Blogging the Bookshelf

Blogging my bookshelf – one book at a time

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“McMafia”, Misha Glenny

August 6th, 2009 · No Comments · China, Crime, Economics

Synopsis: Guns, Drugs and Women – Misha Glenny travels from Eastern Europe to South America, Africa, Israel, India, Dubai, Canada, China and Japan tracing the globalisation of crime since the early 1990s. The globalised economy may well be ‘Flat’, but it also casts one hell of a shadow.

My Take: Misha Glenny is probably the only journalist in the world who could have written a book of this scope about a subject matter so murky. Poly-lingual and with the street smarts that come from years spent reporting on the frontlines and the backchannels of the Balkan Wars  (brilliantly recounted in “The Fall of Yugoslavia”), Glenny has the ability to do first-hand reporting that most journalists would have neither the ability nor the courage to undertake. Glenny uses his unique skill set to follow the smuggling routes for illegal cigarettes, drugs, women and guns, to trace the paper trail of financing and money laundering needed by the illicit economy and to meet the muscle and influence needed to protect these operations. It’s a rollicking tale with some great characters.

However, it’s the bigger picture of Glenny’s story that I found both more interesting and more frustrating. On the interesting side, Glenny spends a lot of time exploring the factors influencing supply and demand for the outputs of international crime. Glenny makes a compelling case for how the high level of demand in the West for commodities like oil, cigarettes, drugs and women combined with the void of institutional authority in Eastern Europe, Africa and South America in the early 1990s to create an explosive, transnational, illicit supply response in the developing world.

As Glenny puts it:

“One group of people.. saw real opportunity in this dazzling mixture of upheaval, hope and uncertainty. These men understood instinctively that rising living standards in the West, increased trade and migration flows, and the greatly reduced ability of many governments to police their countries combined to form a goldmine. They were criminals, organised and disorganised, but they were also good capitalists and entrepreneurs, intent on obeying the laws of supply and demand.”

Through his case studies, Glenny demonstrates the globalised economy’s ability to quickly direct financial and physical resources in response to the opportunities for supra-normal profits created by illicit markets. As Glenny rightly points out, more often than not, it is government policy that creates these extraordinary returns via domestic regulation eg via prohibitions, trade embargos, cross-border barriers, extremely high rates of tax etc. Where either the substance of these regulations differs from on national market to another, incentives are created for the trans-nationalisation of crime. It’s interesting stuff that I haven’t seen too many other people writing about.

The frustrating thing about McMafia though is that Glenny doesn’t frame the book through this insight. Instead, he clouds his thesis with a series of interesting, but only tangentially related stories without any explanation for where it all fits together.  Glenny has aggregated so much reporting about modern trans-national crime that he can’t seem to bare to leave any of it out. The ultimate effect is to leave the reader wondering how it is all connected.

For example, Glenny dedicates a substantial portion of the book to discussing market opportunities created by the mass concession of the state’s monopoly over the use of force throughout Eastern Europe. It’s interesting stuff and Glenny goes into quite some detail on the causes and implications of the privatisation of coercive power in the wake of the collapse of Communism:

“All manner of operatives lost their jobs: secret police, counterintelligence officers, special-forces commandos and border guards, as well as homicide detectives and traffic cops. Their skills included surveillance, smuggling, killing people, establishing networks and blackmail.

The Police and even the KGB were clueless as to how one might enforce contract law. The protection rackets and Mafiosi were not so clueless – their central role in the new Russian economy was to ensure that contracts entered into were honoured. They were the new law-enforcement agencies, and the oligarchs needed their services.

By 1999, there were more than 11,500 registered ‘Private Security Firms’, employing more than 800,000 people. Of these, almost 200,000 had licences to carry arms. The Russian Interior Ministry has estimated that there were at least half as many again that remained unregistered.”

It’s interesting stuff to read about the wrestlers, boxers, weightlifters and spooks that were previously employed by various Communist regimes contracting out their services to the private sector en masse. But Glenny doesn’t contextualise the multiple chapters he dedicates to this collapse in Government within his broader message about the causes of the internationalisation of crime.

Highlight: One of the most fascinating parts of the book (and the source for its title) was how international criminal syndicates were implementing many of the business strategies of their licit counter parts, to wit the following example of branding, licensing and franchising:

“One of the most violent and feared groups to emerge in Moscow and elsewhere was the Chechen mafia. Their mere reputation for being both fearless and gruesome was often sufficient to cow an opponent or persuade a businessman to take them on as his Krysha (literally ‘roof’).

But their members were not drawn exclusively from the Caucasus, let alone from Chechnya: ‘The Chechen mafia (who should not be confused with the guerrillas fighting in the Chechen war) became a brand name, a franchise – McMafia if you life,’ explained Mark Galeotti, who has devoted the last fifteen years to studying the Russian Mob. ‘They would sell the moniker “Chechen” to protection rackets in other towns provided they paid, of course, and provided they all ways carried out their word. If a group claimed a Chechen connection, but didn’t carry out its threats to the letter, it was devaluing the brand. The original Chechens would come after them'”.

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