Observation: we refer, in particular, to the organized crime in the Western countries with the most significant drug markets (the US and UK markets).
The main argument that Western states are still organizing drug trafficking is the lack of a large wealth of organized crime.
In order to control a company, one needs to hold approximately 50% of the shares. In a larger context, in order to control/dominate an economy, one must hold approximately 50% of the companies. In theory, with only approximately 25% of company assets, one can control/dominate an economy. A quarter of the market capitalization of all the world’s companies equals to 19,706 billion dollars.[1] With the profits of the last 30 years alone (30,000 billion dollars),[2] organized crime would be able to control the global economy.
It is to be expected that illegal profits are invested in legal businesses because these provide the highest profitability (after illegal businesses) and because, in general, politicians are financed based on donations from companies or rich people/company owners. By controlling an economy, one controls political power. By controlling political power, justice is controlled. Hence, organized crime has every interest in controlling the legal economy, in order to avoid standing trial. In the end, we have a choice between considering that all illegal profits are held by the organized crime, in which case the organized crime controls the economy, the political power, the state, and the states obtaining most of the illegal profits, in which case the state controls the organized crime. Bottom line, it is either the organized crime controlling the states, or the states controlling the organized crime.
The second argument is the lack of billionaires from illegal activities.
Because most individuals who conduct illegal activities remain relatively poor and because all human activities are concentrated, there should be billionaires from illegal activities. Depending on how illegal profits are distributed, there should be hundreds, if individuals were very rich, or thousands, if profits were distributed relatively uniformly.
List of richest drug lords of all time:[3]
12. Al Capone: $1.47 Billion
11. Griselda Blanco: $2.26 Billion
10. El Chapo: $3 Billion
9. Carlos Lehder: $3.05 Billion
8. The Orejuela Bros: $3.39 Billion
6. (tied) Jose Gonzalo Rodriguez Gacha: $5.65 Billion
6. (tied) Khun Sa: $5.65 Billion
5. The Ochoa Brothers: $6.78 Billion
4. Dawood Ibrahim Kaskar: $7.57 Billion
3. Semion Mogilevich: ~$10 Billion
2. Amado Carrillo Fuentes: ~$28.26 Billion
1. Pablo Escobar: ~$33.91 Billion
Observations:
1. The number of billionaires is around 20, out of the hundreds/thousands that there should be.
2. The amount of very big illegal fortunes is about $111 billion. Out of illegal profits only from drug trafficking, this accounts for less than 1%.
3. The average illicit wealth is under $10 billion, and there should have been, in the last 30 years, approximately 3,000 billionaires (30,000/10).
4. Knowing precisely the size of the profits obtained by organized crime does not influence the validity of this theory. We can consider that the average annual profits are 10 times less, at only 100 billion, which means that organized crime would obtain 3,000 billion dollars over a period of 30 years. This is a sufficient amount to produce billionaires in our days and hundreds of billionaires over time.
From a historical point of view
Drug trafficking is ceased, a military intervention takes place, drug trafficking is resumed. This sequence of events has happened twice in our history. When the same sequence of events happens for the third time, we cannot call it a coincidence, it is a pattern.
"To defeat the Taliban in the aftermath of 9/11, the CIA successfully mobilized former warlords long active in the heroin trade to seize towns and cities across eastern Afghanistan. In other words, the Agency and its local allies created ideal conditions for reversing the Taliban's opium ban and reviving the drug traffic. Only weeks after the collapse of the Taliban, officials were reporting an outburst of poppy planting in the heroin-heartlands of Helmand and Nangarhar."[4]
We cannot believe that the CIA is naïve and could not foresee that, by mobilizing drug traffickers, heroine traffic would be resumed.
"Since opium farmers needed credit and reliable markets for each new crop, any expansion of drug production had three requisites - finance, logistics, and, above all, protection."[5]
Because the most important requirement is protection, the first option in controlling drug trafficking falls upon the strongest state, with the strongest army. In the past, when the British Empire had the strongest army, it was the largest beneficiary of all revenues from drug trafficking.
The richest (highest prices) and biggest drug market is America, the place where the biggest profits are being made. From a theoretical point of view, because the USA has the strongest army and because that is the place where most profits are being made, we can predict that the USA is organizing the drug trafficking. Reality confirms this: through the military intervention in Afghanistan, America is the one which led to the resumption of drug trafficking.
"In my estimation, though, we-including [German] society as a whole-are coming to the general understanding that, given this [strong] focus and corresponding dependency on exports, a country of our size needs to be aware that where called for or in an emergency, military deployment, too, is necessary if we are to protect our interests such as ensuring free trade routes or preventing regional instabilities which are also certain to negatively impact our ability to safeguard trade, jobs and income. All of this should be discussed and I think the path we are on is not so bad."
-Horst Köhler, Interview with Deutschlandradio, 22 May 2010 [6]
For this statement, the German president resigned. Because German troops were deployed in Afghanistan [7] and because the main export product of Afghanistan were drugs, we can deduct that "ensuring free trade routes" actually means resumption of drug trafficking.
From an economic point of view
If we try to explain the lack of billionaires from illicit activity through the existence of several small-sized criminal groups, then we cannot explain why drug prices, on the Western market, remain up for decades. In the capitalist system, competition makes that, in the long term, the price of products is not much higher than the cost of production. High prices indicate the existence of a monopoly. All industries evolve towards oligopoly and then monopoly. In the monopoly state, there is no competition, and the reason why we do not have monopolies in the world is that they are prevented by law (or they are accepted, but carefully monitored). The activities of the organized crime being illegal, there is no legislation to prevent national monopolies. Apparently, the organized crime managed to find a solution to the problem of the capitalist system, that of monopolies. Another problem of mankind, that of coexisting in peace, was solved by the organized crime, made of many violent individuals. While we have military conflicts almost every year in the law-dominated world, the organized crime has successfully found a solution and coexists in relative peace, as there are no great violent clashes. For these two reasons, organized crime should be carefully studied, because it has found solutions to two problems that were not solved in the world dominated by laws. In the case that the state controls the illegal activities, we can easily explain why drug prices remained high on the long term, because there is a monopoly of the state, and why there are no great conflicts, because there are organizations that respect power (or are subordinated to power) and the biggest power is that of the state.
From history, we know that governments were dependent on the revenues from drug trafficking. This is also valid today for the states. The states are considering all sources of revenues when planning their budgets. When the Pentagon had to finance, without prior planning, the construction of the wall with Mexico, in the amount of 3.6 billion dollars, 127 projects were affected.[8] In 2001, when the Taliban stopped the drug traffic, the Western states lost a source of income of approximately 60 billion dollars.[9] By keeping proportions for an amount 16 times higher, there should be 2,000 projects affected. Plus, the Pentagon should recognize that it is being financed from drug trafficking as well. This is because, after ceasing the financing of 2,000 projects, the following question is: why? The projects have been planned, the sources of income secured, while there have been no budgetary amendments. The answer to the why question would lead to the identification of the source of lost revenues: drug trafficking. Thus, we can explain the expediency in resuming drug trafficking in Afghanistan.
If the organized crime obtained profits of thousands of billions of dollars, there should be groups accumulating, in time, say 20-30 billion of dollars. Such wealth has never been confiscated, and DEA annual confiscations [10] do not come close to such amounts.
From the point of view of national security
Even though the international organized crime is considered a threat to national security,[11] the national crime is not publicly recognized as a serious threat to national security.
It is hard to believe that, by using mass surveillance means, satellite images, artificial intelligence, facial recognition,[12] the organized crime can hide, to a large extent. Only through the development of the mobile phone, could the organized crime no longer hide. This is because there are 3 options:
- criminals do not use mobile phones, which means they would stand out, because there are not many people who do not have a mobile phone;
- criminals have mobile phones, but switch them off at critical times, so as to hide their location, which means they would stand out, because there are not many people who repeatedly turn their mobile phones on and off;
- criminals have mobile phones and use them constantly, which means that their location is relatively known.
With the development of smartphones with GPS localization, their location is known precisely.[13] [14]
5.5 percent of the global population used drugs in 2017, compared to approximately 20% of inmates.[15] This suggests that the state is involved in drug distribution. It is inconceivable to think that, if the whole world was a huge prison, with strict and regulated controls, drug trafficking could increase four times.
Drug trafficking is fought against by seizing drugs and massively arresting criminals. Both methods are inefficient. Let’s say the drug consumption is 1,000 units, and production is 1,667 units (1,667 - 40% (seized) = 1,000). Seizing 50% of the drug production, leads to increasing the drug production to 2.000 units (2,000 - 50% = 1,000), so that consumption remains constant. Seizing drugs in a share of 40% may seem as a high percentage at first sight, but is inefficient in practice.
Arrest is inefficient because there will always be poor individuals who are willing to sell drugs.
An efficient method would be to confiscate the money gained by organized crime and we even have studies proposing it.
"The global community is failing in efforts to curtail transnational crime. Why? Largely because law enforcement is focused on the materials and manifestations of the crimes rather than on the money the crimes generate.
Take just one aspect of the transnational crimes analyzed in the following pages - drug trafficking - as an example. The United Nations Office of Drugs and Crime estimates that globally 40 percent of cocaine and heroin are interdicted somewhere between production and consumption, but less than one percent of drug money is ever recovered. The United States Drug Enforcement Administration and similar organizations across the globe concentrate heavily on seizing drug products and expend far fewer resources on tracking and blocking drug money. The truth is, drug traffickers can afford to lose not just 40 percent but 60 or 80 percent or even more of their product if they can keep more than 99 percent of the revenues.
The fight against transnational crime needs to be redirected to combatting the money the crimes generate. This means shutting down the global shadow financial system that facilitates the moving and secreting of illicitly generated funds. The good news is, none of this is technically difficult. It is a matter of political will."[16]
Even though there is one simple, logical solution, that is even proposed in studies, the state does not apply it. Moreover, stopping drug trafficking is not difficult, it is only dependent on the political will. In other words, the state is not willing to do so. This can be easily explained if the state is the main beneficiary of the illegal profits.
Notes:
1. The total market capitalization of all publicly traded companies in 2019 was US$78,825,583 million.
https://en.wikipedia.org/wiki/Market_capitalization
https://data.worldbank.org/indicator/CM.MKT.LCAP.CD?end=2020&most_recent_value_desc=true&start=1975
2. The Dark Wealth https://thedarkstates.blogspot.com/p/the-dark-wealth.html
3. https://finance.yahoo.com/news/el-chapo-12-richest-drug-214253459.html
4. https://www.tomdispatch.com/blog/175225/alfred_mccoy_afghanista_as_a_drug_war
5. The Politics of Heroin CIA Complicity in the Global Drug Trade Alfred W. McCoy
6. https://en.wikipedia.org/wiki/Horst_K%C3%B6hler
7. On 24 October 2003, the German Bundestag voted to send German troops to the region of Kunduz.
https://en.wikipedia.org/wiki/International_Security_Assistance_Force
8. The US defence secretary has agreed to free up $3.6 billion (£2.97 billion) from the Pentagon budget for the Mexico border wall by effectively defunding 127 military construction projects.
https://www.independent.co.uk/news/world/americas/us-politics/trump-mexico-border-wall-funding-military-pentagon-immigration-mark-esper-a9091061.html
9. Fueled by a booming opium harvest, the Taliban has recently expanded from poppy growing into large-scale heroin production with an estimated 500 labs refining the drug inside Afghanistan -- part of a strategy aimed at capturing a greater share of the $60 billion generated globally by the country’s drug exports.
https://www.tomdispatch.com/post/176350/tomgram%3A_alfred_w._mccoy%2C_washington%27s_drug_of_choice_in_the_war_on_terror/
10. In 2005, the DEA seized a reported $1.4 billion in drug trade related assets and $477 million worth of drugs.
https://en.wikipedia.org/wiki/Drug_Enforcement_Administration
11. The U.S. Drug Enforcement Administration's 2017 National Drug Threat Assessment classified Mexican transnational criminal organizations (TCOs) as the "greatest criminal drug threat to the United States,"
https://en.wikipedia.org/wiki/Organized_crime
13. Coronavirus: Israeli spyware firm pitches to be Covid-19 saviour
Each person known to be infected with Covid-19 could then be tracked, with the people they had met and the places they had visited, even before showing symptoms, plotted on a map.
Zooming in, individual phones of people with the infection were mapped, and represented by an anonymised ID number. Details were also shown of other phones they had encountered and the relevant times and locations.
https://www.bbc.com/news/health-52134452
15. In 2017, an estimated 271 million people, or 5.5 per cent of the global population aged 15-64, had used drugs in the previous year.
About one in three people held in prisons worldwide is estimated to have used drugs at least once while incarcerated. One in five report current (past month) drug use.
World Drug Report 2019
https://wdr.unodc.org/wdr2019/prelaunch/WDR19_Booklet_1_EXECUTIVE_SUMMARY.pdf p7, p21
16. http://www.gfintegrity.org/wp-content/uploads/2017/03/Transnational_Crime-final.pdf
https://en.wikipedia.org/wiki/Market_capitalization
https://data.worldbank.org/indicator/CM.MKT.LCAP.CD?end=2020&most_recent_value_desc=true&start=1975
2. The Dark Wealth https://thedarkstates.blogspot.com/p/the-dark-wealth.html
3. https://finance.yahoo.com/news/el-chapo-12-richest-drug-214253459.html
4. https://www.tomdispatch.com/blog/175225/alfred_mccoy_afghanista_as_a_drug_war
5. The Politics of Heroin CIA Complicity in the Global Drug Trade Alfred W. McCoy
6. https://en.wikipedia.org/wiki/Horst_K%C3%B6hler
7. On 24 October 2003, the German Bundestag voted to send German troops to the region of Kunduz.
https://en.wikipedia.org/wiki/International_Security_Assistance_Force
8. The US defence secretary has agreed to free up $3.6 billion (£2.97 billion) from the Pentagon budget for the Mexico border wall by effectively defunding 127 military construction projects.
https://www.independent.co.uk/news/world/americas/us-politics/trump-mexico-border-wall-funding-military-pentagon-immigration-mark-esper-a9091061.html
9. Fueled by a booming opium harvest, the Taliban has recently expanded from poppy growing into large-scale heroin production with an estimated 500 labs refining the drug inside Afghanistan -- part of a strategy aimed at capturing a greater share of the $60 billion generated globally by the country’s drug exports.
https://www.tomdispatch.com/post/176350/tomgram%3A_alfred_w._mccoy%2C_washington%27s_drug_of_choice_in_the_war_on_terror/
10. In 2005, the DEA seized a reported $1.4 billion in drug trade related assets and $477 million worth of drugs.
https://en.wikipedia.org/wiki/Drug_Enforcement_Administration
11. The U.S. Drug Enforcement Administration's 2017 National Drug Threat Assessment classified Mexican transnational criminal organizations (TCOs) as the "greatest criminal drug threat to the United States,"
https://en.wikipedia.org/wiki/Organized_crime
13. Coronavirus: Israeli spyware firm pitches to be Covid-19 saviour
Each person known to be infected with Covid-19 could then be tracked, with the people they had met and the places they had visited, even before showing symptoms, plotted on a map.
Zooming in, individual phones of people with the infection were mapped, and represented by an anonymised ID number. Details were also shown of other phones they had encountered and the relevant times and locations.
https://www.bbc.com/news/health-52134452
15. In 2017, an estimated 271 million people, or 5.5 per cent of the global population aged 15-64, had used drugs in the previous year.
About one in three people held in prisons worldwide is estimated to have used drugs at least once while incarcerated. One in five report current (past month) drug use.
World Drug Report 2019
https://wdr.unodc.org/wdr2019/prelaunch/WDR19_Booklet_1_EXECUTIVE_SUMMARY.pdf p7, p21
16. http://www.gfintegrity.org/wp-content/uploads/2017/03/Transnational_Crime-final.pdf
