France: OPED: Crime, The World’s Biggest Free Enterprise

CRIME, THE WORLD’S BIGGEST FREE ENTERPRISEThe Dark Side Of Globalisation

By linking scarcity to price, the universal gospel of liberal thought teaches that exploiting scarcity is the fountain of all wealth.

It follows that the foundation of any righteous economy is the market players’ ability to get hold of the scarce commodities that will make them rich. But what is scarce in a world where the development of new technologies makes distance a thing of the past and “niches” of scarcity in the tightest nooks and crannies accessible for exploitation?

This new ability raises an important question: is it really right to produce particular goods or services and trade in them? The free marketeers tend to forget that, while the laws of the market do entail a degree of self-regulation, this does not mean that society has no right, through its elected representatives, to set the rules of the game and say what may be traded and what may not. Without that, the only law that remains is the law of the jungle where man is reduced to an object that can be turned into money and marketed at will.

Sadly, the deregulation that is so much a feature of today’s globalisation has not learned any of this. Quite the reverse, it has opened up a new market on a planetary scale, the depths of which have hardly yet been plumbed and which people would rather not admit exists.

It is in fact the dark side of economic and financial globalisation, the constant reminder of a truth the horrors of which people would prefer to conceal.

It is the market in law, exploited by crime.

Since crime is a phenomenon inseparable from any human community, every society, therefore, not only has the crimes it deserves, but also those that resemble it and make it what it is. A global society claiming to be built on the ruins of national laws without trying to rebuild social standards on another level, changes the agora into a vast bazaar where even governments rush to sell their regulations to the highest bidder.

The scarce thing is not, of course, crime, but what it exploits: the law, which three developments have transformed into a market.

First of all, countries have opened their borders wider to criminal trades more than to any other kind. Doubtless they had little choice, since the real pioneers of globalisation, the 1960s drugs traffickers, obviously did not ask anyone’s permission before organising trade in the world’s most expensive and profitable commodity on a global scale.

But history is not without its irony, as the American authorities have found to their cost. Worried about the revival of the heroin market in the early 1970s, which they blamed entirely on French chemists and traffickers, they demanded that the government of the day root out the famous French Connection, then based in Marseilles, which it did. But the only concrete result of its elimination was to encourage secondary outbreaks all over the world, as trafficking was taken over by the Sicilian and North American mafias. The networks’ centre of gravity then shifted to the United States, that great trading nation and apologist of free trade.

The rest we know.

What are we to learn from this? Crime has become one of the most flourishing economic activities, run by professionals who have taken on board all the rules of modern management. Capable of a flexibility unmatched in the formal economy, they are able to exploit all the scarce resources offered by economic, political and social instability anywhere in the world.

They have made it the substance of their activity and the source of their tremendous profits.

If we were asked for a brief definition of today’s serious crime, it is the ability to take advantage of the differentials produced by the deficiencies in political, economic and social regulation anywhere in the world and at any time.

An exodus of refugees fleeing a war-torn country is held to ransom by the mafia-organised clandestine emigration networks.

A country whose underprivileged resort to the synthetic paradise of drugs for a few moments’ oblivion makes its thousands and millions of addicts easy prey for the world’s fortune hunters.

What country is not so affected?

A country where the gap between rich and poor and social disparities are so great that the most wretched have only their bodies to sell is swooped upon by networks of traffickers doing a most profitable trade in human beings, be they women, children, workers or sources of organs for transplant.

The list of social ills has become endless.

Some societies are rich but have their poor to exploit; others are poor, but have their rich to exploit them, poverty having become the choice raw material with which to manufacture a commodity made valuable by society’s taboos.

Because they are banned by laws they are powerless to enforce.

The two other developments that have made the law a thriving market for those whose trade is to break it both follow from the first.

They, too, are now ever present.

Finding themselves unable to control the internationalisation of the economy, governments began by doing what wily tacticians have always done: pretend to be behind what is beyond their grasp. Like Ronald Reagan and Margaret Thatcher, whose pragmatism rarely worried about scruples, governments were quick to lower the barriers to trade and the movement of goods and capital.

Once they saw it paid in hard cash, they cared little for what they were really letting loose.

They simply forgot, or perhaps they were unaware, that the first internationalised economy was already that of crime, with a considerable lead over every other sector when it came to exploiting scarce commodities.

But in so doing they crossed a threshold, the dreadful import of which is only just beginning to be recognised. Not content with no longer being able to control the flows of trade in goods, services, and especially capital, governments embarked on a mad race to harness financial flows and draw the most profitable activities to themselves. To that end, they removed the last constraints on cross-border movements and trade.

For the criminals who had, very quickly and unaided, learned to exploit all the resources of world disorder, this was the opportunity not only to entrench their lawless trade in our crisis-ridden societies, but to profit from them even more, ploughing their ill-gotten gains back into an obliging economic and financial system always greedy for fresh capital and increasingly careless of its origin as deregulation progressed.

The third stage, and doubtless the most perverse, is only the continuation of the first two. Without it, global economic and financial deregulation could not have taken off in the way it has. It is, in fact, the development of offshore financial centres.

Better known as banking and tax havens, as time has gone on, they have in particular become police and legal havens where all the world’s laws are conscientiously bypassed.

Paradoxically, they use the rules of a disappearing world, where sovereignty was defined in terms of territorial control, to make world economics and finance completely virtual.

If these obliging centres of international liberalism were used only for tax evasion, the wrong they did to an honest economy, while no doubt great, would nonetheless be kept within bounds.

It is even conceivable that the governments of the industrialised nations, being directly affected by the loss of resources, would easily have found ways to limit the damage.

But the problem is of a completely different nature, and it is because governments’ direct interests are not affected, or because they gain much more than they lose, that the practices of these offshore centres have been allowed to prosper.

They have completed a further stage in the process of “desovereignisation” by using their very sovereignty as a factor in the most thriving world trade.

They enact laws whose only purpose is to escape the legal requirements of other countries, whatever the motive.

It is strange to note that the last sovereign territories, that is those capable of pitting their own laws against the international community with impunity are either microstates, whose international sovereignty is often vague or legally doubtful, or parts of the territory of a country that has been admitted to the family of nations but which protects the activities that come there to hide for that very reason.

While the right to interfere is claimed in order to settle certain local conflicts, the sacred principle of national sovereignty it still invoked to prevent anyone having any influence over countries that sell their sovereignty and their laws to the highest bidder.

Those who, by simple accounting tricks, are able to export or expatriate their wealth or their activities to these black holes of world economics and finance do so only with the complicity of their own countries of origin. Why have they been so ready to accept the worst of perversions of a principle of sovereignty made a mockery by cynical “hooligan countries” or “bandit territories”? Because they are so good at invoking the rules of a sovereignty that is still the foundation of international relations, even if completely obsolete in practice.

It is a fiction that suits everyone, since it avoids having to take up the terrible challenge thrown down to the short-sighted fools of globalisation. This globalisation has been built on a frenzy of deregulation, and to turn back the tide would mean venturing to build a new world order the very mention of which provokes a shudder.

All the rest is only for show. Intoned like a litany at every international summit, the declarations of heads of state and government come to nought because no-one is willing to raise the key issues.

The results of the battle against money laundering, corruption, fraud and international trafficking are derisory.

They represent only a tiny fraction of a lawlessness that is exploding everywhere. International crime amounts to hundreds of billions of dollars every year, all of it quietly recycled in the formal economic and financial systems without anyone really worrying about it.

Governments and police obviously state the contrary, hailing as so many victories the adoption of a few documents like the recent Organisation for Economic Cooperation and Development (OECD) convention on combating bribery of foreign public officials, or the acceptance by a growing number of countries of the 40 recommendations of the Task Force for International Financial Action (FATF). But such imperceptible progress is up against the brick wall of an iron logic: there is no point in banning what we lack the means to prevent, unless we only want to give the impression of acting while doing nothing.

The measures absent-mindedly taken against practices encouraged elsewhere result at best in the sentencing of a few random scapegoats who, while doubtless fully deserving their fate, are merely alibis for all the rest, who will never be troubled.

This does not mean that we should stop pursuing criminals, but it does mean that we are not doing so today because we lack the necessary resources. What we must do is to draw the conclusions from globalisation and recognise that the international community is entitled to impose the minimum standards of the rule of law on the gangster states and their private and public accomplices. But then we would have to go without the enormous profits from the shameless exploitation of the law market.

Translated by Malcolm Greenwood

MAP posted-by: Derek Rea