An emerging literature on the offshore world by Atossa Abrahamian, Ian Kumekawa, and others has begun to explore these spaces of “unconventional jurisdiction” that act as conduits of capital, goods and labour in the global economy. This network of low-tax and lightly regulated jurisdictions are a pervasive feature of modern capitalism. While the emergence of tax havens and the offshore are usually traced to the early twentieth century, this paper argues for their appearance alongside the development of the early modern European global trading network.
The paper specifically focuses on the network of offshore jurisdictions surrounding Britain during the eighteenth century, including the Channel Islands and the Isle of Man, to understand how they functioned to enable merchants to evade taxes and regulation. Responding to a world of high protectionism that actively shaped trade flows through mercantilist prohibitions, regulation and high tariffs, this network facilitated a vast smuggling and illicit economy through which commodities made their way to and from Asia, Africa and the Americas.
This was a co-created economy that was largely self-organized through the initiative of merchants, traders, professional smugglers and local officials. It was also a hybrid business that fused together the commerce of large, monopolistic corporations, who were often the suppliers, with the smallest traders who ran tea sourced in India onto the British coasts. Using evidence sourced from local archives, the paper follows the passage of goods from their origins often in distant Atlantic and Asia markets through offshore jurisdictions, and finally onwards to domestic markets in England and their distribution channels. By doing so, the paper describes the forms of business organization, including mercantile syndicates and criminal gangs, that enabled this trade. This exploration of the early modern offshore contributes to the long history of the offshore, and provides new insights into market formation.