Of
many interesting articles this week the one that caught my attention the most
was about how to hide 400 million dollars. Written almost as if it were a
mystery story, it tracks how an estranged husband sought to salt money away in
international banks such that his wife would have no access in a divorce. As
described in the article, the husband and the wife are not the kind of people
with whom I would want to spend my time. They made money in fraudulent schemes,
many of them played out on the internet. But liking or not liking them was not
the intriguing point. It was the
revelation within the story that shell companies and trusts designed to hide
money — much of it either generated illegally or being held to avoid legalities
— hold a purported 21 TRILLION of the world’s financial wealth. 21 TRILLION
USD.
That
is a staggering amount of money hidden
away for purposes of keeping one step ahead of tax bills, blinkered business
partners, or an estranged spouse. This sum undoubtedly includes money acquired
through criminal activity. That is also
an enormous percentage of the world’s wealth to be sequestered away from the
active markets. In Adam Smith’s view of the world, that money would otherwise
be available to generate new wealth, to grow economies, to pull scores of
people out of poverty, or to keep existing working and middle classes from
sinking back into want. No wonder many
developed countries in Europe, Asia and the United States have been relatively
stagnant for some time now. No wonder it
is so difficult to penetrate endemic, destructive poverty in Central and South
America, Africa, many parts of Asia and even within the United States and
Canada. Wealth exists, but it is not in
circulation. This article implies that it is sitting still in some remote bank
in the Cook Islands as the result of nefarious activities abetted by legal
tricks.
The
issues surrounding global internet governance parallel these implications.
First, international governance to bring the principles of justice to bear on
either global banking or the internet does not exist. Second, the dark
interstices of this ungoverned territory create a haven for illegality and
fraud. Third, about the only means of penetration into this world is through
intermediaries, for example lawyers and financiers, on-shore banks that assist
in holdings and transmission. Lawyers afraid of losing their license, credit
card companies and legitimate banks that avoid legal action or bad publicity,
accounting firms that make an honest living often act as check points from
perpetrator to ungoverned cash. But to the tune of 21 trillion dollars and the
intractable challenge of cyber insecurity on the internet, intermediaries may
not be good enough to stem the tide of layers and layers of illegality.
Where
neither moral compass nor legal constraint exist, human nature’s darker side
lurks. That dark side lends itself to unchecked violence and dehumanization
that often lies within the illegal processes of generating much of this hidden
wealth. Knowing that you can safely hide ill-begotten money encourages brutal
behaviors played out in drugs and addiction, sexual slavery, extortion, theft
and fraud. Moreover, these activities are not separate from global economics.
From perpetration to prosecution, those activities create enormous
inefficiencies within rational society. They also impose aching burdens on
people who live by the rules.
I
have no pat answers to these problems, but I feel strongly that they are vital
questions. And the relationship between and among crime, global banks and the
internet is more than an interesting insight about parallel tracks. Insofar as
the internet facilitates crime, disorder and debasement, we must include its
properties in our assessment as how to assert justice. The medium, curiously, is also the message.
No comments:
Post a Comment