Out to sea: yes, offshore banking is an outrage. No, it's not a metaphor for capitalism.

Offshore: The Dark Side of the Global Economy By William Brittain-Catlin Farrar, Straus and Giroux, $25.00

If America needs a new enemy, the Cayman Islands might be a refreshing choice. They're dismayingly wealthy, temptingly close by, and, with a population of only 41,000, surely defeatable. Any post-war occupation and reconstruction phase would probably last under 24 hours, including swim breaks.

Luckily, we're also miffed at them. John Kerry singled them out during the 2004 campaign, complaining, "There are enough brass-plate companies down in Georgetown, the Cayman Islands, different places, to make anybody in America sick when they look at their own tax bill." Tax-sheltering aside, there's also a Caymanian coziness with companies that later go bust--according to one investigator looking into Enron, "We found 441 entities setup in the Cayman Islands," most of which were "inactive shells." Even the Islands' essential selling points--tax-free banking, adventurous financial instruments (of the not-legal-in-some-states variety), sweeping secrecy laws--seem to carry the whiff of, well, prison.

Then again, before we summon the destroyers, we should consider that there are worse offenders. Like Nauru. It's the world's smallest independent republic, an unlucky island occupying 8 square miles barely above the Pacific Ocean. When $70 billion disappeared out of Russian banks in 1998, they found their new home in Nauru. Not that anyone could really follow the trail: Nauruan law, at the time, required no recordkeeping for financial transactions (it has since been changed). The Cayman Islands look downright stuffy by comparison.

In other words, the problem is bigger than just the Cayman Islands. Today, over 60 nations currently offer some variation on the no-tax-no-tell banking formula, and, according to the International Monetary Fund, as much as $7 trillion in financial assets are now parked offshore. Secrecy laws in these shelters remain expansive, which means that questionable types can still find cover. As for the effect of such havens on the United States, it is estimated that they cost the Treasury at least $50 billion a year in tax revenue.

But how worried should we really be? Former BBC producer and corporate investigator William Brittain-Catlin offers one answer: very, very. His book Offshore: The Dark Side of the Global Economy takes us through the downfalls of Enron, Parmalat, the Bank of Credit and Commerce International, and any number of other unlucky--or simply predatory--entities, showing how each managed to find a friend in the Cayman Islands and the world of offshore finance along the way to ruin. For Brittain-Catlin, this world represents more than financial shenanigans. "The offshore system today," he writes, "is to corporate, private, and criminal wealth what the nineteenth-century interior was to the bourgeois and what the crowd was to the criminal: a cover behind which to hide their traces from modernity, where the criminal is masked as a bourgeois and the bourgeois is unmasked as a criminal."

If that analysis sounds a bit overwrought, it's because it is. Brittain-Catlin has certainly chosen a fascinating and important topic, and Offshore contains a lot of remarkable stories of mischief, and, sometimes, even intrepidness. (The Cayman Islands make for an unlikely success story--from a place whose economy not that long ago depended on rope weaving and turtles to the world's fifth-largest financial center.) Overall, however, Offshore reads like an ambitious effort that never quite got under control.

The avalanche of material amassed by Brittain-Catlin overwhelms without making a clear case. He supplies a history of the Cayman Islands, an account of at least 10 different scandals, an introduction to the state of Delaware, an update on efforts by the Organization for Economic Cooperation and Development (OECD) to tame offshore havens, and a history of philosophy from Rousseau to Kant to Marx. This is not easy stuff to weave together; the difficulty becomes apparent early on. What's more, in an odd literary choice that somewhat defines the book, Brittain-Catlin attempts to apply to the world of offshore finance the theories of the critic and philosopher Walter Benjamin, who killed himself in flight from the Nazis in 1940.

Finance is abstruse; so are Walter Benjamin's writings. Chances are, then, that using one to help explain the other is not going to clarify things for an audience versed in neither. True, juxtaposing complexities gets a decent response in certain sectors of academia--witness Jacques Lacan drawing on the world of high math to assert that the "erectile organ" is "equivalent to the square root of minus one." But when Brittain-Catlin devotes a chapter to tracing Western thought from the Enlightenment until today and attempts to tie the "secret realm" of "the historical bourgeois" to the rise of "offshore freedom and onshore control", some readers may find themselves wishing Thomas Friedman would step in to help by comparing it all to an ice cream cone.

The truth is that Brittain-Catlin's grudge does not really seem to be against offshore financing. He's angry at capitalism, period. The logical question of "So, what are you saying we should do about offshore financing?" is unanswered in the book and, as far as Brittain-Catlin is concerned, unnecessary. "There is little distinction," argues Brittain-Catlin, "between the good and bad use of capital in the global economy." And so there is no answer to the question--at least, not until after the revolution.

Meanwhile, we are left to wonder what on earth to do about offshore banking havens, assuming we're planning on hanging on to capitalism for the time being. After all, such places can sometimes have a function that isn't simply mischievous. Who can blame those Argentines who foresaw possible financial unrest and parked their life savings outside of the country before disaster struck in 2001? Or those businesspeople in countries with poor legal systems and unstable banks who choose to conduct their deals through more reliable offshore institutions? But privacy and economic freedom lose their appeal when they also destroy pension funds here at home or give shelter to tax-dodgers and money-launderers. And even the proudest Cato fellow would surely concede that a banking system such as the one that used to exist on Nauru has no constructive role to play outside of growth industries such as the Russian mafia.

In the end, taming the offshore world depends a lot on how much we want to do it. The OECD, of which the United States is a member, can do a lot to increase pressure on uncooperative places that refuse to open their books. The Cayman Islands are already far more cooperative about working with tax investigators than they were a decade ago. Nauru has effectively been put out of business. True, all these improvements may conceal a much larger problem that severely threatens us all. (If so, there's probably a different, better, book in it.) But, for the time being, I can't help thinking that the trouble is manageable. And it's not because I, too, have a bank account in Nauru.

T. A. Frank is a reporter-researcher at The New Republic.