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Economics The new Mafia capitalism

A new, totally unregulated and unscrupulous form of capitalism has emerged, mired in dirty money from drug-dealing, pornography and corruption, writes JOHN GREEN

MISHA GLENNY’S new series McMafia was launched on BBC TV on New Year’s Day. It is an appropriate if depressing opener for the new year. 

It aims to highlight a new stage in the evolution of global capitalism: Mafia capitalism. We are, though, not talking here of a few family Cosa Nostras controlling the underworld, but well-organised crime syndicates, with links to governments and security services, gnawing their way to the core of capitalism.

The recent revelations from WikiLeaks and the Panama and Paradise Papers exposing massive tax evasion by global companies only show the seemingly less grubby aspect of capitalist venality. 

But such massive evasion of tax and the apparent ease with which the super-rich are able to hide away their wealth sends a clear signal to everyone that duplicity and even crime itself can in fact pay. 

If individuals and companies can avoid tax with impunity and vast sums can be laundered so easily, many will ask: why should I remain a law-abiding citizen, working in a nine to five job and paying my full tax bill?

With the collapse of the Soviet Union and the eastern bloc, combined with the voracious Western appetite for drugs and porn, a new, totally unregulated and unscrupulous form of capitalism has emerged. 

With the enormous sums of money generated by drug-dealing, cyber crime and pornography, there was an urgent need not only to hide the ill-gotten gains but to invest them in safe areas. 

This new Mafia’s secretive operations are facilitated by electronic communications and the easy means of shifting large sums of cash rapidly around the world and thus keeping it hidden and unregulated. 

Albanian gangs have been involved in drug-dealing and trafficking young women to work as sex slaves; cyber crime syndicates are now largely based in eastern Europe. 

Albanian organised crime is highly active not only in Europe but in both North and South America and other parts of the world, including the Middle East and Asia. 

According to the US State Department, Albania is the mainstay of organised crime worldwide and one of the main points of drug trafficking, weapons, immigrants and counterfeit goods. 

The British National Crime Agency (NCA) said it was increasingly concerned by what it called the Albanians’ “high-profile influence within UK organised crime.” It has also warned of the threat of cyber crime from former eastern bloc countries.

Under Boris Yeltsin, the old Soviet infrastructures were demolished and the country opened up to robber barons and oligarchs who were able to take control of its wealth. 

As a result we have seen the country descend into lawlessness and the emergence of a Mafia-like governance. Anyone who attempts to expose this situation is dealt with brutally.

A whole number of journalists and environmental activists who have tried to expose widespread corruption and the flouting of environmental regulations by powerful companies and individuals have been physically attacked and, in the worst cases, murdered.

The investigative journalist Anna Politkovskaya was murdered in Moscow in 2006. Alexander Litvinenko, who revealed how corruption in Russia went right to the top and involved the secret services, was murdered in London in 2006, almost certainly by members of the Russian secret services. 

Grigory Pasko, a former Russian naval officer and founding editor of Ecology and Law, an environmental and citizens’ rights magazine, was attacked by unknown assailants in 2016, after he had published information about the secret dumping of nuclear waste in the Sea of Japan. 

Environmental activist Galina Golubova, of EcoDefence and the Movement for the Protection of Childhood, disappeared in Moscow in 2012. 

And most recently, in December 2017, Andrei Rudomakha of the Environmental Watch on the North Caucasus was attacked in the southern city of Krasnodar by three masked men. 

For years he has exposed illegal landfills, the destruction of landscapes and the contamination of waterways in Russia’s south. 
Some investigations have exposed land grabs by local officials who have built mansions in pristine forests and on the coast. 

He ended up in a hospital with multiple injuries, including a fractured skull and broken nose. Rudomakha and several other activists had just returned from the Black Sea, where they were documenting the illegal construction of a luxury mansion. 

These are just a few on a long list of attacks on those who attempt to expose Mafia capitalism. But such activities are not confined to Russia. 

The recent murder of campaigning journalist Daphne Caruana Galizia in Malta demonstrates how widespread intimidation is becoming and how invulnerable such Mafia capitalists and their henchmen now feel. 

Her relentless focus on corruption, cronyism and political malfeasance in Malta had drawn wide attention. 

After her murder, her son said: “My mother was assassinated because she stood between the rule of law and those who sought to violate it, like many strong journalists. But she was also targeted because she was the only person doing so. This is what happens when the institutions of the state are incapacitated: the last person left standing is often a journalist.”

In Latin America the situation is even worse than here in Europe, particularly in Mexico where the country has been in a state of de facto civil war for decades and the rule of law has virtually collapsed. 

In 2012, leaked documents showed that the government believed there had been a total of 25,000 people missing across the country: silent victims of the drug war. 

This year, the tally is close to 33,000. But the truth is that no-one knows how many people are missing in Mexico. Most of these deaths are a result of turf wars between drug gangs, but with the collusion of state security forces. 

The drugs are destined largely for the US. Without that ready market, the gangs would be deprived of their income.
In Colombia, Brazil, Honduras, Brazil and Guatemala campaigning environmentalists and those exposing corruption have also been brutally eradicated. 

In almost all cases, the attackers are not brought to justice, encouraging others to employ the same means to keep their dirty operations secret. 

Around 100,000 people in Latin America are murdered each year as a direct result of drug laws cobbled together in Washington.
Africa is rife with corruption at all levels, compounded by Western capitalism’s willingness to facilitate it. 

The recent exposure of the Israeli billionaire Dan Gertler is just one example. He is the founder and president of the Dan Gertler International Group of companies. 

He has been heavily involved in the exploitation of the diamond and copper reserves of the Democratic Republic of the Congo. 

As of 2015 his fortune was estimated at $1.26 billion by Forbes. His deals are carried out through a whole number of Mossack Fonseca shell companies.

While at the moment this corruption and violence with impunity is largely confined to the areas of the world outside the so-called Western democracies, this new Mafia is increasingly infiltrating the latter.

London’s property market, for instance, has become an ideal place to hide away dubiously obtained cash. 

The worldwide relaxation of financial controls and deregulation has only made the work of the new capitalist Mafia easier — as has the election of a man in the United States who is heavily tainted by corruption and accused of underhand dealing, and who makes clear his contempt for the rule of law. 

The Mafia capitalists are jubilant. Without a restoration of strict financial regulation and control, as well as real national sovereignty over economies, Mafia capitalism will continue to expand.

 

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