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In Counterfeit Crime, economist, historian, and criminologist R.T. Naylor offers a scathing critique of government policies on transnational crime and terror.
According to the author, “[w]hat we are seeing is a regression to 19th Century politics in the face of 21st century problems, economic, financial, social, and, not least, environmental. There is a trivialization of political vision, a narrow grab-and-run ideology infecting (perhaps fatally) our major institutions, not to mention social values.”
The following excerpt comes from the introduction of Counterfeit Crime:
These are perilous times. A whole string of insurgencies, revolutions and social upheavals threatens the West from places whose very names cause shivers to run up and down civilized spines – Afghanistan, Iraq, Yemen, Egypt, Libya, Syria … even Mali! That one must have sent prime-time political pundits scrambling to consult Google Earth before the on air light started to blink. Toss in the storm clouds that gather over Iran at predictable points in the US electoral cycle, and it is easy to lose sight of the fact that there is another “war” raging out there, perhaps the biggest and nastiest yet – and one that “we are losing.” This time, though, the threat comes not from the Comintern – that was neatly dispatched not through a sneak attack by US ICBMs but through a frontal assault by Harvard MBAs. Rather the source of the new menace is the emergent Crimintern that threatens nothing less than the breakdown of the international trade and financial order. This threat, the experts say, reveals itself in several distinct ways that the civilized world ignores to its peril.
First, while smuggling is an old story, something changed dramatically in recent decades. Because of “globalization” along with unprecedented technological change, government control of borders weakened sharply just when the variety and volume of goods (along with people and money) crossing them accelerated greatly. This change in the pattern of world commerce applies not just to legal trade but, most alarmingly, to illegal as well.
Second, today’s smugglers do not conform to the old “organized crime” model of centrally administered, transnational hierarchies typical when things like “narcotics” dominated underground traffic. Increasingly at work are informal networks with multiple links in their chains of operation, embracing people, companies, even countries as distinct “nodes,” whatever that’s supposed to mean. These networks can decentralize and disperse, making them harder to crack. Worse, since they use super-exploited labour and pay no taxes – quite unlike today’s respectable corporations with millions locked up in Asian sweatshops and billions stowed away in tax havens – they can outcompete legitimate competitors. These, in turn, may be forced to turn to illegal means, including partnerships with those same networks of illegal traders. And apparently there are now more places of refuge, a more accommodating infrastructure for illegal trade and finance, and, of course, more corrupt officials along with bent businessmen to make it all work.
Third, while part of this illicit trade, as before, involves absolutely banned things like recreational drugs, especially problematic (and, no doubt, underappreciated by a drug-addicted enforcement apparatus) is the growing propensity for fakes and counterfeits of legal goods to crowd markets and drive legitimate firms out of business – a transformation neatly summarized in a 2013 Wall Street Journal story headed: “Fake Goods Rival Drug Profits for Asia’s Criminals.” Since the Wall Street Journal is a Rupert Murdoch newspaper, its opinion has to be given as much credibility as it deserves. The result is that, according to no less an authority than the former editor of Foreign Policy magazine, “Global illicit trade is sinking entire industries while bolstering others, ravaging countries and sparking booms, making and breaking political careers” – something apparently aberrant in the history of legal trade.
Fourth, in the last couple decades the rapidly growing illicit component of world trade has embarked on “a great mutation” that must have rung alarm bells in every intelligence service in the proto- Western world, not to mention dinner bells in the lavish homes of the world’s biggest arms dealers. “It is the same mutation,” says that former editor, “as that of international terrorist organizations like al-Qaeda or Islamic Jihad … The world’s first unmistakable glimpse of this transformation came on September 11, 2001.” Therefore illegal trade is not just an economic and moral challenge; it also “offers terrorists and other miscreants means of survival and methods of financial transfer and exchange.”
Fifth, along with the explosive growth of illicit traffic has come the undermining of governmental powers not just at the borders – something that all those travellers being fondly fondled by the US Transportation Security Agency might question – but deep within, what with all their international connections, their political influence and their newfound, ill-gained wealth. Indeed, traffickers have become so rich as to corrupt not just this or that official but entire political parties and governmental systems, particularly in places where the illegal sector threatens to, or actually does, dwarf the legal.
These five attributes combined mean a transformation of world economics and politics, and of their interconnections, adding up, in effect, to a systematic criminalization of both. That, in turn, requires transforming the response. This cannot take the form of further protection to home industries. Such efforts in the past simply fostered the rapid growth of contraband, as the conventional wisdom of economic orthodoxy repeats with a vehemence oddly inconsistent with any evidence. That would be a surprise, no doubt, in marginal countries like Britain, the US, and Germany in succession, which built their industrial might on high tariffs and subsidies for domestic industries. Instead the challenge requires a more nuanced and coordinated response. This involves using new technologies like biometrics to track perpetrators and fancier security devices to detect fakes and copies. It calls for redesigning governments to make bureaucracies more “flexible” (i.e., freer from normal moral or legal restrictions?). It requires “bringing together cops, lawyers, accountants, economists, computer scientists, and even social scientists into tightly-integrated, highly functional teams with operational latitude,” a term that would not be out of place in a Pentagon press release. This “is a challenge … But it is not insurmountable.”
No one has to take any of this on faith. Supposedly hard data to back up such assertions “come from the most reliable sources possible – usually international organizations and governments or nongovernmental organizations whose work is generally deemed [by whom?] to be serious and reliable.”8 Take, for example, the “relentless rise of money laundering,” a phenomenon so extensive now that IMF data puts laundered funds at 2–5 percent of world GDP, an impressively fine-tuned estimate of the ratio of an unknowable to an unknown.
These are alarming developments, indeed. The only problem is finding any evidence they are actually true.
Read Naylor’s interview in the McGill News Magazine
To learn more about Counterfeit Crime, or order a copy online, click here.
For media requests, please contact Jacqui Davis.
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