The Global Illicit Economy
A new class of global actors is playing an increasingly important role in globalization: smugglers, warlords, guerrillas, terrorists, gangs, and bandits of all stripes. Since the end of the Cold War, the global illicit economy has consistently grown at twice the rate of the licit global economy. Increasingly, illicit actors will represent not just an economic but a political force. As globalization hollows out traditional nation-states, what will fill the power vacuum in slums and hinterlands will be informal non-state governance structures. These zones will be globally connected, effectively run by local gangs, religious leaders, or quasi-tribal organizations — organizations that will govern without aspiring to statehood.
Malware is one of Nils Gilman’s examples, at about the nine-minute mark.
The seven rules of the illicit global economy (he seems to use “illicit” and “deviant” interchangeably in the talk):
- Perfectly legitimate forms of demand can produce perfectly deviant forms of supply.
- Uneven global regulatory structures create arbitrage opportunities for deviant entrepreneurs.
- Pathways for legitimate globalization are always also pathways for deviant globalization.
- Once a deviant industry professionalizes, crackdowns merely promote innovation.
- States themselves undermine the distinction between legitimate and deviant economics.
- Unchecked, deviant entrepreneurs will overtake the legitimate economy.
- Deviant globalization presents an existential challenge to state legitimacy.