Paper published in:

Journal of Financial Regulation and Compliance, Volume 4 Number 1, 1996.

Copyright I.O.Angell, 1996.

Economic Crime: Beyond Good and Evil
Ian.O. Angell

LSE Centre for Computer Security

ABSTRACT

This polemical essay is an extended and more coherent version (what he would like to have said, rather than what he actually said) of the intervention made by the author at the 13th International Symposium on Economic Crime, held at the Guildhall, Cambridge, England on September 13th 1995. It is his reaction against the moralizing sentimentality of the Western law officers (police, lawyers and tax collectors) he saw speaking at the symposium.

Why is it that law officers who speak at conferences on organized crime always don the mantle of Eliot Ness? Why is it that their presentations inevitably end up as morality tales? Why do they picture themselves amongst the `the Untouchables', as Saint George against the Dragon, as Reason against Insanity, as Order against Chaos, as Right against Wrong, as Good against Evil? These pious commentators fail to see that their situation is actually "Beyond Good and Evil". For they are not saints on the side of the angels; and many of the `criminals' they castigate are neither insane nor evil. Those `criminals' simply hold a different, and to middle class eyes, a barbaric set of social values. They are a throw-back to more vigorous and brutal primaeval times - which is what really terrifies modern Western sensibilities. Perhaps many criminals are sociopathic rather than psychopathic? Perhaps in our terror we are mixing up cause and effect? For is sociopathic behaviour criminal, or does crime merely provide an outlet for sociopaths? And just what is `crime' anyway?

How can self-righteous law officers be so certain of their simplistic definitions of `crime', and of their classification and demonization of criminals, particularly in respect of economic crime? As media copy meant for popular consumption such moral posing may have a practical purpose, particularly when begging extra resources from government paymasters. But in conferences such as today's, if delegates seriously want to come to grips with your predicament then you must not let yourselves be deluded by your own propaganda. As practitioners, you are working in a world of social and not moral values. Naive morality, in which a crime is a crime is a crime, has no place in the pragmatic policing of complex societies. You should not forget that, to many, law enforcement is seen as ideological thuggery aimed at protecting the privileged in the status quo; just an intellectual imperialism of the liberal `enlightenment' tradition, so beloved of the North American and northern European bourgeoisie. Western law enforcement then is a thinly disguised attempt to force the rituals of judaeo-christian ethics onto the rest of the world and thereby to turn every citizen into the ideal, docile and domesticated herd animal, in a heaven on earth where "the lion shall lie down with the lamb".

The fact is that the overwhelming majority of human herd, including most Americans and Europeans, would disagree totally with this smug self-assured morality. For most people, the nation state is itself as much a criminal organization as the Mafia - and I'm not just talking about banana republics and `Mack the Knife' totalitarian regimes. The reaction to the Oklahoma bombing and the Branch Davidian incident in Waco, Texas are evidence that a substantial number of US citizens see Washington's political class as conspirators, and that they think of government as the enemy. To these citizens, the fact that they elect their slave masters makes their democracy slavery nonetheless.

Citizens everywhere, from all social strata, are losing their faith in the integrity of the nation-state. They see a degenerate political class in an unseemly rush to satisfy vested interests at a time when the state itself is becoming increasingly powerless. For the state is failing to deliver its side of the Faustian pact, where the individual submits to the legitimate violence of the state in return for protection and security.

From their side of this unholy bargain the leaders of the nation state demand ownership of its citizens, body and soul. What is it but slavery when citizens are disposable: witness the behaviour of British ministers in the 1993 Matrix Churchill scandal to see how little they value individual freedoms compared to their own interests - or as they say, national interests. What is it but slavery, when leaders insist on the right to force young men into military uniforms and demand that they kill for the good of the state. Over the past two hundred years states have killed tens, if not hundreds of millions of people - in comparison, the number of killings perpetrated by state-classified `criminals' pales into insignificance. Furthermore, what sort of perverted morality helps create an illegal and hence highly profitable market in drugs by banning them, and then chases the killers involved in the drug crime it created, while it scorns the far greater number of deaths resulting from the legal alcohol and tobacco rackets - rackets, that incidently, swell the tax-pockets of the state?

The state also insists that there is no such thing as `private property'. Governments are `control freaks'. The state must combat organized economic crime because every state must maintain that it, and only it, can steal from the citizen, whenever it wishes - they call it taxation. For taxation is just state-controlled extortion - obtaining money with menaces. All taxation is theft - and even the Mafia doesn't charge 60% for its protection rackets. There is a very thin line between legitimizing and criminalizing the acquisition of wealth. It is only societal ritual, not right, that distinguishes between the two sides. When the anarchist Pierre-Joseph Proudhon announced that "property is theft", he was calling for revolution against the state and the bourgeoisie. But since the time of Pericles an extension of this motto, `all individual property is theft from the state', has been used to justify larceny by the state, any state, no matter what its political colour. The reason that the US government classifies `strong cryptography' algorithms as munitions is so that they can ban their export, not as they claim, in order to combat crime, but to combat the notion of privacy of the individual.

States are ruthless in their harrying of individual privacy. Every prisoner serving a jail sentence for economic crimes is in reality a political prisoner - each sentence is merely an assertion of state power. For all economic crime is an attack against the expression of state power. Financial losses to business from economic crimes such as fraud are in reality a tiny fraction of those from state-inspired theft. In the past businesses themselves were unwilling partners in this state conspiracy, but now, as telecommunication technology has made businesses more international, as money is no longer the monopoly of the state, and as loyalty to the state becomes irrelevant, businessmen can now see a way out. But governments will not give up that easily, and will set out to criminalize perfectly legitimate trade under the expanding label of economic crime in order to keep control. We can see this in American extra-territoriality, such as embargoes, sanctions and attempts to bully small sovereign states like Switzerland and Grand Cayman into disclosing information about private off-shore bank accounts.

Like most citizens, international businesses too are now coming to see each nation state as just another organized crime syndicate, but one involved in legitimate as opposed to illegitimate crime. This legitimacy does not stem from any unassailable moral position as the state would claim, but from unadulterated raw power: the domination of the individual by the collective. Naturally the nation state professes a superior morality nonetheless. It is this morality of the status quo that deludes `incorruptible' policemen and tax collectors as to the rightness of their legitimate brutality against the individual citizen.

The fact is that, to maintain its power, the state cannot allow its citizens to be free. Citizens are there for the good of the state (sorry, "for the good of the people"). `The good citizen' is lauded, but not rewarded. No matter where you go in the world, you can see variations on the theme of the Soviet Union's state art/propaganda, glorifying the honest tractor driver toiling in the fields. To protect the carefully constructed heroic image, the enforcers of state power, preening themselves in a sanctimonious morality, are given the right to invade the privacy of its citizens. These defenders of the faith are mere low ranking officials, gullible adolescents at large, who are taken in by the web of lies spun by their cynical and infinitely corruptible political elite. "There's a sucker born every minute" (Phineas T. Barnum).

What these morality-deluded state-sheepdogs and rottweilers would call bribery and corruption is merely a change of allegiance of the individual citizen - those who have accepted bribes are simply putting money and self-interest before nationalism, and who is to say they are wrong? For their allegiance is merely moving from one power-crazed ideology, the state ideology of nationalism, to another - internationalism, whose passport is hard cash but whose political structures have yet to emerge. It is not surprising that such fighters for individual freedom are designated `criminals' by the state, simply because their actions threaten the state, or rather the privileged position of the leaders of the state. When business was national, businessmen had no choice other than to comply with state institutions, and so their threat to the state was limited. But now that trade has become international, and money has become electronic information and increasingly denationalized, businessmen who are increasingly mobile have a choice. Inevitably state edicts will criminalize those international economic transactions that undermine state power, and will demonize any leader of global business who grows too independent. For the state must be seen to flex its muscles and bring these free spirits back into line, or it will lose credibility. We can expect a vast increase in state propaganda of the James Bond type, a popular fiction spreading the lie that the state is good and global corporations (Spectre) are bad.

Even business transactions that are not `criminal' will be interfered with under the guise of policing `real criminals'. Such is the high profile chasing of money laundering. But is it moral indignation that is chasing this hot money? - or does the state simply want to steal (sorry tax) that money? or does the state worry that a rapidly expanding international `black economy' will ultimately destroy its ability to tax and thereby destroy the concepts of `nation state' and `national currency'?

It is not surprising that nation-states worldwide insist on regulating (interfering with) trade. Businessmen may have been sensible in the past to conspire in such political acts, when politicians were men of honour, when they were a caste with a highly developed sense of pride and a sense of shame. But no longer; now politics is a profession. In today's so-called democratic countries, the only entry qualification onto the greasy pole of politics is a willingness to kiss babies and then to kiss backsides. From such an undignified position it is only a short step to P.J. O'Rourke's analysis: "when buying and selling are regulated, the first to be bought and sold are the regulators". Organized crime knows this - when organized crime wants something done it doesn't talk to politicians, it buys them. Business too has learned the lesson, only they call it lobbying. With degenerate politicians at the helm, the wreck of the nation state is inevitable. `But it could never happen in my country!' Oh no? You should heed the warning of Giuliano Amato, the former Italian prime minister when he said, "corruption is the greatest where it is found out".

And is the moral law officer completely untarnished? Is his vehement rejection of the legalization of narcotics a moral stance? Or is there a `hidden agenda'; perhaps an unstated symbiosis of the legal and illegal sides of the `drugs industry'? After all, decriminalizing drugs means not only that traffickers lose their profits, but also drug enforcement officers lose their jobs.

In much of the world the population at large has been betrayed by its politicians and so it looks to organized crime and warlords for security. The mafia is seen by many as a protector of the masses against the excesses of the state: this was after all the original raison d'etre of the Sicilian Mafia. And what are their `businesses' of drug peddling, extortion, fraud, gambling, prostitution but merely alternative ways of tax collection. The state spreads the lie that organized crime will lead to anarchy and social collapse, but nothing could be further from the truth. Organized crime has if anything a sharper sense of `community' and `citizenship', only one which just happens to be different to today's dominant liberal democratic interpretation of these words. When a Mafia family runs a neighbourhood, little old ladies don't get mugged on the street - their justice, and they do have a sense of justice, is a morality based on honour, tribute and retribution, and this is finding increasing respect and a ready allegiance among those disillusioned by widespread degeneracy in the body politic.

It is easy to blame social degeneracy upon politicians, however, their behaviour is an effect of the decline and fall of the nation-state, rather than its cause. The dominant form of the state since the French Revolution has been the nation-state. The nation-state is a product of Machine Age thinking, the all conquering factory-model of society, both in its methods for production and for waging war. The masses were needed for both the mill and the military. They had to be organized, and there was power to be found in that organization. "The values of the weak prevail[ed] because the strong have taken them over as devices of leadership" (Nietzsche) - but no longer. In the Information Age, quality production not mass production is needed, and that production itself needs far fewer and far better qualified people. Furthermore today's warfare is the warfare of smart weapons.

Consequently the twentieth century, the century of the masses, is over; and a degenerate political system based on manipulating the power of the masses is over too. Those masses, now unemployed, soon to be dispossessed and disenfranchised, will revolt. Already there are nearly a billion unemployed or underemployed people in the world; by the end of the century the Chinese government estimates there will be 200 million vagrants roaming their country alone. In order to hang on to power, political leaders must suppress any unrest amongst their property (sorry, citizens). But they must do this within the rules of state morality, for otherwise they will be found out. In the past their hypocrisy could be hidden behind state control of communication, but with emergence of global telecommunications any brutality will be transmitted around the country, around the world, in seconds. The big political question of the coming decades is how to find a socially acceptable means of dismantling democracy. For government based on universal franchise, is government elected by losers. Even with strong political leadership this will be an extremely difficult task, but the West, with its cast of parliamentary degenerates, hasn't a hope.

With the collapse of the nation-state as a cohesive system just around the corner, organized crime is standing in the shadows as the government in waiting. If we are honest we have to admit that they already run a large number of countries around the world. When organized crime comes to power they invent their own morality, and they will legitimize their freedom to act brutally in the suppression of any civil unrest caused by the changes predicted above. Today's legitimate business will have no difficulty doing deals with these `no-longer criminals'; it may even prove more profitable than dealing with the bloated sleaze-machine bureaucracies of modern democratic government.

From this new-moral base, novel definitions of economic crime will evolve and the present ones will be discredited. Will posterity acclaim Meyer Lansky as the father of the Global Information Economy? Newly empowered `ex-criminal' states will seek to employ policemen, perhaps offering jobs to many of today's force. Will those who accept be guilty of collaboration or corruption? Of course not - history is written by the victors. Many will see it as merely a pragmatic next step on the road from today accepting unofficial payments to the "police widows and orphans fund". And anyway someone has to maintain social stability (sorry `law and order').

So please in these conferences, no more moralising about economic crime. We are not discussing questions of right and wrong at this symposium, but of the relationship of policing to the winners and losers in a power struggle. Forget the Hollywood myth of men in white hats fighting for "truth, justice and the American way". This is not "good guys" against "bad guys", but bad against worse - and it is not at all clear which is which.

Each individual is left to decide between the lesser of two (or more) evils. So please no more sanctimonious, self-righteous `do-gooder' presentations in these conferences. "One is punished for being weak, not for being cruel" (Baudelaire). By denying the lie of morality, all we see before us is the expression of power, and "The Will to Power": everything else is pure sentimentality. The only questions facing you, facing every law enforcement officer in the world, and the ones you should have clear in your minds by discussing them here at this symposium, are `whose side are you on? and why?'

Ian Angell is the Professor of Information Systems at the London School of Economics