The clear and obvious merit to offshore banking

That offshore banking is one of the very terrors of the modern world is one of those things widely accepted. Yet it's possible to rework Joan Robinson's observation that the exploitation by capitalists is nothing compared to the misery of not being exploited by anyone. The existence of offshore banking does indeed limit the depredations that domestic governments can make upon our wallets, something very much better than there being no such limits to what they can do.

As Tyler Cowen points out:

Given this background, I’d like to speak up for offshore banking as a significant protection against tyranny and unjust autocracy. It’s not just that many offshore financial institutions, such as hedge funds registered in the Cayman Islands, are entirely legal, but also that the practice of hiding wealth overseas has its upside.

He then gives the example of Saudi Arabia where all the rich people have been locked up in a hotel until they "voluntarily" hand over some goodly portion of their wealth to the State. Then:

A recent study shows which countries are most likely to use offshore banking,......The top five countries on this list, measured as a percentage of GDP, are United Arab Emirates, Venezuela, Saudi Arabia, Russia and Argentina, based on estimates from 2007.

We do generally think that - as Adam Smith pointed out with his invisible hand comment in WoN - that domestic employment of capital is a jolly good idea. Offshore provides the escape hatch by which capital so deployed cannot simply be abstracted by said State. Thus reducing the risk of such deployment, thereby increasing the amount of it.

Precisely because offshore reduces the ability of the State to tax - in however a democratic or authoritarian manner -  it makes us richer. Which is a fair old justification for an economic practice really, us all getting richer being the point of having an economy in the first place.

Precisely because offshore provides a protection of sorts against confiscation that limits the amount of confiscation which is even attempted. Limiting the power of the State isn't the flaw, it's the point.