Global Organized Crime James H Mittelman Excerpted from

Global Organized Crime James H. Mittelman (Excerpted from Mittelman, “Global Organized Crime, ” in The Globalization Syndrome, Princeton, 2000) 1

Global Organized Crime a transnational enterprise involving multiple persons organized on a hierarchical basis for the purpose of securing profit and power by engaging in illegal activities TNCO: transnational criminal organization 2

The New Criminality Globalization presents opportunities for new forms of illegality that crop up between established codes of international law, challenge existing norms, infiltrate licit (lawful) businesses and extend into international finance n e. g. , computer crimes, money laundering, stealing nuclear materials and “sophisticated fraud” 3

Sophisticated Fraud fraud: intentional deception to gain an advantage or cause harm to another sophisticated fraud relies on technological complexity among several parties using counterfeit bank statements, credit cards, letters of credit, computer intrusion, and ingenuity of design n e. g. , stock market “pump & dump” scams and pyramid schemes 4

The “Great Transformation” comes to the Global South Polanyi’s “double movement” (transformation & countermovement) n Rapid marketization social dislocation rural resentment & peasant uprisings - perhaps an early stage of an backlash/countermovement? 5

Poverty trap of declining incomes in countryside and limited legal opportunities in cities leads people to seek emigration “services” “When poverty is severe, criminal gangs flourish” (236) Smuggling groups exploit the impoverished Smuggling operations depend on powerful and wealthy criminals who have the resources to corrupt state officials Corruption of political authorities is the crucible in which customs officers, police and tax inspectors assist in crime or look other way n Case in all kinds of smuggling/dealing in contraband 6

Causes of rise in transnational criminal organizations (TNCOs) Technological innovations allowing for increased mobility of people – some carrying contraband – and flow of illicit goods n n esp air travel, telecommunications, use of computers in business contraband: goods whose importation or exportation or possession is prohibited by law Technological innovations that facilitate cross-border operations n e. g. , satellite technology, fiber optic cable, and the miniaturization of computers Hypercompetition Deregulation, by lowering state barriers to free flows of capital, goods, services, and labor 7

Like TNCs, TNCOs operate above and below the state Above the state, they capitalize on globalizing tendencies of permeable borders and deregulation Below/beside the state, they offer incentives to those marginalized by globalization, esp. the impoverished substratum 8

Is such crime a kind of resistance to neoliberal globalization? The marginalized represent the labor supply in the form of social forces participating in parallel economy of organized (and unorganized) crime and impairing the licit channels of neoliberalism n The supply side, then, may be regarded as a disguised form of resistance to dominant mode of globalization 9

TNCOs – economic or political? Profit comes not merely from theft but from emulating market mechanisms Whereas GOC groups have ostensibly economic objectives, to extent that they undermine the main actors in the globalization process – TNCs and dominant states – then TNCOs are both a political component of, and a response to, globalization 10

TNCOs are similar to legit TNCs Embrace logic of market, flexible, hierarchical, e. g. , triads n triads: Chinese criminal networks based in Hong Kong, Macau, mainland China, and also in countries with significant Chinese populations, such as Malaysia, Singapore, Taiwan, U. S. and Canada Hong Kong triads provide leadership, while commercial tongs (merchants’ guilds), many based in Chinatowns, act as local subsidiaries, whose activities are facilitated by guanxi (connections) in Eastern Asia 11

Global cities, more than states, are the main loci of TNCOs Offer agglomerations of financial services Sources of technological innovation, advanced communications and transportation systems Given vast scope of internet, cybergangs can assault a global city from anywhere and remain anonymous Diversity allows TNCOs to blend into legit institutions in ethnic neighborhoods of diaspora n Many such neighborhoods have weak ties to and are distrustful of the police, hampering law enforcement 12

GL of organized crime threatens state authority The state, according to Weber’s influential conceptualization, exercises monopoly over the legitimate use of force within a territory n GL of organized crime weakens basis of government and constrains its capacity While transnational & subnational criminal groups do not seek to take over state apparatus, they contest the rationale of the state, esp in terms of its legitimate control of violence and maintenance of justice 13

Growing connections between the state and organized crime give rise to more state-sanctioned violence TNCOs involved in arms trade Political insurgents rely on TNCOs Privatization of security puts the activities of contracted military personnel “outside the law, ” into a kind of legal grey zone 14

New forms of criminality undermine state sovereignty, the inter-state system Paradox: heavily laden with trappings of force, state is weakened but not powerless Traditional notion of jurisdiction based on territoriality is progressively brought into question 15

TNCOs are alternative social organizations that, in some ways, challenge authority of state to impose law offering commerce & banking in black and gray markets that operate outside regulatory framework of state buying, selling, and distributing contraband swift dispute resolution & debt collection outside the courts creating & maintaining cartels when state laws proscribe them arranging security for protection of businesses, and sheltering them from competitors, the state, and rival criminals 16

“War Making and State Making as Organized Crime” (Tilly, 1985) “If protection rackets represent organized crime at its smoothest, then war making and state making – quintessential protection rackets with the advantage of legitimacy - qualify as our largest examples of organized crime” 17