The Illicit Economy

http://globalsociology.com/2009/08/24/the-global-illicit-economy/

The video above is a 28-minute speech addressing the Global Illicit Economy, the underbelly of international trading which deals in goods and services primarily deemed illegal by most governments. The talk gives an overview look at some of the international black market’s main cash cows, and how the legal economy and illegal economy are two parts of the same whole, more synchronized than I think most of us thought.

The orator, Nils Gilman, of Global Business Network, defines deviant globalization, the main concept discussed, as the unsanctioned global flow of goods and services that violate bourgeois ethical sensibilities. These include activities such as international drug dealing, kidney trafficking, toxic dumping, smuggling illegal aliens/ sex slaves, arms trafficking, money laundering, and international identity theft. Gilman says that traditionally, these crimes are thought of as independent of each other, but in actuality, they all come together to form an interwoven illegal economy that typically is two to three times more profittable than the publically traded global economy.

Gilman states that the idea of rogue bands of drug smugglers or people in dark basements hacking into bank computer databases are far off the mark. We are seeing an increasingly professional illict network and that ,"in a professionalized industry, risk and reward are strictly and strongly correlated, and in so far as governments attempt to criminalize certain types of activities and apply law enforcement in one part of the supply chain, they are going to drive innovation in that part of the supply chain, but they are also going to increase the profit margin."

Gilman also compiled a list of principles about the Deviant Global economy, and they are as follows:
1) Perfectly legitimate forms of demand can produce perfectly deviant forms of supply
2) Uneven global regulatory structures create arbitrage opportunities for deviant entrepreneurs
3) Pathways for legitimate globalization are always also pathways for deviant globalization
4) Once a deviant industry professionalizes, crackdowns merely promote innovation
5) States themselves undermine the distinction between legitimate and deviant economies
6) If unchecked , deviant entrepreneurs will overtake the legitimate economy
7) Deviant globalization presents an existential challenge to state legitimacy

This was a fascinating topic to look at briefly. I vaguely knew of the economic command that the international drug trade held, but never knew how much the role of weak centralized governments play in acting as a host to the cancer that can metastasize throughout the international community. I think this would be an interesting topic to further explore and research.

Gilman concluded the speech with this: "The underlying political process... is really about the disaggregation of the sovereignty bundles of power 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 no longer has control over the delivery of political goods, such as security and infrastructure and education and so on... They simply want operational space, what I like to refer to as temporary autonomous zone, where they can do their business and make money and they become the big men in their communities, and as far as they're concerned, this is a political system that is working. This is why I think it's important that we stop talking about failed states. These places may look failed from the point of view of the very civilized shores of Washington DC or from London, but as far as the people who are the leaders in those places, from their perspective, its not necessarily failed at all, in fact its working quite well... These people are a reflection of the failures of the promises of development I believe, and these people have given up because they don't believe there is any truth to these promises that the West is going to deliver them if they follow the West's prescription of an inclusive, democratic, welfare state. They are post-modern in that they don't believe modernity will ever include the likes of them. I want to leave you with one final thought on these guys, we typically like to think in the West that we represent the future and that the developing world represents the past, and that somehow if they develop properly, they are going to look more like us, as we continue on our glorious technological way. I'd like to submit to you... that the developing world represents our future, not the other way around. And that these kind of phenomenon which are being pioneered in the Niger Delta, may in fact be alot more like what our world looks like in the next 20 to 30 years."