Compared to the legal economy, the illicit economy has grown at twice the rate. What factors explain this fast growth?
Smuggling, trafficking, and transnational criminal organizations have always existed. But with the exception of narcotics—which for reasons of plant biology and economics has long been the world's most globalized industry—many of these illicit economies were local or regional in scope until quite recently. Since the 1990s, however, there has been a rapid integration of markets, for both political reasons (structural adjustment programs, the end of Soviet socialism, the Washington Consensus) and technical reasons (the Internet, mobile telephony, improved transportation infrastructure). Just as these changes have helped many legal businesses to go global, they have also enabled former street corner thugs to become global gangsters.
The withdrawal of states from their commanding role in many economies and the declining capacity and authority of many states (including states in the so-called developed world) have opened up operational spaces for what I call "deviant globalization"—human trafficking, drug dealing, gun running, cross-border waste disposal, organ trading, sex tourism, money laundering, transnational gangs, piracy (both intellectual and physical), and so on.
The structure of the current global economy is not designed for equitable, plodding growth; it's designed to reward opportunistic, risk-seeking innovators. It follows logically that illicit industries (which will naturally be led by opportunistic, risk-seeking entrepreneurs) form a particularly high-growth sector. Were one to construct an investment portfolio of illicit businesses, it would no doubt outperform Wall Street.
Globalization tears down traditional national structures and opens doors to illicit actors who fill the void. What can be done to stop this process?
The first step is for governments to realize that the growth of the illicit economy is neither a minor irritant, nor something that can be eliminated. Rather, it is a permanent feature of the contemporary global order, which needs to be actively managed. There are two main ways that governments and nonprofits typically go wrong in dealing with deviant globalization. The first is by more or less ignoring it, or downplaying its significance. The second is by thinking that the deviant manifestations of globalization can somehow be eliminated or separated from the legal manifestations. (This latter fallacy is what leads, for example to the fruitless, demoralizing campaigns like the war on drugs. The street price of narcotics has steadily fallen on the streets of almost every country for the last three decades, which tells you that supply has been growing even faster than demand—a telling indicator of the effectiveness of the war on drugs.)
As long as we continue to combine massive disparities of wealth and power, with a desire to control or stop the flows of certain goods and services, there will continue to be a nearly endless supply of people willing to move goods, people, and services at a premium price. The challenges of deviant globalization are best dealt with in a regulatory framework, not via law enforcement. Of course, such an approach flies in the face of moralizing about these issues.
Is this trend worldwide or more prone to affect certain countries or regions?
This is a global trend, but one affects different regions in different ways. Countries prone to deviant globalization tend to share certain family resemblances: a weak or fragmented central state; long, poorly guarded borders; and a large supply of or demand for goods with dubious moral properties—drugs, antiquities, valuable minerals, exotic wildlife, human organs, sex, oil, highly enriched uranium, and so on. The traditional world leaders in deviant globalization have been probably Russia, Nigeria, Brazil, China and the United States—though today the most deviantly globalized place on earth may be Iraq.
But it would be a mistake to think of the geography of deviant globalization primarily in terms of states, for deviant globalization has a complex microgeography that largely ignores state boundaries: it spans the archipelago of slums that runs from the inner cities of the United States, to the favelas of Rio de Janiero, to the banlieus of France, to the almost continuous urban slum that girds the Gulf of Guinea from Abidjan to Lagos; it extends across the cocaine supply chain that links the mountains of Colombia, to the slums of São Paolo, to the waterways of West Africa, to the noses of tourists in the Netherlands; it traverses the mountains of toxic garbage that move from the dustbins of rich countries to the landfills of poor ones; and on and on. You will find manifestations of it in every city and in every household that has any connection to the global economy. It is inseparable from the global economy.
You consider the illicit actors a political force. In what way?
The underlying political process associated with deviant globalization is the disaggregation of the "sovereignty bundle" of powers associated with the high modernist liberal state. In many places the state is no longer (if, indeed it ever was) the de facto governing authority, in the sense that it does not control the delivery of fundamental political goods, such as security, infrastructure, education, and health care. Different pieces of that bundle are being parceled out to (or, more commonly, grabbed by) a variety of actors: tribal leaders, gangsters, NGOs, religious leaders, transnational and local corporations, mercenaries, ethnic militias, and so on. The particular combinations vary from place to place, and there is a great deal of path dependency. In many places, the same actors who control the resource flows associated with deviant globalization are also de facto providers of "state-like services" such as security or infrastructure. And naturally enough, the common people who rely on these providers tend to align their political loyalties accordingly.
What's new in this situation is that in many cases these "political actors" have no interest in actually becoming a state or taking over an existing state. They’re happy to wield state-like authority and power, while enriching themselves via dubious business operations. I’m thinking here of groups as various as the Mahdi Army in Iraq, the PCC in Brazil, the 'Ndrangheta in Italy, or Laurent Nkunda's crew in Congo. None of these organizations plan to declare sovereign independence and file for membership of the United Nations. What they want, simply, is to carve out a space where they can do their business and not have the state mess with them. This means that, unless a state confronts them, they're disinclined to challenge states directly—directly challenging the state is expensive, and generally bad for business. As this new class of post-state political actors takes over functions formerly monopolized by states, they and their constituents lose interest in the state. From a political perspective, therefore, deviant globalization leads to (and also is facilitated by) the proliferation of jurisdictionally ambiguous spaces where sovereignty as it has traditionally been conceived simply no longer exists. It’s a self-reinforcing dynamic.
Western pundits and politicians like to describe these sorts of spaces with highly misleading terms such as "failing states" or "undergoverned zones." The implication of such terminology is that the people living there want to be just like us, but that somehow they're unable to get there. But such a belief is, if I may be blunt, a narcissistic delusion masquerading as political science. Contrary to what the bien-pensants claim, most so-called failing states don't want to get fixed. In many of these zones, the local powers that be are quite content with these novel, informal political arrangements. It allows them to make fabulous amounts of money running globe-spanning commercial empires, while being recognized as the "big men" within the communities that they care about. They have no desire to attain the West's ideal of an inclusive, welfare-providing modern state. These guys are "postmodern" in the sense that they realize that the West's form of modernity will never include them, and they're charting an entirely different path. It's very different from the classic revolutionary movements of the twentieth century.
Apparently the 'Ndrangheta, the Calabrian mob, earned 44 billion Euros last year and is bigger than the better known Mafia. What happens with all this money and how does it affect the future of – in this case – Italy?
The case of the 'Ndrangheta in Calabria—and perhaps even more, the Camorra around Naples—is illustrative of how the licit and illicit global economies are increasingly inseparable. The crucial point about these loose organizations is that they control not just the drug and flesh trades in their regions, but that they also own or control enormous portions of the licit economy—sweat shops, garbage disposal, ports, factories, construction, and so on. There’s virtually no business that has any presence in Italy that they don't have their hands on. The legal businesses get capital from the illicit business, and also serve to launder the illicit gains. Sometimes people talk about economic development as the "solution" to corruption in the Italian South; but the truth of the matter is that corruption IS development in the South of Italy.
Saturday, August 16, 2008
The Politics of Deviant Globalization
I'm speaking in a couple of months at the European Futurists' Conference on the topic of "deviant globalization." I just did an interview with them regarding the contents of my talk, the best parts of which I excerpt below:
Posted by Nils at 8/16/2008 06:27:00 PM