As historian Niall Ferguson writes in his 2011
book, “Civilization: The West and the Rest”, the city of London was an 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?
Welcome to this episode of the Infographics Show, What is the city of London corporation?
It may come as a surprise to some of you that London is not just a city but also a corporation.
Those that don’t know are probably thinking right now what is this corporation?
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 Corporation of London 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 in this corporation, just like any other.
It has bosses in a sort of way and lots of staff.
But let’s rewind a little.
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 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.
It was in 1191 that the 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 refuges from the poorer Midlands and
the North, the corporation was asked if it might extend its boundaries.
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 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 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 the corporation remained in-tact.
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 business, 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 corporation calls itself a democracy, it’s really just an entity
ruled by the most rich and powerful.
It gets stranger, though, and that’s why there are tons of conspiracy theories about
this 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.”
Nowadays if you want to apply to become a freeman, you must either show exceptional
servitude, inherit the title or be nominated by a Livery company…hmm, and what exactly
is a livery company?
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 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 in
Great Britain, which some critics say is a reason some of the country’s poorer areas
look almost third world.
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 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.”
So, what do you think about this?
Can you add to the story?
Let us know in the comments.
Also, be sure to check out our other video Oldest Companies That Still Exist.
Thanks for watching, and as always, don’t forget to like, share and subscribe.
See you next time.