Many of the so called Economies in Transition and of
HPICs (Highly Indebted Poor Countries) do resemble
post-nuclear-holocaust ashes. GDPs in most of these
economies either tumbled nominally or in real terms by
more than 60% in the space of less than a decade. The
average monthly salary is the equivalent of the average
daily salary of the German industrial worker. The GDP
per capita - with very few notable exceptions - is around
20% of the EU's average and the average wages are 14%
the EU's average (2000). These are the telltale overt signs
of a comprehensive collapse of the infrastructure and of
the export and internal markets. Mountains of internal
debt, sky high interest rates, cronyism, other forms of
corruption, environmental, urban and rural dilapidation -
characterize these economies.
Into this vacuum - the interregnum between centrally
planned and free market economies - crept crime. In most
of these countries criminals run at least half the economy,
are part of the governing elites (influencing them behind
the scenes through money contributions, outright bribes,
or blackmail) and - through the mechanism of money
laundering - infiltrate slowly the legitimate economy.
What gives crime the edge, the competitive advantage
versus the older, ostensibly more well established elites?
The free market does. When communism collapsed, only
criminals, politicians, managers, and employees of the
security services were positioned to benefit from the
upheaval. Criminals, for instance, are much better
equipped to deal with the onslaught of this new
conceptual beast, the mechanism of the market, than most
other economic players in these tattered economies are.
Criminals, by the very nature of their vocation, were
always private entrepreneurs. They were never state
owned or subjected to any kind of central planning. Thus,
they became the only group in society that was not
corrupted by these un-natural inventions. They invested
their own capital in small to medium size enterprises and
ran them later as any American manager would have
done. To a large extent the criminals, single handedly,
created a private sector in these derelict economies.
Having established a private sector business, devoid of
any involvement of the state, the criminal-entrepreneurs
proceeded to study the market. Through primitive forms
of market research (neighbourhood activists) they were
able to identify the needs of their prospective customers,
to monitor them in real time and to respond with agility to
changes in the patterns of supply and demand. Criminals
are market-animals and they are geared to respond to its
gyrations and vicissitudes. Though they were not likely to
engage in conventional marketing and advertising, they
always stayed attuned to the market's vibrations and
signals. They changed their product mix and their pricing
to fit fluctuations in demand and supply.
Public-domain text, read in full here on John Shaqi.
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