From Salon:n “McMafia,” author Misha Glenny takes us on a startling tour of the new international underworld, documenting the hidden costs of an unregulated global free market.By Laura Miller
Apr. 16, 2008 | In 2003, a joint operation of British intelligence, the Bulgarian police, the U.S. Drug Enforcement Agency, Spanish police and the Bolivian Special Antitrafficking Force pulled off a bust that netted the largest amount of cocaine ever seized. The drug was hidden among blocks of medicinal clay destined for Madrid and also, authorities soon discovered, mixed into 770 boxes of powdered mashed potatoes set to be shipped to Varna, Bulgaria, via Chile. A couple of years earlier, a Colombian drug cartel (the source of the shipment) had smuggled a chemist into Bulgaria, where he trained Soviet-educated chemists to extract the coke from various seemingly innocuous substances.
For Misha Glenny, a journalist specializing in the Balkans and author of the new book “McMafia: A Journey Through the Global Criminal Underworld,” the smuggling operation was a prime example of what he calls the “internationalization of organized crime,” a phenomenon that has flourished over the past two decades. Estimates suggest that crime accounts for almost one-fifth of the planet’s gross domestic product, he reports, and “McMafia” is a sprawling, pell-mell tour of the world’s shadow economies, ranging from Russia to Israel to the Mideast, as well as India, Africa and Latin America. Glenny even makes it to western Canada, a seemingly mellow region that, due to the proliferating industry of marijuana cultivation, “is home to the largest per capita concentration of organized criminal syndicates in the world.”
Of course, there are criminal syndicates and then there are criminal syndicates. The mild-mannered British Columbian pot entrepreneurs (whose livelihood, Glenny makes it clear, ought to be legalized) seem a long way from the white hot centers of international gangland like Russia and Colombia. Alas, not far enough; one of the pot smugglers Glenny interviewed felt compelled to break with his longtime business partners when they opted to make a kilo-for-kilo trade with cocaine dealers in Florida — whose sources were no doubt some pretty scary people.
Nowadays, serious crime, like serious capitalism, requires globalization. Tony Soprano-style protection rackets are old news, and generally stop at national borders. But trading in contraband goods — be it drugs, arms, oil or human beings — inevitably means setting up international relationships and connections. Above all, the big-time criminal needs a way to launder his loot, and there has never been a global climate more obliging for bad men who want to make dirty money look clean.
The reasons for this outrageous blossoming of so many flowers of evil are, according to Glenny, essentially twofold. “The collapse of … the Soviet Union is the single most important event prompting the exponential growth of organized crime around the world in the past two decades,” he writes. A key event in that breakdown was the bizarrely selective deregulation of the Soviet economy. The officials under Boris Yeltsin who executed this “reform,” for reasons not entirely clear, liberalized the prices of everything but Russia’s natural resources: oil, gas, diamonds and metals. Those lucky enough to get ahold of these commodities at the artificially low, state-mandated prices could turn around and sell them at market rate to the rest of the world. The result was the overnight creation of a generation of Russian oligarchs and “quite simply the grandest larceny in history.”
Vast amounts of wealth drained out of Russia and into the pockets of these enterprising, if dodgy businessmen, who in turn deposited the money outside the country in “the biggest single flight of capital the world has ever seen.” Meanwhile, the government in Russia was disintegrating, increasingly unable to provide basic services like security, let alone administer the commercial rule of law required by any market economy. So, you’re a fabulously wealthy oligarch in an ever-more-Hobbesian Moscow: What do you need? Muscle, obviously, and this is where the notorious mafiya, populated by ex-cops and ex-soldiers with nothing constructive to do, became an essential part of the scene. “The police and even the KGB were clueless as to how one might enforce contract law,” Glenny explains. “The protection rackets and mafiosi were not — their central role in the new Russian economy was to ensure that contracts entered into were honored.” Or else.
Glenny points out that the Russian mob was not merely a parasite on an otherwise healthy economy, the way the American mafia has been. The mafiya, he insists, was essential to the transition from socialism to capitalism, given that Russia’s Western advisors seemed determined to turn the nation into “a giant petri dish of Chicago-school market economics.” At the same time that the USSR was imploding, the holy doctrine of the free market and minimal government had been enshrined by Ronald Reagan, Margaret Thatcher and their disciples. The West embraced the rampant deregulation of international finance markets — that was the other force behind the rise of global organized crime.
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