19 Jan 2016

McMafia -- the review

This extraordinary book by Misha Glenny is like catnip to someone like me -- a lover of black markets, arbitrage and other forms of "living in cracks." Nearly 10 years ago, I went to a summer school on organized crime. There, I learned that mafias exist because the state is too incompetent (or corrupt). I also learned that corruption -- "the abuse of public office for private gain" -- exists en formations grands et petits. In their petit form, corruptions involve police, bureaucrats or irrigation managers taking a payoff to break a law, and so on. In their grand form, corruptions mean diverting state resources to private benefits, e.g., awarding oil concessions or diplomatic recognition. In either case, one can argue that corruption reflects the laissez faire "efficiency" of a market, but there is a much stronger argument for its inherent evil, given the different priorities of collectives over markets when it comes to allocations of human and natural resources. All of this brings me to my point: I enjoy the skill of the mafia even as I deplore the government failure that enables them.

This book offers a tour of mafia activities around the world, across many "business opportunities." Glenny goes from Bulgaria (where he served as a journalist) to ex-Yugoslavia, to Russia and Israel, to Dubai, India, Nigeria and S Africa. He ends by crossing from Canada to S America (perhaps via the US) and going to Japan and China. The book was published in 2008, but it still seems rather fresh, especially when considering the variety of scams, crimes, sins and incompetence on display around the world.

Here are a few sample ideas:
  • "There are two basic types of criminal syndicate: the commodity traders and protection racketeers."
  • The end of the Cold War meant an end of idealistic patrons: rebels thus started to make money with conflict diamonds, oil, etc.
  • Mafia growth in China has built on opportunities opened by Bejing's acceptance of provincial "experimentation"
....and this final paragraph:
It is not globalization in itself that has spurred the spectacular growth of organized crime in recent years, but global markets there either insufficiently regulated, especially in the financial sector, or to closely regulated, as in the labor and agricultural sectors. In the 1990s, we witnessed the beginnings of a global regulatory regime of the financial markets that held out a hope: there was a chance that we might establish a grip both on the partially regulated licit economy and on the entirely unregulated shadow economy. Since the millennium, however, a hostile United States, an incompetent European Union, a cynical Russia and an indifferent Japan have combined with the unstoppable ambition of China and India to usher in a vigorous springtime both for global corporations and transnational organize crime -- p.394
Don't forget the definition I mentioned above: "the abuse of public office for private gain." This exploitation is only possible with the connivance of government officials.

Bottom Line I give this book FIVE STARS for its incredible examples illustrating and explaining how the mafia steps in to exploit citizens when (incompetent or corrupt) government steps out.

1 comment:

Eric said...

Loved that book. I reviewed it a few years ago and put the review on my blog. I also reviewed related books since then.

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