Tuesday, August 25, 2009

Globalisation and entanglement in the illicit economy

John Robb mentioned an interesting video today by Nils Gilman on the illicit global economy. What struck me is the way moral integrity is compromised by large organisations and global entanglements. It is becoming impossible to live a normal life without at some level or in some way having an interest, even if it is entirely unconscious, in some illicit activity.

If you are a builder, how sure are you that the hardwood tropical timber decking you use isn't from an illegal logging operation? If you are having the house built for you what hope do you have of even knowing about such issues? And what about the consumer goods we all fill our lives with? Mobile phones are crammed with materials some of which come from places which have no reliable rule of law and where who knows who is profiting and who is suffering from the transactions involved in supply.

Our troops are in Afghanistan fighting a difficult and dangerous war with a doubtful outcome. How are the enemy there financed? Apart from the trade in opium there is apparently a huge protection racket operated by the Taliban and others which means that a large proportion of the cost of any project such as bridge or road building is skimmed off as a tax. This takes place at all levels, and starts with money paid to assure safe passage of goods into the country through Pakistan. So our troops are often overseeing the security of projects which are financing their enemies. What can the knowledge of that do to our young people who we've asked to put their lives on the line?

Remember the AWB scandal in Iraq, where it was alleged that huge bribes had been paid in order to secure wheat sales to Saddam Hussien's regime. To quote from Wikipedia,
On 11 July 2006, North American farmers are claiming $1 billion in damages from AWB at Washington DC, alleging the Australian wheat exporter used bribery and other corrupt activities to corner grain markets. The growers are also claiming that AWB used the same techniques to secure grain sales in other markets in Asia and other countries in the Middle East.

But of course this is a game everybody plays. What about Stern Hu and the allegations by the Chinese government that he'd been involved in bribery on behalf of Rio Tinto in order to obtain contracts for sales of minerals to Chinese industry? The whole point is that ordinary bods, wheat farmers, mine workers, administrators and all manner of staff who make up the bulk of the population and who are kind to animals and love their children ultimately give control of their prosperity to a few hard bastards who have to push the sales through. As long as we get the money, don't tell us how it was done!

One of the points Nils Gilman makes in the video mentioned at the beginning of this post is that money from illegal activities often ends up being invested in legitimate businesses, so that now
according to a report from Confesercenti, the second-largest Italian Trade Organization, published on October 22, 2007 in the Corriere della Sera, the Camorra [the Neopolitan Mafia] control the milk and fish industries, the coffee trade, and over 2,500 bakeries in the city. (Wikipedia)
The illicit global economy is huge and by degrees is becoming more powerful and influential. Legitimate business and government are becoming increasingly enmeshed in it and at the same time the moral legitimacy of these two becomes more questionable as they seem to fall more and more into the hands of self-interested cliques. The use of torture by the USA after 911 and the seeming impunity with which constitutional safeguards have been swept aside as "outmoded" in regards to civil liberties is an indicator of an internal change of attitude amongst big players in the US government where power is becoming more naked and there is less care for traditional legalities and restraints.

All this will inevitably add up to a loss of legitimacy in the almost religious sense in which it has underpinned the Western Enlightenment project. It will eat away at the faith of populations in their governments and in the nationalist enthusiasms which have been at the base of much of the power of those governments. What will be left are temporary enthusiasms, such as might be raised by a charismatic leader of the popularist/fascist type, but they will not have the enduring power of a deep "faith in our mission" which has been the case for most of the last century. What will also be left is loyalty to the local strong man, or tribe. If there is no-one there to fill that role then expect them to appear soon!

This may seem a long way away from Australia, but as seen by the AWB and Rio Tinto cases mentioned above, we are only holding that world at arms length for now. Soon it will be on our shores and in our cities and suburbs in an obvious way. What is the real price of our involvement in Afghanistan likely to be? Are we going to coldly throw away young lives on a doomed project or call it like it is? And how are we going to maintain our stupendous level of wealth versus the rest of the world, plus our precious sense of moral purity, when we are going to have to sit at the table with some very unpleasant people who will be demanding their pound of flesh for whatever it is we want?

A globalised world means we all play by the rules which are current. There has always been a sense that governments and corporations talk the morally pure talk but walk another line out of sight of the public. This is going to become more marked, especially when the game becomes not merely zero-sum but less than that on the slide down the other side of Hubbert's Peak. The gloves may well come off everyone when we find ourselves in a world which is controlled by gangsters at every level.

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