals are pretty much above the law. National borders? What borders? They want the infrastructure and stability and security of any first world nation, but they don't want any of those laws to apply to them. Many UUHNWIs do everything they can to hide their wealth away in offshore accounts and complicated shell companies and trusts. There are billions of lost revenue from income tax evasion. Unfortunately for those living in the Cayman Islands, British Virgin Islands, Cook Islands, and other such tax havens, usually the deals that benefit the wealthy from other places is not legally applicable to locals. In fact, locals get a raw deal because since the government is not taxing the rich, to get revenue, they tend to raise taxes on locals.
It's common for wealth managers to know more about their clients than their spouses, since they need to know everything that might be a financial liability. For example, second family in another country that the official family doesn't know about. Or kids with drug addictions - also common. Sadly, super wealthy people are often suspicious and secretive. Being uber rich means that everyone is always trying to get a piece of you, get into the will, or worse, extort / blackmail you.
Although this book is the result of an academic study by a sociologist, I found it very readable and interesting. I skipped over the lengthy "how this study was done" section in the beginning and the long list of references which takes up the last 1/5th of the book.

[Patrick · Rating 2 out of 5]

The topic is very interesting, but I didn't enjoy this book as much as I hoped I would.
One of the "hooks" of the book is that the author was able to gain a high degree of access to the wealth management community, and because of this I was hoping for a heavy dose of specific examples and anecdotes. However, those felt few and far between. Instead, there was a lot of discussion of wealth management techniques generally and how the field has changed over time, all presented in a way that felt a bit more like an academic paper than a book. There was also quite a bit of repetition in the form of references to things that had already been discussed or were about to be discussed.

[Amber · Rating 5 out of 5]

This book is illuminating, academic but not dry, and inspires simultaneous feelings of fury and hopelessness. It neatly outlines how the wealthiest of us not only successfully hide their wealth, but use it to create family dynasties and avoid supporting state social structures that supported them. The methods, which are reminiscent of medieval times, are often legal and creative and not only bad for the majority of the human population, but also for capitalism in that they tie up wealth and keep it from being reinvested in substantive ways. Worth your time.

[Hnblair · Rating 3 out of 5]

Eye opening. A new phenomenon in 20th Century growing into 21st Century. Important to distinguish between wealth and income. How wealth managers protect the wealthy from paying taxes and maintaining their wealth in light of divorce, family quarrels, and through death to next generation. Also discusses impact of wealth managers work upon state's financial policy. How there are governments now devoted to protecting the wealthy and their money. Author repeats ideas several times throughout book, giving opportunity to "catch the idea again.

[Alex Song · Rating 2 out of 5]

This book went nowhere

3x as long as it needed to be

Ch 3 is where all the insight is

[Allie · Rating 5 out of 5]

Excellent approach, extremely well researched. Eye opening and concerning.

[Kat V · Rating 4 out of 5]

If you didn’t hate the ultra wealthy before you will now. This is unbelievable. Great book. Lots of good information. 4 stars even

[vitellan · Rating 3 out of 5]

As other reviewers have mentioned, the reading experience is far less juicy than the premise leads you to believe (I was brought here by an NPR podcast/interview with the author). It definitely reads like someone's PhD research and gets repetitive, but as I knew nothing to start with, the repetition wasn't that much of a negative. Often when I wanted to copy a quote from the book, it was someone Harrington was already quoting - so she definitely has a knack for finding the right sources and highlighting their turns of phrase for broader appreciation. There's also an interesting view into the history of trusts as a tax evasion scheme and the recency of wealth management as a profession.

The concluding chapter explicitly calls out how the ultra wealthy make use of a parasitic system of shifting their wealth across borders to avoid paying any dues at all to the existing, porous, outdated financial/economic/political systems that formally run the globe today. It seems like an entire age ago when the darkly satirical movie "Parasite" first came out, though, and I would say that parasite is maybe too noble of an analogy to draw for this subject. After all, parasites use their hosts for their own survival. The passive accrual and deliberate preservation of more wealth than any single human and its living family members would ever realistically need to max out on marginal utility, at the direct (and severely detrimental) expense of other humans, can't really be justified in the same vein. In yet another point of divergence from the "parasite" analogy, the ultra wealthy and their wealth managers can also pressure the nation-state "hosts" into doing what they want. Why break laws when you can help write them?

The more positive spin is that wealth managers could possibly be incentivized to help their clients comply a little bit with all the laws they've hitherto flouted as a matter of course (to say nothing about victim narratives). And that their study guide for cheating (a.k.a. the professional training book to get TEP certification) can't help but express the tiniest amount of ambivalence of the ethics of their work. Take that "silver lining" as you will...

[Jade · Rating 5 out of 5]

My personal favourite among all the literature that I have read relating to a coursework essay about tax havens. Harrington's book makes an important intervention in various different fields (i.e. inequality, professionalisation, globalisation, etc.), but in particular, its contribution to the field of political economy is in its firm grounding in the actions of individuals and thus recognising the importance of individual agency in topics related to contemporary political economy. Harrington took an ethnographic approach towards this issue, doing extensive fieldwork with wealth managers. So what we get is an incredibly rich account: instead of looking at tax havens from the perspective of large structures (i.e. sovereignty, capitalism, etc.) which often produce arguments that seem to overdetermine the existence of tax havens - making it seem somewhat ridiculous to question the existence of tax havens because they seem so a-given - we get multiple perspectives of how wealth managers understand their role, grapple with moral misgivings, feel misunderstood and maligned, etc. All of this reveals deep insights about the profession that simultaneously looks at how the broader global forces / structures has contributed to this profession, but also how this profession has shaped much of the world that we live in. I found this a deeply insightful and enjoyable read - a rare but precious example of how an anthropologically informed ethnographic approach can be brought into conversation with topics in political economy that have traditionally been more concerned with structures than agency.

[C · Rating 3 out of 5]

I read this for 3 reasons:
1) I wanted to learn how to protect my wealth, not only because I want to avoid tax (honestly, who doesn't?) but also because I have no children so I want to structure my wealth such that someone could be persuaded to take care of me when I am old
2) Intellectual curiosity, particularly as I used to study economics
3) Prurient interest (honestly, who doesn't have this) in the lifestyles of the rich and famous
Regarding 1) I learned that it is not possible to DIY wealth management (which was disappointing but not the fault of the author) but did learn enough about wealth management techniques to feel confident that I could understand what was being recommended if I were to see a professional wealth manager
Regarding 2) I learned a few things of interest as a citizen, but the only thing I learned about economics is that sociologists don't understand it
Regarding 3) I got nothing at all
The problem with this book is that Harrington's research method makes no sense - if she wanted to write a technical treatise on how wealth management works, she should have simply analyzed the Panama Papers; if she wanted to write a scandalous expose that would get regular people interested, she should have gone undercover to dig up some real dirt! Instead she used a sociological technique resulting in a book where 75% of the contents is only of interest to sociologists!

[Charlie · Rating 4 out of 5]

1. Introduction
2. Wealth Management as a Profession
3. Client Relations
4. Tactics and Techniques of Wealth Management
5. Wealth Management and Inequality
6. Wealth Management and the State
7 Conclusion

The chapter headings are a more than usually useful guide to the shape of this book, which is a slightly odd duck, a combination of an academic sociological study about wealth managers and their clients and a how-it's-done guide to the various vehicles the rich use to avoid taxes, inheritance laws, debts etc. It succeeds at both, in my opinion. The examination of the profession of Wealth Management and of the psychology (and psychoses) of the extremely rich people wealth managers work for is insightful and filled with interesting anecdotes. The how-to guide is both fascinating and horrifying, and also very clearly written (it's not a how-to guide in the sense it tells you the mechanics of opening an offshore bank account, but it tells you a lot about the financial instruments used). For about 10 minutes, my memory being what it is, I understood the differences between and relative advantages of trusts vs foundations vs corporations and STAR vs VISTA. The book also doesn't shy away from discussing the morality of this wealth protection, while also doing its best to explain the anti-tax, anti-law, anti-state attitudes of many of the people involved (both the rich and the wealth managers who work for them). Not a fluffy read, but interesting.

[David · Rating 4 out of 5]

Harrington demonstrates how the use of offshore financial centers has become normalized by talking to the people who manage the process. Harrington's anecdotes indicate that the professionals who make the process work excel more at being part of a very clubby world than any particular acumen for financial engineering, as the actual process of moving money into trusts, foundations, and shell companies is well known and straightforward. Harrington makes a very convincing case that once an individual reaches a certain level of wealth, they can simply opt out of the primary responsibility that individuals have in society - paying taxes. Harrington's other point, that these opt-outs weaken states, is also believable.

[Jack Newsham · Rating 3 out of 5]

This book could have been 80% shorter. There is some interesting history and some brief talk of why and how these convoluted offshore structures are made, but it’s too academic. It goes on for pages and pages with generalizations and citations to authorities that would only matter to sociology professors.

[Thomas · Rating 3 out of 5]

An interesting look at the vast network of lackeys paid to make sure concentrations of private wealth are maintained throughout generations. I found the book to be a useful antidote to the notion that we can somehow tax away the power of the bourgeoisie, though Harrington herself seems unable to concieve of any more radical solution.

[Mario Witte · Rating 4 out of 5]

Interesting insight into a world where nation states and their rules are meaningless.

[Bookphile · Rating 4 out of 5]

Enlightening and alarming, this book offers a window into a world only the super-rich typically see, and in so doing provides some real insight into what's driving inequality.

[Matthew Shoe · Rating 2 out of 5]

Interesting book about the people who work helping the ultra rich rig the system in their favor, avoid taxes, and protect their dynasties. Not always a page turner; read in a quiet place.

[Peter Berg · Rating 4 out of 5]

More examples would have been nice, else readable!

[Emily · Rating 4 out of 5]

This had some great information, but needed a stronger editing hand. I also wanted to hear more about the interviews she conducted.

[Caleb Pykkonen · Rating 4 out of 5]

My reading notes:

*First, it is an accurate history from a historically materialist perspective. This book considers anthropology and material conditions, as well as the mode of production, in its scope.

*The strength of this book is not just in identifying results that show that capital is intelligent in both using the state for its own purposes (i.e., setting up law sand markets, and enforcing) and avoiding state control in checking its power (i.e., evading taxes). The even deeper strength is in identifying that this needs to be studied, and we need to know scope of the impact of wealth management. This gives us insight into the power of the deep state (elite capital), and where it is trying to push the world.

*This book traces the history of trusteeship and how it transitioned to wealth management in the modern age as capital developed. It considers trusteeship as it began in the Middle Ages.

*Another strength is that author Brooke Harrington studied this topic not by using “objective” scientific data that was available (this would have been the incorrect method to pursue even if the data was available, which it was not for the most part because the deep state is very hard to study and there is not a significant existing body of research around the subject). Instead, the author took classes to get certified as wealth manager, to see what the experience was like, and talked to others in the profession.

*It is interesting to consider the difference between wealth managers and other individuals working in finance. Harrington points out that individual investors or employees of big banks like Goldman make a lot more money. But they also do not have a fiduciary duty to the money they manage like wealth managers. Investors are working for their own wealth. Since they manage the wealth of the labor class (i.e., retirement funds, to the extent they exist) it does not matter what happens to the wealth (from the perspective of capital, or the deep state). On the contrary, wealth managers are responsible for the hoard of the deep state, which must be protected at all costs.

*Investors at banks like Goldman are doing the “offensive” work of capital, making sure the machine runs and constantly chipping away at wealth of the proletariat. Wealth managers are doing the “defensive” work of making sure the proletariat cannot take any wealth from deep state.

*This book points out the importance of trusteeship in development of modern capitalism. Capital was never more than the deep state developing. Trusteeship transitioning into wealth management can be seen as part of the process of capital defining itself (becoming self-conscious).

*Elite capital, or power, has a long history of resisting the state, according to author.
Chapter 4: it is striking how worried these people are about risks to their wellbeing – health and safety, what if their money gets stolen, what if they get kidnapped. The weakness of capital is that it relies on mortal human bodies.

*This book was also a fascinating discussion of the changing definition of the state. Previously the state was defined by geographic boundaries. (Westphalian System). Now it is defined by capitalistic boundaries.

[Richard Thompson · Rating 4 out of 5]

Nothing much new here. It's all about how ultra wealthy people use offshore companies, trusts and foundations to protect their wealth and to protect themselves from creditors, kleptocratic governments and, most importantly, taxes. It's also about the army of professionals who are dedicated to serving these clients and protecting their fortunes in return for healthy fees. We all knew that they were doing this, and the vehicles that they use turn out to be much the same as the ones that they used 20 years ago or 50 years ago. Sure there have been a few changes. It's easier than ever to shop between tax havens. There are some new kinds of trusts that can be more effective as shields against creditors. I had not been aware of the growing number of places that have abolished the Rule Against Perpetuities. The layering of structures has gotten more complicated, but the idea of layering has been around a long time. As the rich get richer and wealth gets more and more concentrated at the top, trillions of more dollars have poured into the offshore wealth protection system. In the end it's bad for everyone -- morally corrupting, economically damaging and not even really providing any real benefit for the ultrawealthy. They only real difference between a fortune of ten billion and one of thirty is the bragging rights, and if your goal is to preserve it then it's mostly not something that you can even use because it has to go into structures that tie it up. Too bad that this system has such momentum behind it that it isn't likely to go away any time soon.

[Nicole · Rating 3 out of 5]

In short: It’s a thesis paper, not a mainstream book.

Am I glad I read this book? Yes. I learned a lot.

Did I get from this book what I was hoping to? No, not really.

This books reads as a thesis disguised as a book. Or more accurately, six academic papers disguised as a book. On the positive, it was well-researched and well-cited and covered some pretty heavy major concepts, such as how former colonies may be experiencing a new form of colonialism through catering to the ultra-ultra rich and their wealth managers.

What this book desperately needed, though, was more connection through stories. Tell me a story that exemplifies the concept, show me how it plays out through real-life examples. She did this three times during the book; twice when talking about the impossible tasks/tests potential clients give their wealth managers and once when talking about how the wealthy don’t have to play by the rules (passport example). It the book was about 30% examples like this and less repeating (especially skip the conclusion part of each chapter), I think it would have been a much better book.

I also found myself having to constantly stop and research cases or news tens (such as specific divorce cases) because the author seems to assume I know about them already.