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The Limits of the State: Criminal Networks and the Global Supply Chain

The levels of trust in legitimate corporations may be eroding as more individuals feel let down and abused, although many people want to believe that the supplier of their favourite electronic device is a loveable company that cares for them, but there is another part of the world of globalized business which is clearly criminal, the organizations supplying hard drugs, prostituting children and young people, supplying slave or forced labour, and dealing with the illegal trade in ivory, rare timber, and endangered species.

As I found when writing “The New Pirates”, it is impossible to neatly define the world into those areas controlled by states, and those areas, and parts of the economy controlled by non-state actors. Globalized businesses, which are by their natures amoral, navigate between the official “state” areas of control and the non-state areas. In fact, it makes sense to see “illegal” networks as forms of business, dealing in products and services that are prohibited by most legal systems today. Whereas the East India Company once made fortunes by shipping opium to China (and provoked the two Opium Wars in the mid-19th century) the fortunes in drug dealing are now made by the Mexican drug gangs, who control the shipment of cocaine into the United States, and its distribution from centres like Chicago. In the same way the 17th and 18th centuries The Royal Africa Company transported many tens of thousands of slaves from West Africa to the Americas making large profits for the City of London, today the profits are made by those who transport young girls to Europe to become prostitutes from Eastern Europe and Africa, by offering them jobs as cleaners or waitresses, by those who used forced labour to pick agricultural produce, or man Thai fishing boats.

In between the extremes of the wholly illegal and completely legitimate there are many shades of grey. Legal and illicit businesses also intersect in this grey zone, full of ambiguity. As Bayart, el al, said, “The world system is subject to a simultaneous process of globalization and loss of precise territorial definition, which may not lead to the eclipse of the state as an organ of power, but which is most surely leading to the development of transnational relations between societies. Criminal activities are greatly affected by this evolution, and quite often they thrive in this environment.  Criminal operators, who can on occasion be formidably well organized at a national level and in some cases exercise clear influence at the height of the state.”[1]

Carolyn Nordstrom described the situation well when she wrote, “Trillions of dollars move through the world’s markets illegally, and millions of people work in extra-state activities …. Not only are fortunes made on these profits – empires are built. Empires that are, for various reasons, largely invisible. Illegal transactions are generally embedded in networks that span the globe. The most successful of these networks control finances and resources larger than many of the world’s countries.”[2] Nordstrom argues that what she calls, “extra-state systems”, including the illegal and the illicit, ensure that, “the state is not the ultimate, the supreme, the unchallenged governing authority in the modern world.”[3]

The international corporation therefore navigates its sinuous way between states and the “extra-state”, at times ignoring regulations and laws of states, its activities may be legal in one jurisdiction, but not in others. The corporation is very flexible and will protect its own ends, that is its profits. The international corporation can mine in the Democratic Republic of the Congo (DRC), drill for oil in Equatorial Guinea, deal with the Russian state, and thrive in Angola – all “difficult” environments, which know little of the rule of law. So the corporation can operate on the edge of the illegal, dealing with the criminal, but beyond it some organizations are purely criminal, or illicit. The activities of these networks are interwoven into the complex global supply chains.

© Andrew Palmer, 2016, not to be reproduced

[1] Bayart; Jean François; Eillis, Stephen and Hibou, Béatrice – “The Criminalization of the State in Africa”, James Currey, Oxford and Indiana University Press, Indianapolis, 1999, p.9

[2] Nordstrom, Carolyn – “Invisible Empires”, Social Analysis: The International Journal of Social and Cultural Practice, Volume 48, Issue 1, Spring 2004, pp. 91-96

[3] Nordstrom, Carolyn – “Invisible Empires”, Social Analysis: The International Journal of Social and Cultural Practice, Volume 48, Issue 1, Spring 2004, pp. 91-96

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