Crime Inc.

Multinational corporations benefit from globalization. So do counterfeiters, drug dealers, human traffickers and gun runners.


Andrew Leonard
November 22, 2005 5:30PM (UTC)

So maybe you think Web-based e-mail, Internet cafes and disposable cellphones are cool. Guess what? So do terrorists, cocaine dealers and sex-slave traders. Or maybe you're impressed with the dazzling abilities of modern corporations to outsource their operations and manage amazingly complex global supply-and-production chains. Well, you know, Russian mafia looking to offload Soviet-era weaponry and Chinese military officers brokering DVD-piracy rings are equally adept.

We live in an era of ever more porous international borders, exploding world trade and advances in technology that have transformed the globe into a cozy neighborhood where cities as far apart as Bangalore, India; Shanghai, China; and Bogotá, Colombia, are next-door nodes on the Internet. Lumped together under the term "globalization," these changes have altered everyone's lives -- not least those members of the working classes in developed nations who are being crushed against the anvil of cheap labor in countries like China and India.

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But it isn't just modern multinational corporations that have been taking advantage of the new order, argues Moisés Naím, the editor of Foreign Policy magazine and the author of "Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy." Globalization is also making crime pay. Drug smuggling, gun running, human trafficking -- they're all booming like never before. Illegal markets for organ transplants, endangered species, nuclear technology, intellectual property of all descriptions -- every imaginable form of criminal activity is on the rise, increasingly profitable, and seemingly impossible for governments to stop or even slow down.

As Naím writes, "Global criminal activities are transforming the international system, upending the rules, creating new players, and reconfiguring power in international politics and economics. Ultimately, it is the fabric of society that is at stake."

How did this happen? Naím offers a cogent recap: Since at least 1990, a confluence of forces has remade the world. The spread of advanced science and technology has collapsed distance and evened competitive playing fields. Tariffs have been lifted, organizations like the World Trade Organization and treaties such as the North American Free Trade Agreement have removed obstacles to the free flow of goods, and limits on the movement of capital have been vastly reduced. At least as significant, vast geopolitical changes -- the end of the Cold War, the emergence of China and India as economic giants, the status of the United States as the lone military superpower -- have transformed the balance of power.

Naím's format for proving his thesis is straightforward. In successive chapters he examines different aspects of global criminal behavior and shows how the rules of the game have changed over the past decade and a half. So we get an overview of the boom in the weapons trade, the surge in illegal immigration, the explosion of intellectual property piracy, and, of course, that old standby, the drug trade. In each case, a similar story is told: Government efforts to control criminal behavior are increasingly ineffectual because the bad guys are taking advantage of the new realities of globalization to operate more flexibly, efficiently and quickly than slow-moving bureaucracies.

Just like state-of-the-art multinational corporations, criminal organizations are taking advantage of modern communication systems, transport networks, and computers to manage complicated logistical operations and deliver specialized products to customers. Naím's basic argument is that the same factors that make it possible for Wal-Mart to put Chinese-made appliances in your shopping cart at incredibly low prices are allowing criminals to operate with unprecedented freedom.

"Illicit" suffers from a couple of problems of execution. From a distance, the focus on crime gives the book an attractively seedy flavor, but close-up, Naím's dry style undercuts what should have been more of a romp. His case-study approach, in which he speedily helicopters from one topic to another like some kind of roaming hummingbird of globalization doom, risks coming off as superficial. The reader is left wishing for a little more detail and a little more grit.

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Naím's mission, however, is not to dwell on the criminal acts themselves, but to stress the commonalities between all these different expressions of illicit behavior. Criminals, like multinational corprorations, have transcended the limitations of geographic location and local political control.

As a consequence, argues Naím, globalization isn't just lowering prices for sports bras and computer laptops, it's also making the world more dangerous for everyone. Who knows if your new car contains flawed counterfeit parts that might break down and cause an accident, or if that Viagra you bought off the Net is actually rat poison? When terrorists can move nuclear bombs as easily as kilos of cocaine, who can sleep easy?

Taken at face value, the apparent surge in all levels of criminal activity is alarming, but it also presents us with a seeming paradox. As Naim notes, if we want to look for a historical starting point to the process that is currently being described as "globalization," the most likely place is that moment in 1989 when the Berlin Wall came down and Eastern European totalitarianism officially collapsed. Not only did the end of the Cold War give American-style capitalism the moral authority to set itself up as the arbiter of world economics, but it also set in motion the loosening of borders all over the world.

At the time, many of us, on the left and the right, thought that the end of the era of "mutual assured destruction" was a pretty good thing. Sure, it might be hard to sleep at night now as we worry about the illicit trade in human kidneys, ecstasy pills and pirated Harry Potter movies, but it wasn't any picnic waking up to the daily reality of two armed-to-the-teeth superpowers threatening to bury each other permanently. So what if the end of the Cold War set off an international crime wave? I'd make that trade again. Wouldn't you?

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In such a context, there are times when the relentless pounding of bad news assembled by Naím comes off as a little alarmist. One can also quibble with some of the statistics supplied. In the chapter looking at intellectual property piracy, he appears a little too trusting of figures provided by the American software industry that detail supposed job losses and revenue shortfalls attributed to copyright violation. Such figures are almost certainly bloated, and the comfort with which Naim bandies them about might lead one to question some of the other statistics proffered.

But beneath the doomsaying, there is an underlying thesis connecting Naím's case studies that is hard to argue with: nation-states are losing their ability to control what happens within their borders. And in Naím's thinking, if we want to have any hope at all of changing this, the world is going to have to work together.

"We need to consider the possibility that clinging to old ideas about sovereignty may be stunting the evolution of the nation-state and thus weakening the security of its citizens," he writes. "It may sound difficult, even improbable, but national sovereignty, security, and public safety are more likely to be ensured by a government's close collaboration with other nations allied in the fight against illicit traffickers than through continuous attempts to plug leaking borders with sealants that do not work."

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But there's a little problem standing in the way of making it work. And it's called the United States.

One of Naím's ongoing arguments in "Illicit" is that despite the seeming differences, illegal trade of all kinds -- drugs, endangered species, counterfeit clothes or illegal immigrants -- shares things in common. For instance, they are all natural responses to pricing imbalances -- if it costs next to nothing to grow poppies in Afghanistan or coca in Bolivia or to make copies of Prada purses in the Pearl River delta, but the finished product will be worth much, much more in New York or London, then there will be a market for that product, no matter how dangerous or risky the job of getting it from one place to another. So the same basic force that pushes Western companies to set up shoe sweatshops and semiconductor plants and computer assembly factories overseas -- make iPods for pennies in Shanghai, sell them for hundreds of dollars in San Francisco -- is boosting a global crime wave.

It is virtually impossible to resist the power of pricing pressure from any one point on the globe. This truth has been made self-evident over and over again -- most obviously in the course of the United States' spectacularly unsuccessful "war on drugs." No matter how big the penalties a government attempts to impose on illicit behavior, if there is a substantial profit to be made in a particular line of work, someone will fill that gap. Fines, jail sentences, even murder by the competition -- they're all impotent threats in the face of the laws of supply and demand. No single local government, police force, or aggressive non-governmental organization can "stand between millions of customers desperate to buy and millions of merchants desperate to sell."

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Naím acknowledges this has always been true -- "as it always has done, illicit trade simply flows with the tide. Only now, the tide has become a swell stronger than the world has ever before seen."

So how do we change this? In lockstep with other recent books critical of aspects of globalization, Naím spends 90 percent of his time detailing just how deep and intractable the problems are and then, at the end, declares unconvincingly that if we could just generate the political will to do so, we could solve all these problems.

First, he suggests that an array of privacy-obliterating technological innovations will give law enforcement the upper hand. If identifying microchips are embedded in every product, biometric scanning is built into every passport, and video surveillance extends to every corner of the globe, he suggests, criminals will have no place to hide. But this argument, even aside from its panopticonic horrors, sidesteps one of the basic points he himself makes about how advances in technology are adopted by criminals as quickly -- or more quickly -- than they are by legitimate businesses and law enforcement.

More to the point is his prescription that governments have to work together if they are going to have any hope of stuffing all of globalization's evils back into Pandora's box. But Naím's own reporting undermines the likelihood of this happening. As he repeatedly demonstrates, the United States, the largest market for goods and services in the world, is a country that at the moment is decidedly unenthusiastic about global cooperation.

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The U.S. is just as often an obstacle to collective action as it is a supporter. Naím notes that a United Nations conference held in 2001 on "Illicit Trade in Small Arms and Light Weapons in All Its Aspects" was derailed when the U.S. refused to endorse language that would have restricted "sales to nonstate actors," declaring that this would violate the Second Amendment of the U.S. Constitution, and, in the words of NRA CEO and executive vice president Wayne LaPierre, would place "a global standard ahead of an individual country's freedom."

So, writes Naím, "since late 2004, for instance, it is no longer a criminal offense in the United States to own a military grade assault weapon. As Andres Pastrana, the former president of Colombia, told me, 'While our police officers and soldiers are being constantly gunned down by narco-guerrillas, the U.S. faciliates the possession and commerce of the world's most dangerous machine guns.'"

The U.S. has also refused to sign the Basel Convention, which puts limits on the trade of hazardous waste (160 other countries have signed it). Similar other examples abound. Again and again, the United States is shown to be a major part of the problem.

It might seem trite to state that the problems of globalization will not be solved without a global approach, but what that means strikes right at the heart of the all-important question of how human beings organize themselves politically in the decades to come. If we are to live together in peace and prosperity, it seems inevitable that the world's nations will need to work together with ever greater levels of political integration. But when the world's mightiest superpower, the United States, is the least willing to cooperate on some of the most troubling issues of the day, it's hard to be optimistic.

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Perhaps the most distressing realization to come from Moisés Naím's careful recounting of globalization's evils is that the only solution that offers any hope at all is an apparent political impossibility.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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