As Misha Glenny shows in McMafia, a vividly recounted journey through a dozen of the world’s most potent gangs, cartels and transnational mafias, there is hardly any society or economic subculture that is not affected by global criminal networks. Naturally, criminal markets are not new, but in the late 1980s criminal business activity dramatically flourished with the collapse of communism, the loosening of authoritarian controls across the globe and, not least, the advent of anarchy in parts of Russia and the former eastern bloc. Glenny’s purpose is to describe the rise of this “shadow economy”. He estimates that criminal business now amounts to 20% of global GDP.
The book’s title, though clever, is misleading: The world’s organized criminals are no homogenized franchise in the McDonald’s mould. From place to place and region to region, they take all sorts of shapes and serve all sorts of purposes. In the Ukrainian port of Odessa, a “heroic gangster” named Karabas takes a tithe—literally 10%—from local businesses in exchange for protection from outside criminal enterprises, until he’s gunned down. In Japan, Yakuza syndicates eschew actual violence (“the credible threat of violence” is preferable, Glenny observes) as the mafia pursues its interests in everything from trafficking women to operating as “a de facto legal system” in resolving disputes over such matters as bankruptcy declarations, insurance claims and real estate transactions. In India, gangs merge with sectarian politics—“the gang wars of Bombay that exploded with renewed violence in the 1990s were in part a proxy conflict between the intelligence agencies of India and Pakistan,” Glenny writes.
Nevertheless, common themes emerge. Organized crime usually steps in to replace state failure: It protects businesses and enforces contracts. Many syndicates move on to corner a monopoly in the supply of some illegal or highly taxed product or service. The two most lucrative fields are arms and drugs. Then come diamonds, energy, cigarettes, stolen cars and the trafficking of women. In one particularly harrowing episode, a duped woman from Moldova tells Glenny how a girlfriend called her up to tell her of a dream job abroad. She had no idea that a gun was being held to her friend’s head. After a nightmarish journey that included the murder of a would-be escapee, the woman was forced under the Israeli border fence to work as a slave in the red-light district of Tel Aviv.
Organizations follow patterns, too. Criminal masterminds are rare, although Glenny finds one “merchant of death” in South Africa who buys a whole airport to supply arms to warring militias. Some mafias are based on families, as in Italy, tight-knit but vulnerable to blood feuds. Most are complex, self-perpetuating organisms, nurturing founding myths and forming shifting alliances.
In later stages, some groups internationalize, seeking to launder money in “washing machines” such as the Caribbean island of Aruba or the Persian Gulf emirate of Dubai. Then comes the purchase of political influence. It is sometimes professionally done. Indeed, mafias such as the Colombian cocaine cartels, which can turn a profit of $4-8 billion a year, begin to look like “good capitalists and entrepreneurs”— micromanaging, looking at economies of scale, juggling supply and demand, and wielding MBAs.
Glenny hopes that clearer-headed democracies can turn back the tide, but successes such as the fight against “blood diamonds” are rare: It took government sanctions, a plucky NGO and an international publicity campaign to strangle the market for gems extracted in African war zones and sold to buy guns and supplies.
The Wall Street Journal
Edited excerpts. Hugh Pope is a senior analyst with International Crisis Group. Comment at email@example.com