Throughout history, laws of prohibition have existed to protect people alongside a legitimate, free market; yet illicit markets have developed and flourished. This book examines historical attempts at prohibition throughout human history and, relatively more recently, prohibition of alcohol at the beginning of the twentieth century. With prohibition, many took to their bathtubs, brewing up concoctions, while others developed sophisticated supply chains through Canada. While prohibition was designed to curtail consumption of alcohol to encourage a purer, righteous society, the result was the reverse. Organized criminal networks increased in strength, eventually challenging the authority of the state and its institutions through corruption and violence. Criminal networks became wealthy because, like good entrepreneurs, they took a risk, invested money, developed product lines, and expanded the business once challenges, and challengers, arose. Business quickly spread into other illegal areas such as prostitution, gambling, extortion, and small arms. The Thompson submachine gun was the weapon of choice for any up-and-coming gangster. Weapons were of course necessary to protect your way of lifeāand life. If one had a complaint, one could not go to the police; you had to be the police. Enforcement through violence quickly became the norm and militias, most notably the soldiers of the Cosa Nostra effectively āranā the city usurping the authority of the state.
Many in the United States during the 1920s soon realized that prohibition had to be repealed to curtail the wealth of criminal networks. Such an attempt was of course futile given that they already developed product lines to replace alcohol. Like any good business owner, the criminals recognized the warning sign. Thus, criminal networks did not disappear, but rather they were just getting started. By the 1970s and 1980s, criminal networks like the Cosa Nostra expanded their business into drugs of all sorts: cocaine, heroin, and marijuana, among others. Going beyond geographic neighbors into South America and Afghanistan, supply chains took on a new form reflecting any contemporary business under conditions of globalization. Globalization was āthe process through which an ever-expanding free flow of ideas, people, goods, services and capital leads to further integration of economies and societies worldwide.ā1 Globalization also facilitated illegal enterprise. As wealth exploded for those trafficking drugs, similar supply chains emerged and crime became global in scale. Weak states in the international system were hijacked by drug traffickers to create a safe haven, or infrastructure, for production and banking, as well as a hub for transport. This was done through corruption and sometimes through force. Once this was achieved, the international system became unstable as a great power like the United States tried to eradicate organized crime and provide some stability and security. Once authorities cracked down in one area, criminal networks simply moved their operations to other states and other commodities. This book thus places in context the progress of illicit networks from the twentieth century to the twenty-first century.
A major marker of the twenty-first century is the reliance on the Internet. Criminal networks now organize under such cyber-infrastructure, organizing under what we call the Deep or Dark Web. The Dark Web is the unindexed part of the web which cannot be found via Google or other such browsersāa particular browser that cannot be traced or tracked. This, coupled with the use of bitcoin, an untraceable unit of electronic currency, allows people to buy commodities, both legal and illegal. This innovation has allowed individuals to buy and sell goods such as drugs, weapons, child pornography, and violent videos, as well as services like prostitution, hitmen, and other questionable and harmful amenities.
Furthermore, other sophisticated supply chains exist, to facilitate not only drug trafficking but also human and organ trafficking, as also of small arms and even weapons of mass destruction (WMDs). Since there is serious demand for these commodities, there are ready suppliers doing whatever needed to extract exorbitant profits regardless of penalties. Markets are simply a meeting place for buyers and sellers. Profits and product are major motivators that allow paths to cross.
While states try to stop these forces from meeting, any effort thus far has remained futile. Due to the anarchical nature of the international system (i.e., the absence of an overarching order) attempts at coordination of governmental policies have been difficult. Weak states are predisposed to corruption due to already weak governmental institutions. Further, economic underdevelopment endemic to weak states makes the production and export of illicit commodities even more profitable when compared to the alternative of working in the field or in a factory.
The Dark Side of Globalization: The Economics Behind Illicit Markets
Globalization can be understood as āa process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactionsāassessed in terms of their extensity, intensity, velocity and impactāgenerating transcontinental or interregional flows and networks of activity, interaction and the exercise of power.ā2 This concept describes increased interconnection between people and businesses. This offers investors an incredible opportunity: access to markets across borders. For instance, while Coca Cola performed well within the United States, it enjoyed greater success once it opened in the rest of the world. Produce like banana, saffron, chocolate, and coffee that grow in warmer climates have been consumed in colder regions of the world. Vast networks and infrastructure, both private and public, help facilitate these legitimate trades. Governments allow legitimate container ships to travel along certain quays, locks, canals, and across the open seas. Shipping and receiving companies take these goods into port and deliver them to shops and warehouses all over the world. Clearing houses and international banks also ensure the money goes to the right people. The effort to establish a globalized network of international production, trade, exchange, and finance has brought the world to us.
In this sense, forces of globalization bring buyers and sellers together to achieve their goals of profit and enjoyment. Many have praised this system for bringing the fruits of the world to our doorstep. However, there have been negative effects and outcomes that remain outside the control of the state. This book will concentrate on the attributes that make up illicit markets, that is, product suppliers, consumers, and the infrastructure that brings them together. In doing so, we can analyze the individual elements to understand how they work with the other parts that make up the whole.
Suppliers
Alongside the global licit market of bananas and chocolate, exists a parallel and powerful illicit market. Out of our global culture of disembedded liberalism came the idea that the more money you made, the better off you would become. Karl Polanyi postulates:
In other words, the market mechanism, that is the forces of supply and demand to retrieve both profit and product, has the potential to destroy society. People all over the world are under extreme pressure to make ends meet under this capitalist system. Some may choose a life of crime for quick returns over other, more legitimate means. A telling interview with an organ trafficker personifies this. The man once worked as security at a pub and now finds vulnerable people who are willing to sell their body parts for cash: Syrian refugees. The organ trafficker, named Abu Jafaar, was interviewed and justified his position contending, āWhat can they do? They are desperate and they have no other means to survive but to sell their organs.ā4 In three years, he has helped facilitate over 30 organ sales, typically kidneys, which are bought by donors for $8,0005 and fetch a exorbitant $160,000 in the United States.6 The markup on one kidney is thus far more attractive than working as security at a pub. More tragic is the realization that such is also rational for the victim, as having little alternative:in regard to labor, land ā¦ such a postulate cannot be upheld. To allow the market mechanism to be sole director of the fate of human beings and their natural environment indeed ā¦. would result in the demolition of society ā¦ robbed of the protective covering of cultural institutions , human beings would perish from the effects of social exposure; they would die as victims of acute social dislocation through vice, perversion, crime and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed.3
āIām exploiting them,ā he says, āand theyāre benefitting ā¦ I know that what I am doing is illegal but I am helping people,ā āThatās how I perceive it.ā The client is using the money to seek a better life for himself and his family. āHeās able to buy a car and work as a taxi driver...