Economic and Organized Crime: Challenges for Criminal Justice

5. Ten Major Complications

5. Ten Major Complications

Once profit-driven crime is viewed more through an economic than a legal lens, and the distinctions brought into sharper relief, difficulties faced by the traditional justice system in coping with it also become clearer. These are both moral and practical.

5.1 Pioneer or Profiteer?

Far from the existence of absolute standards for judging deportment, what constitutes a profit-driven crime depends very much on the historical and political context. Opium trafficking, slave trading and privateering (piracy under a national flag against ships of designated enemies) were, until quite recent times, much more likely to secure for their perpetrator a knighthood than a noose.[18]In Medieval Europe usury (which meant simply lending at interest, regardless of the rate) was more than a crime, it was a sin. Indeed, it is still is in countries where Islamic law prevails. In the old Soviet Union, two of the most serious economic crimes were “exploitation” and “speculation”, hiring labour outside the household and buying with intent to resell at a profit, things that are the essence of a capitalist economy.[19]

Today, prominent in the list of economic crimes are violations of intellectual property laws. The US pushes particularly hard for serious action by host countries to curb piracy of patents, trade marks and industrial designs - apparently forgetting the degree to which its own industrial supremacy was built in the 19th and early 20th centuries on deliberate copying of other countries' technology without accreditation or compensation.

Thus, it is misleading to assume that economic activities currently seen as criminal will always be so regarded. Someone viewed as a profiteering criminal by one set of people at one point in time might be viewed by others, or even by the original set at another point in time, as a pioneering entrepreneur.

While a counter-argument can be made that civil society across the world by now has a fairly common set of standards to judge what constitutes a predatory crime, by no stretch of the imagination can the same be said for market-based and commercial ones. Take for example, one activity, a crime in some jurisdictions and legal in others, that promises to become increasingly important, and increasingly contentious, in the new century.

During the last two decades, the development of immunosuppressive drugs, combined with, on the one side, an affluent and aging population in the North, and, on the other, an increased number of impoverished young people in the South, has led to an international traffic in organs for transplant.[20] In the North, it is strictly forbidden to buy or sell human spare parts, a position endorsed by the World Health Organization. In much of the South, even where the traffic is illegal, the law is rarely enforced.[21] Although various bodily parts are sold - everything from bits of skin to ovaries and sperm - the most controversial involve organs from living donors that do not regenerate, particularly kidneys and corneas. Horror stories abound of hijackings of organs from drugged patients in hospitals, or the kidnapping of people by organ theft rings, but the most important source is actually voluntary. Although there have been some recent efforts to suppress the trade, to this day in India organ brokers tour the slums to find people willing to sell vital parts to rich patients jetting in from the Gulf states, Europe or North America to private hospitals. A similar traffic exists in parts of North Africa, South East Asia and South America.[22] There was even in Germany an entrepreneurial individual who set up an international kidney exchange; and there have been proposals for the traffic to be legalized even to the point of creating a futures market - people would be able to sell their organs now for delivery on their death to hospitals specializing in transplant surgery. [23]

5.2 So What's Wrong?

Clearly once beyond the realm of predatory crimes involving involuntary redistribution of existing wealth, rights and wrongs become fuzzy. With market-based offences that position is rendered especially awkward by the apparently willing participation of so many members of legitimate society, and by the fact that so much police activity involves interfering in decisions about personal moral choices.

This, in fact, can be gauged from the internal logic of the offences. With a predatory crime, both the act and the method are illegal, and the public has a clear understanding of the nature of the offence and the harm done. With market-based crimes, the act is illegal, though whether it should be is subject to contention, while the method is not, making the morality doubly debatable. With commercial crimes, while fraud is always deplored in principle, it is often hard to define in practice. The goods and services being transacted are inherently legal. And there is the additional complication that often the general public, not to mention juries and perhaps some law enforcement officers and judges, do not understand just what the offence really is.[24]

Moreover, with a predatory offence, the victim takes the initiative in counteraction and the victim, along with most other citizens, can be expected to cooperate fully with the police. In a market-based offence, the police take the initiative, and the public response might be indifferent or even hostile. There is an expectation that each and every predatory offence will be investigated. In market-based crimes, since those who buy are really as guilty as those who sell, there are so many “guilty” parties that the police are necessarily selective about whom to target. Police actions may catch only the most visible and vulnerable who are also the most easily replaced component of the trafficking networks, leaving the illicit market operating largely unscathed.

Indeed, there is a sense in which police action is actually counterproductive. With a predatory crime, a police crackdown can be expected to reduce the number of perpetrators and the number of instances of the offence. With a market-based crime, the opposite is true. The response of illegal markets to intensified police action is to increase, not decrease, the number of participants and the number of transactions ­there are more intermediaries, each dealing in smaller amounts of merchandise. Therefore, ironically, what would be taken in predatory offences as a sign of a law enforcement crisis, more offenders and more illegal actions, in market-based offences can be taken as a sign of success. By virtue of confounding and compounding the two, crime data become easy to misinterpret. That can lead to serious mistakes in policy and in resource allocation.

5.3 Whose Business Is It?

Even within North America, the creation of modern market-based offences was scarcely a matter free of controversy. During the 19th century, most governments accepted the sensible notion that personal vice was the business only of the person with the vice, thereby excluding from the criminal code a whole host of offences that would later be incubators of modern “organized” crime.

Then, in the early 20th century, North America was swept by a wave of Puritanism made up of several components: the temperance movement; a resurgence of small-town “decent” values against big-city cosmopolitan decadence; Anglo-Saxon racism (blacks were associated with cocaine, Mexicans and “Hindoos” with cannabis, Orientals with opiates and the Irish with alcohol); and a movement to disenfranchise immigrant voters by closing the saloons which functioned as working men's political clubs.[25]

These political currents were compounded by another. The US Constitution seemed to drastically curtail federal law enforcement powers. Policing serious predatory crime was the preserve of the states. Hence, to assert its presence, the federal authority took the form of regulation, taxation and prohibition of certain goods and services - in effect, the very creation of the category of market-based crime. Recreational drugs, prostitution, gambling and even alcohol were criminalized and federalized. Canada and much of the Western world followed the American lead, albeit usually with less intensity.

There were several consequences. One was the extinction of the old red light districts ­henceforth, the business of supplying and demanding personal vice ceased to respect intra-urban frontiers. Indeed, the criminalization of supply meant that criminal entrepreneurs had to deliberately mix with polite society to lower their profile. A second was the creation of a class of wealthy criminals who could use the profits resulting from criminalization of personal vice to penetrate legitimate parts of the economy. A third was the emergence of the view that “organized crime” in the vice trade was the result of an alien conspiracy, a view that continues to misinform debate to this day.


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