THINKING IN RUINS

On the Llano del Rio commune

by Laura Nelson

In 1914, a group of young socialists drove their Ford Model Ts over the San Gabriel Mountains and into the desert of the Antelope Valley to escape “the unnatural and almost inhuman state of mind” caused by the pressures of industrial capitalism. Disillusioned with formal politics and abstract revolutionary theories, they set out to form a socialist community and to show that another way of living was possible. “Take your first automobile for the valley,” announced an advertisement for the nascent experiment. “There, on the upper table of the grand mesa, will grow a co-operative city of marvelous beauty.” They called their project Llano del Rio, Spanish for “the plain of the river.” Over the next three years, thousands of people made the trek to Llano and down to the expanse of yucca trees their movements over the mountains a collective rejection of the “creed of capitalism” and a search for a new way of organizing society.

Last fall, I was sitting in my living room with a group of people who had been gathering as part of “L.A. Study Group,” an informal, ongoing space to learn and think about Los Angeles. Mike Davis, whose writing on the city has been formative for so many, had passed away a few weeks earlier; the room was filled with copies of City of Quartz: Excavating the Future in Los Angeles, his sprawling 1990 study of the competing dreams, visions, and speculations that have made Los Angeles what it is today. We found ourselves fixated on the opening pages of the book, where Davis turns to Llano del Rio. In the 1910s, Los Angeles was hardly a city, yet boosters and politicians were actively crafting the myths and speculative visions that would lay the groundwork for its future. For Davis, Llano was a “utopian antipode” in this polyphony of visions, the traces of its history evidence of a path not taken. Lingering with a revery on this short-lived experiment, he suggested that “[t]he best place to view Los Angeles of the next millennium is from the ruins of its alternative future.”

For months after reading City of Quartz, I couldn’t stop thinking about Llano. What compelled people to give up their lives to join this socialist community? What did they find upon arrival? And what were the afterlives of this ephemeral experiment?

My attempt to work through these questions sent me on a journey through Los Angeles to archives across the city, up over the mountains, and to the arid edge of the Mojave Desert to collect the partial fragments of a dream, to dwell in ruins of past visions. •

When Llano del Rio was formed in 1914, there was no blueprint for capitalism’s counterpoint. “What we must know isn’t in any book,” founder Job Harriman recounted. “We’ve got to go out and discover it by trial and error from the ground up, and it’s going to be tough.” After losing a race to become the first Socialist mayor of Los Angeles in 1911, Harriman was frustrated by the futility of formal politics. Increasingly convinced that the only way to win the hearts and minds of the people was to demonstrate a viable alternative to capitalism, he decided to part ways with the Socialist Party, which was working on gradualist reform through the ballot box. Influenced by the writing of Karl Marx and novelists Edward Bellamy and William Dean Howells, he dreamt of a community premised on the values of collectivity and cooperation. Yet he felt compelled to move beyond theory and fiction, to rally other disheartened radicals to join him in creating a socialist oasis in the here and now.

Harriman and his partners bought the defunct Mescal Water and Land Company for $80,000, procuring access to hundreds of acres of desert land about 75 miles north of Los Angeles. Part of this deal included access to local water rights, including the possibility of building a future dam. On a practical level, they set up their socialist venture as a stock-issuing corporation and hoped to recruit 1,000 stockholders who would collectively own the company through $2,000 worth of stock, paying part up front and then slowly repaying the rest with a guaranteed wage of four dollars per day for contributing “useful work” to the community. The idea was that members would choose work farming, teaching, welding, building homes, cooking that aligned with their interests and abilities. In turn, they could take advantage of all aspects of Llano: schools, a hotel with regular meals, an assembly hall with ongoing lectures, a general store, a post office, doctor’s offices, a barber shop, and more. At Llano, people would have all the “necessaries of life.”

The earliest members of Llano called themselves “colonists,” “pioneers,” and “empire-builders” of a new socialist world. They envisioned their colony as the “Plymouth Rock of the Cooperative Commonwealth.” Moving to the California desert, specifically the Antelope Valley, they joined a lineage of settlers equipped with ambitious visions and colonial dreams. The land on which Llano was founded had been stewarded for over 11,000 years by many communities, including the Shoshone-speaking Kitanemuk people. Since the 1700s, multiple waves of pioneers Spanish explorers, American ranchers, and gold-seekers moved to the valley in search of prosperity, minerals, and an escape from their former lives. Llano del Rio, a part of this history of displacement, land acquisition, and world-building dreams, fashioned itself a different kind of “outpost.”

In a campaign to recruit members, they framed their community as a moral war against capitalism and invited people to join their “Army of Co-operation.” Their main recruitment tool was the socialist publication The Western Comrade, which circulated editorials and advertisements extolling the virtues of the venture. Llano enticed people with a chance to escape the “maelstrom of the struggle for existence,” “multitudinous bills,” the never-ending “roar of fruitless promises,” and the ever-increasing traffic of the city (already a concern in 1910s Los Angeles). Away from greed and rampant individualism, members could “strike and remain struck” from industrial capitalism, becoming the shared owners of the land and the tools of their labor. “Are you tired of the struggle in the cut-through competitive system?” one advertisement asked. Another called upon people to enlist in the war for another way of living: “It is the army of peace, and Llano the outpost of Progress. Will YOU volunteer?”

A haven from the ills of capitalism, Llano also presented itself as a literal paradise. “The climate is delightful,” boasted a piece in The Western Comrade. “Here one is surrounded by the most wondrous of bird, insect and flower life. Here one may sit and draw inspiration for dreams.” Articles and images that circulated in Los Angeles and around the country conjured an Edenic agricultural oasis, with acre upon acre of flourishing pears, apples, plums, apricots, olives, walnuts, and figs. Harriman believed that people had an innate desire to get “back to the land,” and promised prospective members that they would be able to live in an environment of “fruit and flowers, milk and honey.”

In addition to circulating newspaper

UNDOING SLAVERY Bodies, Race, and Rights in the Age of Abolition

Kathleen M. Brown

“Undoing Slavery arrives at the perfect moment for all who need to understand what’s at stake in the current battles over reproductive rights. An expert on law, race, gender, and sexuality in early America, Kathleen M. Brown shows how antislavery activists, especially Black women abolitionists, put bodies at the center of the fight to undo slavery. Ultimately, ending slavery was as much about Black women reclaiming control over their bodies and their reproductive freedom as it was about electoral politics or human rights discourse. Deftly moving among medicine, law, religion, and economics, Brown delivers a brilliant, necessary history for our time.”

—ARIELA GROSS, author of Becoming Free, Becoming Black: Race, Freedom, and Law in Cuba, Virginia, and Louisiana advertisements, Llano employed a sales agent to go around Los Angeles selling its cooperative vision, recruiting members, and taking a cut for each person who signed up. According to one member, the agent was notorious for promising “everything under the sun and heaven on earth” to people who would “sign on the dotted line and give him $500.” At first, new members needed to fill out an application, providing answers to questions like “Do you believe in the profit system?” and “Will solving economic problems ultimately lead to solving the social problem?” This application was later abandoned to expedite getting new members’ down payments. Although people of many racial backgrounds applied, Llano only accepted white applicants. The leaders claimed that their exclusionary policies were “not due to race prejudice but because it is not deemed expedient to mix the races in these communities.”

These early efforts at recruitment were successful; within the first year, hundreds of workers, intellectuals, artists, and dreamers packed their Tin Lizzies and made their way across miles of winding mountain roads. “The people have been coming in faster than ever lately,” Mellie Calvert wrote in a letter in September 1915. “We are so many now we can hardly all get inside at our big meetings.” By the end of that year, there were 499 members.

•

As people arrived at the socialist experiment, their dreams of a postcapitalist oasis often collided with the harsh realities of life in the desert. Walter Millsap recalls driving over the mountains “dreaming about the marvelous things they were going to do at Llano” and being taken aback when he glimpsed the community from afar:

“When I saw that little bunch of dirty tents strung out on the sand, after I had bumped over the boulders of Big Rock Wash, I said, ‘For God’s sake! Is this the place?’”

New members expecting quaint adobe homes and a beautiful climate instead found flimsy tents and tempestuous storms. “Housing was a sore problem,” one member recalled. Families often lived in makeshift shelters for weeks and months: “Mud, rain, wind, cold, and even heat made the tents inadequate and uncomfortable, particularly if they had no floors.” Meeting notes recounted “a maze of confusion, dissatisfaction, and discontent” and a daily torrent of community members complaining about living conditions. The winter of 1915 proved particularly tumultuous. “We had the awfullest wind + rain I have ever seen,” a young girl named Ruth wrote to her sister that December. “It blew the top to the hotel off + part of the dining room. It blew many of the tents down.” She described an old lady named Lona who was drying clothes as she watched her shelter blow away, carried with the tumbleweeds into the Mojave Desert. Tensions frequently erupted over shortages of food, including staples such as coffee, sugar, and potatoes. A letter recalls a woman from Pasadena “making a terrible howl” at the hotel when she couldn’t get a cup of coffee for a headache. And a couple weeks later, the cook, Mrs. Pickett (“a hot headed little body”), lost her temper and initiated a full-blown fight when a member asked “for the second help of potatoes.” Members who had seen brochures boasting a burgeoning agricultural haven with endless wagonloads of pears, watermelons, cantaloupes, and almonds found a much more monotonous menu. Tony Vacik, who grew up as a child at Llano, later recalled an interminable pasta dinner: “Too much spaghett’, I hope to tell ya.”

Those who vocalized dissent about life at Llano del Rio were known as “crabbers.”

A survey of the community from fall 1915 found that “a great deal of so-called ‘Porch Oratory’” was taking place during the day, bringing down the morale of the Llano people. Alongside their everyday frustrations about housing and food, the crabbers expressed concerns about the way the community was being run and wondered whether it was even a cooperative. A group calling themselves the “Brush Gang” began meeting in the creosote bushes and discussed overthrowing the leadership from within, or leaving to form their own commune. They adorned their clothing with small sprigs of sage to identify one another. A leader of the Brush Gang, Frank Miller, described Harriman as “the most unscrupulous person he had ever met” with a “mania power” bent on controlling all aspects of the community. In 1915, he wrote to his daughter about the mounting tensions the Brush Gang had grown to 83 in number and had set out to “create a true inside of things.”

As criticism swirled within, outsiders also cast aspersions on the community. The Los Angeles Times, a longtime nemesis of Harriman, was the most vocal critic. They published article after article on problems at Llano with titles like “New Wail from Reds’ Utopia” and “Hopes Blasted in New Colony” as evidence of the experiment’s inevitable demise. In 1915, the California commissioner of corporations wrote a report on the colony, calling Harriman a “czar,” expressing concerns about the power structures of the community, and arguing that the corporation was defrauding stockholding members by luring them with inaccurate portrayals of the stock values. The L.A. Times quickly issued an article, “Blistering Report on Job Harriman Utopia,” that suggested Llano was on a swift path to implosion. •

Yet despite the drama and criticism, new residents continued to arrive from Los Angeles, and defenders argued that people were missing the point if they expected Llano to be a fully formed utopia from the outset. “[Y]ou cannot build heaven in hell,” John Dequer explained. Working within the confines of capitalism and the existing legal system, he argued that Llano needed to run as “a business enterprise, conducted on business principles, for practical results” before it could begin to operate as a socialist oasis. Another booster, R. K. Williams, described how people showed up at Llano “filled with idealism and notions of a weird form of democracy that are utterly out of place in an institution dealing with things and practicalities.” He stressed that Llano wasn’t a “Utopian phantasmagoria,” but was comprised of people “dealing with things of life” cutting wood, building homes, making food. In order to do anything more ambitious, they first needed to develop a sustainable way of meeting people’s material needs.

For these and other defenders of Llano, the project of cooperation was inevitably long and messy. As Walter Millsap reflected, “They had to start in with what they had and with who they had”; they had to “feel their way” towards utopia. Llano was an attempt to move beyond abstract philosophizing, an environment where people could get their hands into the soil and join the process of making something with others. “Mankind in mass cares little for abstract doctrines,” Dequer wrote. “They would rather hoe a desert into bloom.” While people worked to build homes and plant hundreds of acres of fruits and vegetables to feed the community, they also began to devise and dream new social and institutional structures that they might eventually grow into.

•

Amidst all the chaos and the frustration, the people who came to Llano repeatedly expressed a shared sense of being in on something together. Harriman believed that the “germ of the new is always within the old,” and that when old institutions “begin to disintegrate, new combinations new institutions” will begin “to take their form,” moving “along new lines” to meet the needs of those who are constantly creating them.

Millsap recalls struggling to find community in Los Angeles, but when he “got into the social life of Llano,” he finally found people who shared his frustration with the conditions of the industrial world, people who wanted to reimagine social structures. Outside of work, members were “bubbling over with exuberance to have a good time,” participating in choruses, mandolin clubs, orchestras, theater groups, arts and crafts groups, baseball teams, football teams, and a constant program of literary discussions and film screenings. They responded to the most challenging moments the storms and interminable general assembly meetings with a defiant conviviality and sense of humor. Millsap recollects “music going on all the time, on every occasion” and people always ready to “go and have a dance.” Mellie Calvert, who was later involved with the Brush Gang, wistfully remembers attending the first Festival and Dance and dreaming with others of what Llano might become: “Because of a shortage of accommodations many young people brought blankets along and after the dance we slept on mounds of new hay that had been piled in the fields. It was a clear moonlit night with wonderfully clear and bracing air, and with bright stars overhead. We felt happy, exhilarated, and confident that Llano del Rio Co-operative colony would, indeed, become a paradise on earth.”

Another way that people joined the collective imaginary of Llano was through debating its future architecture. Although the city was initially comprised of temporary tents and adobe structures, there was the hope that once they had the means, they would completely rebuild the community. Architects, including feminist Alice Constance Austin, put together elaborate models for what this new city might look like. In a series of essays called “The Socialist City,” Austin argued that a “Socialist City should be beautiful, of course,” and the people should be fashionably dressed. Shaped by Ebenezer Howard’s 1898 urban-planning book Garden Cities of To-morrow, Austin’s blueprint for Llano included radial streets with an underground conveyer to deliver food and clothing from a communal kitchen and laundry. She hoped these structures might alleviate the burden of domestic labor and enable female colonists to pursue whatever work was most compelling to them. Instead of following “the ordinary individualistic plan,” Austin’s ideal city was designed to reflect the community’s collective values with architectures “elastic” enough for members to continuously infuse their ideas. Prompting lively discussion, Austin’s plans were an invitation to collaborate on dreaming the future structures of Llano.

Another site where people at Llano experimented with new structures was in the creation of their schools. Starting with the premise that “capitalist education” was a “mill” turning out young people “cut and polished to the same size and degree,” they aimed to design schools that would equip young people for cooperation. Prudence Stokes Brown, a disciple of Maria Montessori, led Llano in the formation of multiple schools a Montessori kindergarten, an elementary school, and an industrial high school all environments in which children could “learn by doing.” At the high school, students oversaw their own 65 acres of garden, built houses, cooked food, and looked after goats, horses, rabbits and (1,000) chickens. As one member, Scott Lewis, put it, “[F]or the average person a knowledge of chickens is more useful than the ability to conjugate amo,” and “it is better to know how to saw a board off straight than to read Homer.” Llano students also participated in self-governance, debating and shaping the structures of their education. Within all the Llano schools, there was a repeated emphasis on practical learning that could be applied to the work of communal life.

Like other structures at Llano, the schools were works in progress malleable and changeable institutions that were meant to grow and form alongside those who participated in them. As a community member put it, one should not expect to look at Llano’s schools and find “a finished project, an exhibit that can be expected without finding flaws.” Instead, they pointed to the Industrial School perpetually in process: “It is not stabilized, even. It is not completed. It is crude and experimental.” The schools, like the social architectures at Llano, were dynamic, ever-shifting, and always-in-formation. They were meant to be inhabited by people, in this case students, who would in turn suffuse them with questions and interests that arose from living in a cooperative society.

In the broadest sense, Llano del Rio was an attempt to create a new social world. In a society where the values of capitalism “Take all you can and keep all you take” prevailed, Job Harriman wondered if it was possible to create the conditions for another social life to flourish: “Can [the creed of capitalism] be overcome by a group of people located in the very heart of such a system, even as it affects the people in that very group? Can a new order of things be established in such a community out of which will grow a new social spirit? Can the pathway to a higher social life be blazed through the thorns and thickets and swamps of capitalism?” Llano del Rio an imperfect, incomplete project was an attempt to live out and convene around these questions. Along the way, the thousands of people who moved through Llano gathering on the porch, sharing meals, dancing late at night, arguing about architectural plans, and helping shape the schools were all part of its social spirit. •

In 1917, as architectural plans for the city were still being debated, the people of Llano del Rio found out that they did not have access to the water they needed. A year before, 20 local ranchers had sued Llano over access to the Big Rock Creek, calling them “socialistic plunderers” who were attempting to “cover the face of the earth.” After a complex and costly legal battle, which led to a curtailed plan to build a nearby dam, it became clear that water would be an insurmountable obstacle. The tensions around water collided with the United States’ entry into World War I. Many members were either drafted or drawn back to the city for higher-paying jobs. With this loss of labor, the numbers at the colony dwindled; leaders of the remaining community made the decision to relocate their venture to Louisiana, where a much smaller New Llano continued for another two decades. Within days of the socialists departing for Louisiana, Llano del Rio was looted by local ranchers. They smashed windows, demolished buildings, and carried off pieces of the hotels, schools, and workshops where people had danced, debated, and tried to enact a different kind of world.

Today, the ruins of Llano remain off of Pearblossom Highway in the Antelope Valley. For over 100 years, this site has been a destination for writers, artists, radicals, and others seeking to glimpse the remnants of an unfinished dream. In City of Quartz, Mike Davis describes returning to Llano del Rio in 1990 “to see if the walls would talk to me.” Instead, he came upon “two twenty-year-old building laborers from El Salvador,” who shared the hopes that brought them to Los Angeles and the realities they had actually found upon arrival.

In their book Bread and Hyacinths: The Rise and Fall of Utopian Los Angeles (1992), Paul Greenstein, Nigey Lennon, and Lionel Rolfe write about how decades of writing on Llano has “piled distortion upon distortion until a recognizable picture” is no longer a possibility. There is a wistfulness in the years of palimpsestic mythmaking about this community. Some read the failed utopia as proof that another way isn’t possible; others hold onto it as evidence that things indeed might have unfolded differently.

When I traveled out to the ruins of Llano del Rio earlier this spring, I was so carsick on the winding highway of State Route 2 that I felt dizzy when I eventually arrived. Wandering past the stone columns and chimneys of the hotel, I found a place to sit, out of the glaring sun, in the concrete foundation of a silo once built for alfalfa storage. Listening to the hum of the trucks whirling by, I thought of a line from a piece that Aldous Huxley wrote on Llano del Rio in 1953: “What pleasure, on a mild night in May or June, to sit out of doors under one’s privately owned cottonwood tree and listen, across a mile of intervening sagebrush, to the music of Socialists!” What music was I listening for now, following the movements of so many who had come out to this small piece of desert over the last hundred years?

After spending weeks looking through the Llano archives, I found it increasingly difficult to make sense of the dissonance between the projected visions of the community and the criticisms of it, from within and without. At first, I found myself seduced by the all-too-familiar narrative of the imploding utopia it was satisfying to see hubristic men, aiming to colonize land and establishing a segregated utopia, encounter the limits of their vision. Reading through letters, meeting notes, and memoirs, I saw clearly that the reality for many who came to Llano often lagged far behind expectations. Like the city of Los Angeles, which was built on speculation and booster mythmaking, Llano was also a chimera a fantasy sold to prospective members as a refuge and escape from their current lives.

Yet, instead of tidily dismissing the project, I found that I wanted to linger in the space between the dream and the failure, to attend to the messy and ever-shifting memories of those who moved through and helped create it. Because at its heart, it seems that Llano was a social experiment shaped and reshaped by the many people workers, defectors, mothers, and children who came to the desert to practice into a different world. Even when they were buried in snow, or out of coffee, or embroiled in fights at hours-long general assembly meetings, they continued to try their hands at a society that valued cooperation over individualism. Did these people find what they were seeking in this expanse of desert? Was it worth it to participate in this ephemeral experiment? As I looked and listened, I found traces of their incomplete dreams and visions all around in letters to loved ones, in photographs, in the glinting shards of broken glass. As one member put it, there is no singular, composite story of Llano: “We must gather as many scraps as we can find.”

•

In a 1962 Los Angeles Times article, “Banker Has No Regrets Over Socialist Colony,” Gentry McCorkle reflects on giving all his money his bank interest, his home, $35,000 to Llano del Rio: “I have no regrets about underwriting the venture. I am sorry it failed. I would do it again if I knew it had a chance of success.” After leaving Llano, he returned to banking and “reaped other fortunes under the profit system [he] sought to defeat.”

In a memoir published the same year, Walter Millsap reflects on Job Harriman at the end of his life: “He died a broken-hearted man, bowed down with the tragedy of the human race, and knowing that there would be a long, weary struggle with the changing of habits before mankind would ever find happiness.”

During the summer of 1917, Mellie Calvert attended a picnic with 50 members of the Brush Gang. Despite being many of the colony’s most vocal critics, they expressed their continued “faith in those ideals of co-operation [which] had been strengthened by their experiences at Llano.” The picnic was a celebration of the life they had in the community, and “nobody said anything about being sorry they had participated.”

Trying to recall one of the colony’s May Day celebrations, Millsap laments not having a “phonograph record” memory of his time at Llano: “I am sorry that it is impossible to repeat what was said, or to convey to you the mannerisms, the tones used and the spirit that ebbed and flowed like a wave.”

Nobuo Sekine

Phase of Nothingness — Earth Circle, 1975 bronze, 90 x 90 x 20 cm

© Nobuo Sekine Estate, Courtesy of the Estate and Blum & Poe, Los Angeles / New York / Tokyo

Financial thrillers and global capital

by Michelle Chihara

On an unusually rainy evening in Los Angeles this March, at the Thomas Mann House in Pacific Palisades, two investigative reporters from Germany gave a talk about a financial scandal known as “cum-ex.” Against the backdrop of a mid-century modern terrace, its polished cement looking dull and gray in the storm, the pair flashed through a series of slides about international tax embezzlement.

A relatively small drip of funds from the German cultural ministry sometimes supports talks like these in the name of Mann’s legacy. When the capital of German literary life was exiled to Los Angeles around the Second World War, the author built a home that now still hosts salons in the name of democratic cultural exchange.

The reporters began their story with a blurry image of a “stick” flying through the air a tiny thumb drive packed with financial data. The stick, they said, was leaked to Felix Rohrbeck and Oliver Schröm when they were reporting for the newspaper Die Zeit: a heroic young woman at the tax authority blows the whistle, and then an editor at Die Zeit begins spying on the young reporter! The editor tips off his banker buddies that their scheme is about to be uncovered, but he can’t kill the story. The once-respectable Warburg Bank sends teams of lawyers to threaten the magazine. The international nature of the fraud brings together a team of journalists from across Europe usually bitter rivals for late-night sessions of data analysis and encrypted uploads over pizza. And now, after almost a decade, the facts of the abuse are known: cum-ex trades have robbed treasuries across the globe of upwards of $60 billion. One German banker is actually in jail.

In the United States and Germany, legal restrictions have tightened around the scam in question, and that banker, a senior executive at Warburg, was sentenced to more than five years in prison. This is mild progress, at least in comparison with the sketchy mortgage-backed derivatives that brought us 2008, for which few financiers faced any repercussions. But in the Palisades, the reporters ended their presentation with a caveat. They showed recent footage of a dramatic undercover sting operation in which Schröm posed as a billionaire for a meeting in the City, London’s financial district, complete with a luxury watch on his wrist and shell companies on the books. Hidden cameras from an investigative TV show were filming as Schröm sat down with a man who promised more profits from the trick, still being played in Dubai and London. When Schröm-asbillionaire asked if this deal was still called cum-ex, the man in the footage said, “I’d call it event driven ” The fraud, it was clear, was still going down.

The technicalities of the cum-ex fraud are complex. The nickname comes from the Latin for with and without, as in with and without a dividend tax (and it’s pronounced, ahem, to rhyme with womb-X). It worked like this: banks and traders find stocks that pay dividends to shareholders. The way many tax authorities deal with tax on dividends is to refund money to shareholders after the tax was paid elsewhere. So, traders found ways, using short sales and stock loans, to make it appear briefly that there were two owners for a single stock. And then the banks, in that brief window, got governments to pay the tax rebate on a single dividend stock more than once. The first tax refund on the stock is legal. But there were never two owners; there was just fancy financial footwork to create the illusion of multiple owners. And the second time the rebate gets paid out, it’s just theft. At their worst, scammers can get tax authorities to pay the rebate three times, or five times.

So, while tax evasion can also be illegal, and the derivatives in 2008 existed in an ethical gray area, cum-ex is straight-up fraud.

The cum-ex technicalities present just one example among many of the obscene fortunes available to those who exploit financial loopholes, in a global system riddled with mechanisms that allow for enormous secrecy. Call it “dark money” or “illicit financial flows,” “offshore finance” or “money laundering,” tax avoidance or tax evasion however you refer to it these things warp democracies. The dollar damage from cumex dwarfs California’s budget deficit this year. It’s not legal, and in the United States it’s even more outlawed than before, but in systems that reward and create vast flows of secret funds, the line between legal and illegal loopholes becomes not only blurry but somewhat meaningless. In many ways, loopholes define the lacy patterns of the entire fabric. Financial secrecy is woven so tightly into the texture of global capitalism today that pulling at any one thread tugs on every aspect of financial power.

The shenanigans needed to make cumex work involve using short sales and stock ownership certificates to make it appear as if multiple parties own a stock at the same time. It’s sneaky bookkeeping. When Rohrbeck and Schröm approached this situation, as storytellers, they knew that as soon as you start talking accounting details, especially to people who don’t stand to make millions from them, eyes glaze over. That’s why the Germans showed footage of Schröm posing in his ersatz billionaire’s sports jacket, with an ascot, in a bugged hotel room. It’s hard to give the victims of cross-border tax scams a face and a story. The numbers are mesmerizingly and disconcertingly large, so the Germans emphasized the thrill of the chase.

In France, Le Monde called cum-ex “the biggest robbery of the century.” But in the United States, there was little coverage.

That night in the Palisades, I tried to convince Rohrbeck and Schröm to consider making a podcast version of the story. They seemed ambivalent: they kind of wanted to move on.

Cum-ex isn’t the biggest or even the most spectacular example of financial malfeasance in Raymond Baker’s new book Invisible Trillions: How Financial Secrecy Is Imperiling Capitalism and Democracy and the Way to Renew Our Broken System. Not even close. In fact, it gets about a page, out of some 260 pages, in a chapter called “Broken Banks.”

Baker, founder and president of the think tank Global Financial Integrity, has spent decades pushing the world to address the issue of “illicit financial flows.”

He’s one of the foremost experts on these matters and has been able to move the needle in Washington, DC, with GFI, which he started after his first book on illicit finance. “We’ve got to elevate this issue,” he told me. “I read stories for 50 years about drug dealers who then laundered their money. Throughout those 50 years, the flow of drugs into the United States has never been curtailed and the price of drugs has never gone up. Fifty years of stories haven’t affected the reality. They never got to the bigger picture, which is that we are facilitating the money that keeps these guys in business.”

When Baker said this to me, he could only be described as upbeat. He is an energetic figure who has played a major role in the passage of crucial legislation around foreign assets and money laundering. His fluency in the details of the existential threat, combined with his somewhat counterintuitive positivity, make him eminently persuasive.

For Baker, cum-ex is just another loophole in the lacework, more openly fraudulent perhaps but otherwise barely distinguishable from the rest of the porous mess. His final sentence about cum-ex in Invisible Trillions reads: “This stunning example of turpitude is likely to roll on through the courts for years to come.” On the next page, BNP Paribas gets a few paragraphs for violating US sanctions, and then Wells Fargo gets just shy of three pages for aggressive policies intended to abuse and cheat depositors. “A few more examples will illustrate the degree of depravity seen in recent years,” Baker writes, before devoting a few words to Goldman Sachs and the 1MDB scandal out of Malaysia. Invisible Trillions is a bird’s-eye view, in page by page snippets, of the planetary situation. But the challenge for all of these financial writers, whether they’re deep in a single scheme or high above at ten thousand feet, is how to delineate the inhuman scale of the problem while getting it to land in human terms. How do you make bookkeeping in Dubai seem important in Los Angeles? •

Baker doesn’t pause on the lurid details of the 1Malaysia Development Berhad kleptocratic boondoggle because he’s not writing a financial thriller. He does call it “one of the biggest financial scandals of all time,” and this one you may remember. In the island nation of Malaysia, a financier named Jho Low gained control of a sovereign wealth fund. Working with the prime minister, the mild-mannered Low, sometimes described as an Asian Great Gatsby, pilfered billions of dollars from the

Malaysian people. He squandered it on van Goghs and Monets and diamonds; on a see-through piano, a jet, and a white Ferrari he gave to Kim Kardashian; and on a yacht named Equanimity. Plus, in a supremely ironic move that seems too excessive to be real, Low funded Martin Scorsese’s 2013 film The Wolf of Wall Street, in which Leonardo DiCaprio plays a big-spending trader who’s indicted for money laundering and securities fraud, serves some country-clubbish prison time, and reinvents himself as a lavishly paid sales coach and motivational speaker. (A true story, of course.) After the case came to light, the Department of Justice repossessed some of Low’s paintings and yachts. DiCaprio returned a Picasso, a Basquiat, and Marlon Brando’s Oscar for On the Waterfront all gifts from Low. A very small handful of executives at Goldman Sachs had to step down. The stunning turpitude continues to roll through the courts.

Low made headlines for his debauched evenings spent buying bottle service for Paris Hilton’s entourage, for the seethrough piano that wouldn’t fit out the door of a model’s apartment in New York, and for the political donations funneled through one of the members of the Fugees. But Baker doesn’t have time for color reporting. He seeks to draw attention to the systemic distortion of which Low is only one small part.

Baker writes that 1MDB was a “hugely destructive scandal that took advantage of every particle of opacity available within financial secrecy structures.” He imagines that John C. Whitehead, Reagan’s secretary of state and former chairman of Goldman Sachs, is rolling over in his grave. Baker is sure, that is, that Whitehead stood for something fundamentally better, that this bastion of the Washington Consensus would have disapproved.

(It’s possible. On its good-hair days, the Washington Consensus looked like coordination among US institutions, the World Bank, and the International Monetary Fund, intended to help emerging or developing countries enter Cold War markets. On other days, its critics saw it as a means for the United States to keep everyone under the dollar’s thumb. Meanwhile, elements of the secrecy system were set up and strengthened by Reagan’s CIA during the Iran–Contra affair.)

Low flaunted his ill-gotten gains across Manhattan and Hollywood and had no problem finding friends at Goldman Sachs. But if you’re looking for the full picture of complicity and shamelessness, you have to pick up a financial thriller like Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World (2018). It’s by a pair of Wall Street Journal correspondents, Tom Wright and Bradley Hope, who paint a vivid picture of eager financiers shifting the shells around and helping Low create plausible deniability.

As with cum-ex, 1MDB was ultimately taken down by in-depth financial reporting from a number of intrepid journalists. The complexity of global finance today means that journalists must cooperate, often via secure online databases and across national boundaries. Before Wright and Hope, the environmentalist and anti-corruption advocate Clare Rewcastle Brown broke the 1MDB story on her blog Sarawak Report. For the journalists who do this kind of coverage, it takes more and more legwork to get these stories, with less and less glamor or payoff once you do. So, they work together in ways they never used to. Every now and then, someone buys the rights for a TV show. Today the rights to Billion Dollar Whale are evidently owned by the playwright David Henry Hwang and actress Michelle Yeoh.

Financial journalists make a living from thrillers like these, which bring attention to individual cases. But especially when made into TV shows, thrillers have a tendency to wrap things up with some kind of happy ending. For example, while Billion Dollar Whale highlights many systemic problems, it ends with the Department of Justice going after the stolen loot. And the DOJ did eventually recover $700 million of all that was stolen by Low. But if audiences feel that this means that the Malaysian people were made whole, then we are not focused on the system of financial secrecy.

In Invisible Trillions, Baker concludes his discussion of 1MDB by writing about the American lawyers who made money with Goldman Sachs on the way up and then profited from protecting the thieves on the way down. A couple of Goldman Sachs execs got slapped on the wrist, and the crooked prime minister got sentenced to some jail time. Things happened, to other people, while the lawyers walked away as usual. Any sense of an ending focused on the DOJ suggests that some kind of moral order has been restored.

Today, Jho Low is still free and still has Equanimity. He was last seen floating somewhere near Macau.

Hope, the Billion Dollar Whale co-author, recently said in his Whale Hunting newsletter that Low has probably been working with the Chinese government, potentially spying, around their Belt and Road Initiative. China is one of the world’s

Nobuo Sekine

Phase of Nothingness — Cut Stone, 1970 stone, stainless steel, dimensions variable production shot, Genoa, 1970 photographer unknown © Nobuo Sekine Estate, Courtesy of the Estate and Blum & Poe, Los Angeles / New York / Tokyo largest sources of illicit money, and its “anti-corruption” campaigns can be hard to distinguish from moves to consolidate the Party’s authority. It has likely folded Low, the avatar of Malaysian kleptocracy, into its massive global infrastructural expansion. The Belt and Road Initiative is something like China’s version of the Washington Consensus, a push to place Chinese power and Chinese currency at the physical and financial center of international relations. Low is just a pawn in their game. But even if the Chinese eventually allow Low to be punished under US and Malaysian jurisdiction, Beijing is unlikely to take any broader bids for financial transparency kindly.

The United States is the biggest dog in the hunt for financial accountability, and at the same time, it’s the fastest growing sinkhole for invisible money. Even if, as Baker suggests, the US backs wider efforts to make finance more transparent, Beijing likely won’t take that as friendly good-government policymaking. Even if we elevate this issue, and especially if we shout it from the rooftops, any US actions against financial secrecy may well be perceived as international aggression.

Once it has metastasized through the whole structure, secrecy is just another form of financial power.

There are at least six or seven small sections of Invisible Trillions that summarize material other authors have laid out in entire books. The subjects of all three of David Enrich’s financial thrillers the manipulation of the London Interbank Offered Rate, Deutsche Bank, and white-shoe law firms get a few pages in Trillions.

Glencore, the octopus-like giant in mining and commodities, was the topic of veteran investigative reporter Ken Silverstein’s 2015 book The Secret World of Oil. Glencore remains in the news for its labor practices around the extraction of cobalt in the Congo.

Baker mentions the Panama Papers and the Paradise Papers, projects released by the International Consortium of Investigative Journalists as part of an international effort that made troves of leaked documents from the systems of secrecy available to reporters. Hundreds of reporters cooperated to make the data in these papers accessible to their respective markets scores of teams like cum-ex’s in those late-night, pizza-fueled story sessions. Panama and Paradise were the focus of investigative reporter Jake Bernstein’s 2017 book Secrecy World, which was later made into a movie by Steven Soderbergh called The Laundromat (2019).

This epic trail of destruction or that greatest scam all become part of Baker’s larger list, illustrating that the Deutsches and the law firms and the laundromats of the world are still going strong.

By zooming in on particular people and cases, authors lure readers in and make the debauchery and the suffering real. By zooming out, Baker hopes to gesture towards solutions that might go beyond putting a lone trader in jail.

Underlying all of this is the fundamental question: how do you get people to care about something ubiquitous but invisible, something that’s everywhere and nowhere all at once?

•

The problem is hard to name. “Offshore” sounds like something peripheral and distant. It no longer captures the way that

South Dakota and Wyoming have become centers of secrecy. “Illicit financial flows” is precise but a bit Latinate. “Secrecy world” and “invisible trillions” are mysterious but, like “flows,” can make the thing seem diffuse, impossible to pin down.

Try Moneyland a place that exists outside of any one nation, outside of any one government’s ability to regulate a particular currency or market, but hovering wherever there’s great wealth. As long as you have enough funds to get Deutsche’s client services department on the phone, or to buy a passport from Malta, you can visit Moneyland. It exists between and above the laws, beyond any jurisdiction, but always within reach of a penthouse and a $22 cocktail.

The term comes from the British writer Oliver Bullough, whose approach to financial journalism combines fast-paced narrative with a metaphorical apprehension of the entire situation. “How do you get away from an inherently depressing and complicated story?” he said to me. “It’s spinach journalism, right? As in, it’s good for you, but no one actually likes it it’s not necessarily what you want to pick up at the airport. So how do you put some butter in it?”

Bullough’s subtitle to his 2019 book Moneyland, The Inside Story of the Crooks and Kleptocrats Who Rule the World or, in a different edition, Why Thieves & Crooks Now Rule the World & How to Take It Back summarizes the goal of his efforts to map this elusive global space. Bullough quotes UC Berkeley economist Gabriel Zucman: “Our planet as a whole has a net debt, a net financial debt, which of course is not possible at a global level.” The inflows and outflows don’t match up. So, Bullough writes, “One more country is needed in the spreadsheet to make the columns match: let’s put it between Monaco and Mongolia. That seems apt.”

Moneyland begins with Paul Manafort. Manafort, like Jho Low, worked with a kleptocratic president, channeling money out of Ukraine for himself and spending it on luxury goods and real estate. And once Manafort became Trump’s campaign chair, this story had direct consequences for American and Ukrainian, rather than Malaysian, democracy. Bullough includes more character development and color than Baker in his book, but he too works to distance himself from the lurid details. He visits the dumpy offices of one of Manafort’s shell companies in a nondescript part of London. Instead of focusing on the “ostrich-skin jackets and luxury condominiums,” he writes that he wants to understand what links Manafort to the pedestrian part of the city, hiding behind its lack of glitz. This approach will give “a glimpse behind the personalities, into the hidden workings of the financial system, into the secret country that I call Moneyland.”

Bullough’s next book, Butler to the World: How Britain Helps the World’s Worst People Launder Money, Commit Crimes, and Get Away with Anything (2022), turns its attention to the history and the role of London’s financial center. It has the most lucid account of the Eurodollar that I have ever read. The book describes England as a butler to the kleptocrats who stepped into the power vacuums created by the end of the Cold War. All of the City’s sophistication and expertise, at the center of global finance, now cater to the desires of a small handful of men sucking money out of the periphery. “It’s become an incredib- ly competent well-spoken assistant,” he told me.

Butler’s account of the men and women whose actions created and consolidated the current system is itself exceedingly British, devastating in its wry understatement. “There is a saying,” Bullough writes in his account of “low white tax morale” in the colonies, “that if you’re accustomed to privilege, equality feels like oppression, and that is how many Europeans responded to the changes sweeping across Africa and Asia.” The story of England’s transformation into a financial butler is also the story of the postcolonial world slipping away from the promise of self-governance and democracy, bit by bit, as the sticky fingers of financiers reached around the globe.

Bullough sometimes puts his sense of humor to work running bus tours in London. Modeled on the star tours that gawk at actors in Hollywood, his tours map the web of fancy homes that reporters have identified as belonging to kleptocrats. These mansions, which stud London’s posh neighborhoods, usually sit empty, driving up prices by parking illicit financial flows in shell-company-owned, money-laundering properties. In February, Bullough told me in an email that they had another tour coming up, but he seemed fatalistic about it. He said it would only highlight “the failure to do much about oligarchs.” He warned me of another wave of EB-5 visas about to hit Los Angeles. The program is another source of dark money, and he warned of serious issues. A group of investors who used the EB-5 visa program is already in court with unpaid contractors on a mega-development, now sitting stalled, in Downtown L.A.

In 2011, the former editor of The Guardian, Peter Preston, reviewing Nicholas Shaxson’s Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens, called it “a dismaying Big Bang of a book: a chronicle of capitalism’s frailty and foulness that digs far beyond its tax haven title and indicts the system that renders such crookedness not merely possible, but entirely predictable.” Preston admired the book, to some degree, but wrote: “Really, we’re talking about a universal way of business life here, about a system so entrenched, so formidable in the lobbying, so familiar in its assumptions, that even 2008 can’t blast it away.” He criticized Shaxson for making “the conspiracy seem too vast and all-encompassing.” Preston basically felt that Shaxson’s book on financial secrecy and malfeasance was too depressing.

In 2011, Shaxson wrote: “Offshore is how the world of power now works.”

•

Sometime in 2002, I was introduced to Stephen Pizzo, a one-time real estate broker turned investigative reporter. I was trying to write about the collapse of Enron, the energy company and financial boondoggle built on weather derivatives. I wasn’t in a newsroom, but I wanted Pizzo’s advice. How could I go deeper on this kind of story?

I had reason to imagine he might have some helpful tips. When Pizzo bought the small-town Russian River News, he almost stumbled onto one of the biggest financial scandals of the 1980s. Savings and loans were major players in the financial world at the time, and like the recently failed Silicon Valley Bank, they came up against an asset liability mismatch. Pizzo, along with one of his staff and a reporter for the National Thrift News, co-authored the most important book about this early crisis, Inside Job: The Looting of America’s Savings and Loans (1989).

On the dry outskirts of Sebastopol, Pizzo and his wife rode up on a motorcycle to meet me and my boss at the time, but he wasn’t much interested in talking. Inside Job had been a national bestseller, sure, but Pizzo felt that the book hadn’t done much good. The banks got bailed out and the same cycles of deregulation and bad financial behavior rolled on. I don’t remember Pizzo seeming bitter, but he basically wished me luck and cruised away.

In March, Silicon Valley Bank’s uninsured depositors were made whole. Venture capitalists on Twitter, who had been trumpeting Elon Musk’s libertarian ideas about “disruption” as long as they were making a killing, suddenly had remarkably little shame about demanding state help. They evidently felt that, as “innovators,” they deserved the private profits until it came time once again to socialize the losses. Most of the big tech companies have money parked in secrecy world, in which crypto plays a new and amplifying role.

As Pizzo might have pointed out, there are so many ways that we have been here before. •

I still think about Pizzo, but in a way, I’m not sure what I expected him to tell me. Nor am I sure what I hoped to hear from Baker or Bullough. They had written their books; what more can financial reporters do?

Many of the books mentioned here, and a slew of those unmentioned, focus on a specific aspect of the system, a single case where justice might be served, or a specific fix, and each one mortgage-backed securities, student loans in higher ed, payday lending, inter-bank lending manipulation, cum-ex double-counted payments, misinvoiced trades seems necessary. Solving any one of these issues might get us closer to a saner financial system.

According to Americans for Financial Reform, closing the carried interest tax loophole on private equity executives alone could raise between $1.4 billion and $18 billion annually. This one tax loophole seems worth a fight.

But whose fight is it? Each book, each issue, returns me to the question of how you get people to care. Those three words carried interest tax — are eye-glazing by themselves. And with each loophole fixed, we know others will pop up, like Whac-aMole.

I hold Pizzo in my mind’s eye, riding off on his Harley.

The layers of secrecy created by anonymous shell companies permeate the global economy. Lobbyists from private equity, banking, oil, real estate anything that Goldman Sachs has ever touched would go to bat against any effort to peel these layers back. I put this to Raymond Baker as a question: If we try to shut down shell companies, won’t all of the rich and powerful rally against it? Because shell companies benefit all of the rich and powerful? He basically said sure, maybe. We gotta do it anyway. And the US, as the center of global finance, has to lead the way.

We can’t have both transparency and competition for incoming international flows. The race to a bottom lined with tax havens and economic development zones must be stopped.

It’s easy to call for doing everything everywhere all at once zoom in, zoom out, take small steps towards overall change! But with each financial investigation and economic critique that I read, I risk being overwhelmed. There’s no one villain at the wheel, the problem is deeply systemic, and even when we identify capitalism itself as the source of the problem, the conspiracy can seem too vast. It’s clear that I’m not alone in feeling overwhelmed. When the sense of being powerless makes people feel too helpless, many turn to cult-like online communities, with violent solutions.

It seems pedantic to suggest that financial books and journalists should point to specific collective solutions, efforts being made to fight the issues raised. Pedantic but apt. Thus: A relatively large group of labor organizations and civil rights groups has rallied around the carried interest tax loophole, best represented by a group called the Hedge Clippers (in reference to hedge funds). The loophole almost got outlawed but was then kept open by politicians taking money from private equity PACs. This setback is disheartening, but the coalition behind the fight is not. And it has no reason to disband once that loophole is closed. The coalition itself elevates the issue.

Or maybe people should just start showing up at the registered address for shell companies in their neighborhoods. Even if the trillions are invisible, perhaps moneyland can be occupied.

Nobuo Sekine is a pivotal figure of the postwar Japanese arts movement Mono-ha (“school of things”). Sekine’s guerrilla earthwork Phase —  Mother Earth was central in the conceptualizing and subsequent naming of the movement, considered by many the predecessor to more site-specific and transient works of the period. The term designates a young group of artists in Japan from 1968–73 many of whom were art students graduating or pursuing postgraduate studies around the time of the student riots in that country. Sekine’s own artistic and philosophical interests included topology, being, and matter through his explorations of space, materiality, reflection, and phenomenality.

The works characteristic of Mono-ha arranged the natural and the constructed, often using materials like wax, earth, lead, and tar. Monoha’s key features were impermanence, an

Nobuo Sekine

Phase—Mother Earth, 1968 production shot, 1st Kobe Suma Rikyū Park Contemporary Sculpture Exhibition, October 1 – November 10, 1968 photographer unknown from left: Susumu Koshimizu, Katsurō Yoshida, Nobuo Sekine © Nobuo Sekine Estate, Courtesy of the Estate and Blum & Poe, Los Angeles / New York / Tokyo emphasis on nature that resisted the homogeny of Western modernism both in the sense of philosophical thought and industrialization, and a grounded contextualization of works as site-specificity and elemental and material properties whether it was nature or industrial. In this sense, Mono-ha referred not to a reductionism of the works nor form, but rather a resistance of the commodity of the art as a representative object or the artist as sovereign. Instead, these works emphasized the make up of the object and its process including eventual decomposition or undoing. Archival images of Sekine’s process of earthworks-making, therefore, seem necessary in presenting works indicative of Mono-ha. In Sekine’s work, and continued in the tradition of more Mono-ha works, we cannot isolate our impressions of and on nature from nature, but ultimately submit to its unseizable force / becoming. facing page: Nobuo Sekine

Phase—Mother Earth, 1968 production shot, 1st Kobe Suma Rikyū Park Contemporary Sculpture Exhibition, October 1 – November 10, 1968 photographer: Susumu Koshimizu © Nobuo Sekine Estate, Courtesy of the Estate and Blum & Poe, Los Angeles / New York / Tokyo