Writing for the Financial Times, a professor from the London School of Economics identifies a number of enemy jurisdictions that pose a grave threat to the world. Some of these jurisdictions should be subject to sanctions, he writes, but in other cases he urges much more aggressive tactics, including annexation. What makes his article so interesting is his choice of targets. He is not targeting Iran. Presumably he does not worry about nuclear weapons in the hands of Islamic fundamentalists. Nor is he targeting North Korea, a rogue state that lets its own people starve. Other despotic regimes such as Cuba, Saudi Arabia, Turkmenistan, and Venezuela also get a free pass. Instead, Professor Buiter’s Axis-of-Evil is comprised of places such as Liechtenstein, Jersey, Luxembourg, Andorra, Guernsey, Switzerland, and Monaco. These jurisdictions, because of their low tax rates and respect for human rights, attract capital from high-tax nations and therefore make it a bit more difficult for politicians in places such as France and Germany to buy votes with other people’s money. Interestingly, Buiter’s penchant for aggression varies depending on the expected level of resistance. He wants little countries such as Monaco and Liechtenstein to be forcibly annexed as part of a tax-motivated Anschluss. But he is much less bellicose in the case of Switzerland, perhaps because every able-bodied male is a member of the militia and possesses a fully-automatic machine gun. And he doesn’t even mention the United States, even though Delaware and Nevada companies are excellent tax havens for non-Americans. Perhaps it is just a matter of time before he bravely adds America to his hit list. If nothing else, his article makes for amusing reading:

The list of countries that make a living out of tax evasion and related activities (essentially the same countries that consciously created, and in some cases continue to offer, facilities, laws, regulations and institutions to facilitate money laundering) is long. The OECD lists 35 microstates with the tax haven designation, but this excludes larger countries with strong bank secrecy laws whom the shoe fits just as well (e.g. Austria, Switzerland, Luxembourg). …The vast majority of European countries — all those that lose out because of the existence of these tax havens — should unite in a determined effort to end these countries’ ability to offer safety to tax evaders by granting anonymity, confidentiality and secrecy. The exact modalities may differ from case to case. Jersey, Guernsey and the Isle of Man should simply be absorbed lock, stock and barrel into the UK, with English laws, rules and regulations applying across the board. The special status of these strange entities is not cute; it’s an enabler and facilitator of unethical and illegal behaviour. The EU should adopt a directive on bank secrecy that would end the nefarious practices of Luxembourg and Austria. Belgian dentists will just have to get used to paying taxes. Andorra, Monaco and Liechtenstein should be given the choice of ending bank secrecy or facing annexation (by France and (once it abandons its bank secrecy laws) Austria respectively). Switzerland is the big prize, as unlike the other tax havens, it is a country rather than a dwarf-state and postage-stamp curiosity, and it is outside the EU. It should be subject to sufficiently stringent economic sanctions from its neighbours (after all, it is landlocked!) to induce it to abandon the laws, rules and regulations, including its extreme version of bank secrecy, that make it the one of the countries of choice for parking illegal or extra-legal money.