The financial flows currently evading state control have surpassed the budgets and even the GDPs of some countries, granting this money significant macroeconomic weight and geopolitical ramifications. This evolution now poses a real threat to our democracies, whose functioning, cohesion, and resources are undermined by unprecedented incentives for fraud in history. While criminality seeks money more than power, illicit practices confer impressive power to the actors involved.
The UN reports that the global financial system facilitated the laundering of nearly $1,600 billion in 2009. The European Commission states that “corruption alone costs the European economy €120 billion a year, just shy of the Union’s annual budget.” Although assessing these clandestine realities is inevitably complex, experts unanimously assert that the profits from organized crime and various forms of “illegality” have today become enormous. This transformation of criminal phenomena is reflected in the weakening of state power.
Since these changes only indirectly affect national defense, seeing a military figure discuss such a subject may seem incongruous. However, armed forces are often engaged in crisis situations that could have been avoided had their early signs received more attention. This probably gives them a heightened sensitivity to gradually deteriorating situations. The Mexican example illustrates both the magnitude of these threats and the limitations of deploying armed forces. Indeed, they neither have the vocation nor the means to effectively combat such scourges. Moreover, national defense has long acknowledged the natural pitfalls stemming from our preference for easy enemies, our focus on the most visible threats, and our tendency to perceive dangers as always distant. Yet, the time of blindness is the time of entrenchment.
Furthermore, these phenomena are not merely risks but represent a genuine threat to our states and societies. They constitute a defense issue in the full sense of the term, on par with other non-military threats. This threat, both internal and external, has grown to such an extent that it calls into question our collective ability to defend ourselves. It therefore requires a genuine defense strategy that is not limited to the prerogatives of a specific ministry but involves all of them.
States Challenged Even in Their Sovereignty
Many specialists have been trying for years to alert public opinion to the profoundly criminal nature of recent financial crises. For instance, the Japanese crisis was dubbed the “Yakuza recession” due to the connections between ruling circles and crime syndicates that hindered recovery. “Fraud does not explain everything, but without it, nothing makes sense,” asserts Judge Jean de Maillard.
Moreover, the rise of failed or failing states has attracted transnational criminal flows, making these “Potemkin states” easy prey. The microstates of the Pacific island networks are now under the control of Chinese triads, Cosa Nostra rules the east of Saint Martin, and the Caribbean island world is infested with mafia organizations.
Nevertheless, the UN estimated in 2009 that only 1% of the $1,600 billion laundered globally was apprehended, confirming that the fight against money laundering remains a total and pathetic failure. Such impunity is concerning, as money laundering is perceived as a victimless crime while it results, among other things, from kidnappings, murders, pimping, and various trafficking activities. Given that this money eventually leads to the purchase of vast sectors of the economy, a gradual penetration of markets, phenomena of excess liquidity, corruption, etc.
The Absence of Rules Proves Always Criminalogenic
Following the reduction of state controls, it turns out that new financial circuits now go well beyond merely offering opaque services to criminals. The impunity with which the foreign exchange market, the world’s largest financial market, has been manipulated for years by major banks illustrates the dismay of states faced with new forms of predation. In this great democracy and developed country that is Italy, the combined revenue of the four mafias from the Mezzogiorno reaches 6% of GDP.
Even more concerning: while capitalism has always had its shadow and “illegality,” these practices are now embedded in the very functioning of the economy. In this world of opacity, it’s no longer just a few bad apples; it’s the system itself, the business model (cf. J.-F. Gayraud) that promotes and later tolerates fraud. High-frequency trading, whose economic utility is nonexistent, serves as a glaring example of incentive to “legally cheat.” The fact that BNP Paribas, France’s largest bank, has a presence in several tax havens or that HSBC helped launder billions for drug cartels should harm their reputation. But that’s no longer the case. Tax havens now serve both criminal circuits and legitimate companies and wealthy individuals (cf. C. Chavagneux and R. Palan).
The magnitude of these phenomena and the relative blindness they encounter raise fundamental questions about the functioning of our society: a focus on events, a tendency to evade disturbing issues, difficulty in imposing bans, a preference for euphemism, and a fear of stigmatization. Yet, refusing to name is sometimes akin to abandoning thought. Even if within political and media power systems, some do not wish to acknowledge the extent of fraudulent practices, the general public often struggles to grasp these invisible and complex realities. Many sophisticated crimes lack the immediate material evidence of a homicide.
Overall, the entrenchment of deviant phenomena, the influence of organizations operating on the fringes of legality, and the resulting temptations for decision-makers of all kinds currently undermine our democracies. Regarding combating these issues, the reflections are numerous: adapting legislative frameworks, strengthening institutional capabilities, fighting against the erosion of state prerogatives, multinational cooperation, new technological tools, prevention, education, etc. However, firstly, the contrast between the scale of these realities and the silence that protects them is such that it seems essential to foster real awareness. Before experts express their recommendations, a sufficient portion of public opinion must realize how these phenomena are no longer marginal or mere incidents. Without this prior lucidity, no mobilization, and therefore no meaningful action, can be expected. Thus, for our states, combating this threat represents a question of survival as much as a responsibility towards future generations. For citizens, making it a media and political issue is directly aligned with the spirit of defense.
References
- Jean de Maillard : L’arnaque : la finance au-dessus des lois et des règles ; Gallimard, 2010.
- Jean-François Gayraud : D’une déviance marginale à une délinquance systémique, le nouveau capitalisme criminel ; Odile Jacob, 2014.
- Christian Chavagneux et Ronen Palan : Les paradis fiscaux ; La Découverte, 2012.
