Percy Bysshe Shelley’s compatriot reporter and author Oliver Bullough visited South Dakota last spring and found neither poets unacknowlegedly legislating nor even reasoners and mechanists innocently seeking durable, universal, and permanent good. Instead, in his rich write-up of our unfair state, Bullough finds South Dakota in thrall to promoters of utility for the rich alone, “undermining global attempts to control tax dodging, kleptocracy and money-laundering.”
A decade ago, South Dakotan trust companies held $57.3bn in assets. By the end of 2020, that total will have risen to $355.2bn. Those hundreds of billions of dollars are being regulated by a state with a population smaller than Norfolk, a part-time legislature heavily lobbied by trust lawyers, and an administration committed to welcoming as much of the world’s money as it can. US politicians like to boast that their country is the best place in the world to get rich, but South Dakota has become something else: the best place in the world to stay rich.
At the heart of South Dakota’s business success is a crucial but overlooked fact: globalisation is incomplete. In our modern financial system, money travels where its owners like, but laws are still made at a local level. So money inevitably flows to the places where governments offer the lowest taxes and the highest security. Anyone who can afford the legal fees to profit from this mismatch is able to keep wealth that the rest of us would lose, which helps to explain why – all over the world – the rich have become so much richer and the rest of us have not [Oliver Bullough, “The Great American Tax Haven: Wh the Super-Rich Love South Dakota,” UK Guardian, 2019.11.14].
Bullough notes that judges in Merrie Olde Engelande, recognized the pernicous effects of the elites’ hoarding and locking up wealth forever and intervened in the 17th century with the “rule against perpetuities” to keep wealth circulating through the entire economy. Remarkably good things ensued… only to be reversed by Bad King Bill of South Dakota:
That weakened aristocratic families, opened up the British economy, allowed new businessmen to elbow aside the entrenched powers in a way that did not happen elsewhere in Europe, and helped give the world the industrial revolution. “It’s a paradoxical point, but it wasn’t a bad thing when the scion of some family from out in the counties came down to London and pissed away his fortune. It was redistribution of wealth,” said Eric Kades, a law professor at William & Mary Law School in Virginia, who has studied trusts.
English emigrants took the rule to North America with them, and the dynamic recycling of wealth became even more frenetic in the land of the free. Then Governor Janklow came along. In 1983, he abolished the rule against perpetuities and, from that moment on, property placed in trust in South Dakota would stay there for ever. A rule created by English judges after centuries of consideration was erased by a law of just 19 words. Aristocracy was back in the game [Bullough, 2019.11.14].
Now South Dakota’s Legislature blindly breaks the world, uncomprehendingly voting for a return to feudalism:
…It last updated the law governing trusts in 2018, and brought in Terry Prendergast, a trust lawyer, to explain the significance of the changes. “People should be allowed to do with their property what they desire to do,” Prendergast explained. “Our entire regulatory scheme reflects that positive attitude and attracts people from around the world to look at South Dakota as a shining example of what trust law can become.”
There were a few questions from the representatives, but they were quickly shut down by Mike Stevens, a Republican lawyer, and chairman of the state’s judiciary committee. “No more questions. I didn’t understand perpetuities in law school, and I don’t want to understand it now,” he said, laughing.
…“The voters don’t have a clue what this means. They’ve never seen a feudal society, they don’t have a clue what they’re enabling,” [Senator Susan] Wismer said. “I don’t think there are 100 people in this state who understand the ramifications of what we’ve done” [Bullough, 2019.11.14].
It’s no wonder South Dakota’s leaders regularly denigrate Shelley’s poetical philosophers, not to mention inquisitive truthtellers like Oliver Bullough. South Dakota will brook no challenge to the feudalizing financiers who have taken over our state. Those hoarders have used our rural isolation and economic desperation to turn back centuries of striving toward some semblance of equality and opportunity and instead rebuild the walls that shield the laggardly rich from the ever-toiling subject masses.