The Bahamas is now facing a financial crisis of great severity… a crisis with many facets and dimensions. It may start with actions taken against the banking industry of the Bahamas by the Organization for Economic Cooperation and Development starting January 1, 2001.
In part this problem is not caused by what the Bahamas has done. This part, the "Uncooperative Tax Haven" issue, is a reaction of the OECD countries to their own deficiencies. The next three articles will discuss this issue from different points of view.
However, this article contends that the "money laundering" problem is producing the crisis… and it is in large part the result of the breakdown of "law and order" in the Bahamas. That breakdown can be seen in many ways ranging from the small and barely noticed to the spectacular and shocking such as-
- A proposed labour bill that will make it a crime for a businessman to use modern techniques to determine the identity or truthfulness of an employee
- The apparent failure of the Government to live up to its international agreements
- The rise in crime that so frequently fills the headlines and front pages of the press
The Institute contends that the Government should address not only the specifics of how to deal with the OECD… the legislation to be enacted… but also the fundamental question of Law and Order.
The Rule of Law.
The Rule of Law is a concept developed in Britain years ago… in fact, at the dawn of the Industrial Revolution. Then the arbitrariness of despotic government gave way to a de facto separation of powers, first between lords and king and then between king and parliament. A.V. Dicey noted that "the law became the highest estate to which the king succeeds, for both he and his subjects are ruled by it."
The Rule of Law is a limit on the type of legislation that any government should pass. Ideally this excludes any legislation or regulation designed to benefit a particular group at the expense of others. In such cases the coercive power of the state is used in a discriminatory way.
F. A. Hayek in his 1944 classic, The Road to Serfdom, illustrated this point by referring to the obvious extreme case of that period… actions taken by Adolf Hitler were duly authorized by legislation but were later deemed to be crimes against humanity. In one sense they were "legal" but they violated "the kind of general rules known as formal law".
In practice politicians constantly take actions that benefit the electorate and parts thereof in order to secure their own political power. Historically defense of a country-s borders against invasion and pillage worked to the benefit of all… as well as the construction of roads, bridges and ports. The Industrial Revolution flourished during a period when the benefactors of the prior authoritarian regimes lost their privileges. For instance, the revocation of the Corn Laws removed the protection afforded landowners against the importation of lower cost foreign grains. Politicians forever face the temptation to use the power of the state to benefit specific people at the expense of others. This is a constant struggle in a democratic society.
Given the fact that the legal system here is derived from and is still connected to the English system, why does the implementation here not conform to the spirit of English law? In the sequence of crime, detection and punishment, why is punishment in so many cases reluctantly pursued if at all?
The author contends that it is cultural and is the misuse of victimhood and brotherhood. Historically Bahamians have experienced a unique combination of slavery, colonialism, poverty, a small population and isolation. These shape the Bahamian character.
For perspective let us look at John McWhorter-s analysis of African-American society, Losing the Race: Self-Sabotage in Black America (Free Press, New York, 2000). He describes "Victmhood" as the collective consciousness of past "injustices" that is natural and healthy… if… it leads to rational thought and constructive solutions. It becomes "Victimology" when it simply fosters and nurtures "an unfocused brand of resentment and a sense of alienation." In these instances it is evidenced by–
- An exaggerated sense of separation from others
- A belief that historical factors warrant the application of a different set of moral values
- Support for one-s "brother" even when those more widely held values would not warrant such support
- A failure to appreciate and consider the progress that has been made
- Emotional and illogical thinking when problems are framed within a context that literally does not exist any more
- A diminished self-esteem when one is held to a "lesser" set of standards.
It is reasonable to conclude that "Victimology for political gain" is a major factor in the present state of Law and Order in the Bahamas. This is unfortunate.
According to Thomas Sowell (Conquests and Cultures: An International History, Basic Books, New York, 1998) the Rule of Law played an important role in why Britain became "the first industrial nation and retained its preeminence for a century. The evolution of the rule of law… not only helped promote the internal economic development of Britain itself, it helped attract to Britain much of the commerce of Europe."
Likewise in the case of the Bahamas today internal economic growth and capital inflows have been and are important… especially in the Global Economy… the only one in which the Bahamas can prosper.
The Blacklisting crisis.
And… with respect to economic growth, culture does matter. This is not just theory without real consequences.
The country-s position in international financial markets is threatened by the OECD blacklisting. In fact, the inefficient politicized justice system exacerbated the country-s problems by blocking and frustrating legitimate legal proceedings under international agreements. This evidences a disregard for the Rule of Law.
Some will say that culture just like people won-t change. However, the country-s abundant legal skills, its Christian tradition and national self-interest could facilitate the kind of appraisal and action that would bring it into line with the spirit of the Rule of Law. This is both necessary and desirable.
A critical reply.
As is its practice, the Institute circulated the above text for comment. It got one response that recognized the article as a "Good piece!" but contended that the country-s majority wants "the absolute protection of the criminal". The commentator went on to document this point and suggested the following closing text to the proposed Letter to the Editor:
"We complain about the cost of operations at Bahamasair, Batelco and other governmental bodies. We recognize the stealing and the various scams. However there is no national acceptance on a personal level to stop this bloodletting that has corrupted the whole of Bahamian society.
"Now it seemingly has overflowed into the international arena with the -blacklisting- of The Bahamas. The average Bahamian should now be aware that what is accepted as everyday life has significant negative consequences that he can justifiably fear. Suddenly 1 plus 2 plus 3 may equal 6."
He added, "I hope it is so!"