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Shaxson defines offshore not as a low-tax place but as a jurisdiction that deliberately writes laws for non-residents to use, letting them escape the rules of the places where they actually live and do business. The product being sold is secrecy plus legal escape, whether from tax, financial regulation, criminal law or inheritance rules, so the key question is who a jurisdiction's laws are really built to serve.
The offshore system is best seen as a hub-and-spoke network rather than a scatter of independent islands. Crown dependencies such as Jersey and overseas territories such as the Caymans are held at arm's length so Britain can deny responsibility for them, yet they feed capital and business into the City of London. That structure lets the UK host secrecy while keeping deniability.
In the late 1950s London banks began dealing in US dollars. The Bank of England treated these deals as not happening in Britain, and US authorities could not reach them. The result was a stateless, unregulated money market that grew enormously and became the template for modern offshore finance, showing how deregulation can arise from one sovereign's decision to look away.
Small offshore centres become one-industry states where finance dominates jobs, media and politics, so dissenters face ostracism or economic exclusion. Shaxson calls this the 'finance curse', a counterpart of the resource curse, in which an oversized financial sector crowds out other industries, raises inequality and hollows out local democratic accountability.
Illicit and tax-motivated capital flight from developing countries, often through mispricing of trade between subsidiaries of the same company, far exceeds the aid those countries receive. That makes rich-world financial centres net beneficiaries of poverty rather than its benefactors. Tax havens thus shift the tax burden onto ordinary citizens and weaken states' capacity to govern.
The Square Mile is run by a medieval corporation that predates Parliament and has its own lobbying arm, the Remembrancer. Its elections give votes to businesses as well as residents. The result is an entity partly outside ordinary democratic control, embedded in the British state and consistently pushing national policy toward the interests of finance.