Criminality: The Latest Economic Paradigm: Globalization has created its own perversions.

Author:Bailey, Norman A.
 
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The ongoing process of globalization has accelerated during the post-Cold War era, especially in data-driven cyberspace and new communication technologies, remaining deeply embedded in an ever-stronger and more concentrated profit-seeking business context.

For at least a decade, this evolution has featured a striking duality largely ignored by the field of economics. Indeed, in the Zeitgeist of the liberal order, globalization is the key driver of political and social progress for the world as a result of economic growth and development. The prosperity that it generates should serve the objectives of liberty and equality, with respect to the inter-generational social contract. However, the truth is very different.

Since the devastating international financial crisis of 2008, globalization has greatly facilitated the growing infiltration of the legitimate global economy by organized crime and terrorist organizations. The global economy, as it appears today, displays pervasive interrelationships between crime, politics, and business.

However, this crime-based segment of the world economy is studiously ignored by the field of economics. The culture of crime is extensively studied from the psychological, sociological, historical, legal, and political science standpoints and even by anthropologists. In contrast, the significant studies of the criminal economy with its trade and financial flows and its interactions with politics and business can be counted on the fingers of one hand. Since the 1990s, the interdependency of economics and politics has been largely emphasized in the literature but rarely showcasing the common nexus that both fields have with organized crime and terrorism.

We will first try to understand some of the reasons why, despite the factual situation, the criminal culture remains ignored by economists. Then we will argue that it is time for a wake-up call to accept and absorb the fact that the interactions between crime, politics, and business are part and parcel of the mechanisms of contemporary economic activity. Finally, in order to illustrate what we are referring to, we will outline some of the various ways criminal economic activity permeates the European Union.

First, the direction and pace of the evolution of globalization are irreversible. Market-related technologies are deeply rooted in the liberal economic models. However, it is not so well understood that globalization has generated its own perversions. The global criminal economy is now deeply embedded in and often indistinguishable from the licit one. The openness of trade, finance, and communication technologies have generated growth but also social gaps and gross inequalities between people and between countries. Those imbalances are among the sources of increasing opportunities for criminals and terrorists to be ever more integrated into legitimate institutions and businesses. Crime is fueling corruption, hindering development, and undermining governance by empowering the criminals and their paid and/or intimidated collaborators in government and business. However, global organized crime also has unwitting legitimate winners. Illicit manufacturing represents a revenue source for input suppliers. High profit margins attract legitimate investors, producers, and manufacturers into sectors of the economy heavily...

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