Abstract
The flags of convenience (FOCs) shipping system promotes laissezfaire global capitalist development and has become dominant in providing the legal framework for ocean commerce in recent decades, as it has largely replaced the national flag shipping system. FOCs reduce the powers of nation-states in taxing, owning, and regulating property; controlling competition; setting wage rates and working conditions; and providing environmental protection. The growing use of FOCs arises from ship owners'' worldwide shopping for laws that they are willing to pay for-to ensure the strongest private property rights and neo-liberal capitalist conceptions of efficiency. FOCs are offered to foreigners by tax havens or offshore financial centres in small states such as Panama, Liberia, and the Marshall Islands. Flags from these open registers have a crucial role in drastically reducing transportation costs, vastly increasing the scale of maritime trade, and providing viability to globally integrated systems of production, distribution and consumption, as well as shifting power away from traditional centres of influence. FOCs push for a low tax, low wage, libertarian system of global capitalism, yet they unintentionally contribute to chronic instability-bubbles, over-capacity, and severe downturns in shipping and the wider global political economy.
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