As historian Niall Ferguson writes in his 2011 book, “Civilization: The West and the Rest”, the city of London was outback in the 15th century compared to some of China’s great cities. Then with international trading led by The British East India Company money flooded in, as did people of different nationalities.
The population is estimated to have been 50,000 in 1530 and then in 1605, it was around 225,000 people. Throughout the industrial revolution, London became the center of the world and from around 1825 to 1925 it had the largest population of any city on Earth.
The British Empire faded, but London has always been a powerhouse culturally, but also economically. According to the Global Financial Centers Index, London is still the largest financial center in the world– but what is this great city truly about?
London’s not just a city a but a corporation
Those that don’t know are probably thinking right now what this corporation is? Does it function like the Microsoft Corporation? Does it hire and fire and post annual profits? Does it have a main headquarters and a CEO? Let’s find out.
So, the City of London Corporation or in legal terms the Mayor and Commonalty and Citizens of the City of London, is the governing body of London’s financial district which is sometimes referred to as the “Square Mile.” Within that mile around 8,000 live, although around 400,000 people commute into that area for work every day, according to the corporation’s own website.
London is divided into 33 areas, or boroughs, and this area is one of them. On its website the corporation is perhaps extremely vague when it answers the question concerning what it is responsible for. The answer it gives is, “Providing services for residents (and City businesses) in the Square Mile, but not those of other boroughs.” And yep, you can apply for a job to City of London Corporation, just like any other. It has bosses in a sort of way and lots of staff. But let’s rewind a little.
History of how London became a corporation
We have to go back a long way when we look at how this corporation began. In fact, it’s often called the “world’s oldest continuously-elected democracy and predates Parliament.” The city of London school website writes, “The Corporation’s structure includes the Lord Mayor, the Court of Aldermen, the Court of Common Council, and the Freemen and Livery of the City.
The City of London developed a unique form of government which led to the system of parliamentary government at the local and national level.”
We’ll make a long story short here. 2,000 years ago, the Romans founded a trading post in what is now southern England and they called it Londinium. They did what they did best and built roads, walls, bridges, and made this place an excellent hub of trading. For hundreds of years, the city endured and when William the Conqueror arrived in the 11th century he quite liked it, too. He created the city of London and gave Londoners their privileges and rights so long as they accepted him as King. Done deal.
He built towers around the place, including the Tower of London, and fortified the rest of London. The city of London was a special old place, and this started a kind of agreement that it should remain a power unto itself. Later monarchs to some extent feared this powerful city and they created Westminster, which is west of the city of London.
You then had two cities. The City of London still had a lot of freedom, which, according to one website, was “an essential requirement for all who wished to carry on business and prosper in trade within the Square Mile.” Freemen, there could do their business not impinged by outside influence.
Became a corporation in 1911
It was in 1191 that the City of London Corporation announced itself as a commune, only one rung on the ladder below the sovereign. It judged itself, it was in a way a law unto itself. It became so powerful that in 1632 the crown asked if the corporation might extend its privileges to other areas of London, but it refused.
These privileges we are talking about were mainly related to laws. As more people flooded into London, many of them refugees from the poorer Midlands and the North, the corporation was asked if it might extend its boundaries.
Great refusal in 1637
In 1637 it rebuffed that proposal, and this became known as “The Great Refusal”. It’s when the corporation of London in some ways turned its back on the rest of London and that’s why people sometimes talk about “A Tale of Two Cities.” One historian writes, “From that point on the people of London lacked any democratic unitary municipal authority. Business and, most particularly, finance, in contrast, had the most ancient political institution in the kingdom at their disposal.”
There were attempts to reform this gilded city, but the City Of London Corporation stayed. In the 18th century, London was flourishing, but it was the corporation that really flourished, bolstered by free trade. And it went against the monarchy at times, making it a kind of rogue entity in England. It supported George Washington and the American Revolution, even sending over men to fight for American independence and also sending over lots of money – something it wasn’t short of. This was pretty much treason, but it got away with it.
The City of London Corporation was untouchable.
Soon Parliament replaced the Crown as the highest power and democracy supplanted the Divine Right of Kings, but still, the Corporation of London remained a power unto itself, and the state didn’t want to make it subject to its practices and laws. The privileges and all the assets of the corporation remained intact. It worked for itself, not exactly always serving the people of Britain.
This of course has inspired a lot of criticism, and that criticism we hear today. Political writer George Monbiot offers us this stark line when talking about the Corporation of London: “It’s the dark heart of Britain, the place where democracy goes to die, immensely powerful, equally unaccountable.” He then adds that it’s doubtful even one in ten Brits knows it exists. Are any Brits nodding their head right now?
Monbiot explains that there are 25 electoral wards in the Square Mile area, but only four of them contain the 9,000 (we read 8,000 before) people that can vote. All the other votes are not people, they are businesses, mainly banks and finance companies. And no, it’s not the workers inside the businesses that vote, it’s the bosses. The bigger the company, the more votes it gets. This is what is known as a Plutocracy.
So, even though the City of London Corporation calls itself a democracy, it’s really just an entity ruled by the richest and powerful. It gets stranger, though, and that’s why there are tons of conspiracy theories about this corporation.
Different elective positions in the City of London Corporation
So, there are different layers of elected people. They are the common councilmen, the aldermen, the sheriffs and the Lord Mayor. To get into any of these positions you must be a freeman. What the hell is a freeman?
The corporation’s own website writes, “The medieval term ‘freeman’ meant someone who was not the property of a feudal lord but enjoyed privileges such as the right to earn money and own land. Town dwellers who were protected by the charter of their town or city were often free – hence the term ‘freedom’ of the City.”
They came out of medieval guilds, developed into trading and crafts companies and are now basically just powerful entities that embrace trade and commerce. There are 110 of them in London. They have lavish dinner parties and mostly speak in a kind of archaic posh English that is sometimes mocked by the rest of the country.
At the head of the table, you might find the Prime Warden of the Goldsmiths, Lord Sutherland of Houndwood. You get the picture, this is ancient, ritualistic England, a kind of Eyes Wide Shut scenario to those who might also believe the Queen is a lizard. It’s definitely a bit anachronistic and strange to most.
So, to become a freeman you must also get approval by an alderman, who has already gotten approval from a livery company. If you want to become the Lord Mayor, you must have gotten approval from everyone.
You must also give a lot of money away, which basically means you need to be very, very rich to get that position. As Monbiot says, it’s all about being in what the Brits call an “Old Boys Network”, which is a derogatory term meaning upper-class men that have made connections with other posh men in expensive schools and those connections are carried into adulthood. These are the people that run the corporation of London.
With money as their lodestar it’s not surprising this network isn’t always playing a straight game, after all, they were partly behind the financial crisis. Even after that crisis, the Lord Mayor’s job is partly to be an advocate for liberalization. That means deregulation. This can encourage corruption. That’s why the corporation is so often criticized.
In the documentary “The Spider’s Web: Britain’s Second Empire” the creators take a dim view of the Corporation of London, saying that after the empire collapsed it was this corporation that still pulled the strings in the world’s finance sectors. And it wasn’t always ethical. This was corroborated in the book, Treasure Islands, which says that because the corporation is a law unto itself, it can virtually get away with anything. The government is sometimes powerless to intervene.
What goes on in the City of London Corporation stays in the corporation
Monbiot writes, “The City has exploited this remarkable position to establish itself as a kind of offshore state, a secrecy jurisdiction which controls the network of tax havens housed in the UK’s crown dependencies and overseas territories.” We’re talking about billions and billions of dollars, money laundered through the corporation with absolute impunity.
That’s what the critics tell us anyway. The documentary we just mentioned says this cash isn’t just the money of oligarchs, but also drug barons, gangsters, and sometimes money from African despots who have mined their poor countries’ resources but have no intention of putting the money back into their country. All this aided and abetted by this superpower within a square mile of London.
We might add that a lot of cash that should have been taxable could have gone back to Great Britain, which some critics say is a reason some of the country’s poorer areas look almost third world.
City of London Corporation has relations with the offshore islands
The author of Treasure Islands writes about this, saying the relationship between offshore islands such as the Cayman Islands and the corporation can’t be understated in terms of how important it is for those involved and how it is detrimental to the British people. “This relationship is of massive, almost transcendental importance for the UK,” he said.
It’s not that the City of London Corporation is directly an offshore business, it’s just the special rules it works under allow it to direct money to tax havens. Will it change? One critic wrote, “I have observed British officials blocking attempts to strengthen international cooperation on tax information exchange by keeping the discussion on offshore trusts off the agenda. This happened as recently as 2015.”
It’s not just islands far away, either. Most people know large companies can find a tax haven next door on the islands of the Crown Dependencies of Jersey, Guernsey and the Isle of Man. The Occupied Times writes that these three islands, “provided net financing to UK banks of a staggering $332.5 billion in the second quarter of 2009.” It’s not exactly secret, either.
You can read on the Jersey Finance website that it provides services for, “corporate treasurers, institutional bankers and treasury specialists, fund promoters, brokers and other corporate financiers, Jersey represents an extension of the City of London.”
According to critics, hundreds of billions of dollars of cash is not getting taxed, while the Brits complain about late trains, NHS cutbacks and dole scroungers. We’ll leave you with this line from Treasure Islands:
“‘There is nothing we can do’ is the typical response to those who say that the UK cracks down on the criminality, abuse and corruption run out of these places. And behind it all lies the City of London, anxious to preserve its access to the world’s dirty money.”
Featured image: Coats of arms of the City of London Corporation, by Christoph Braun, licensed under CC0 via Wikimedia Commons