In the United States, as in any other capitalist market across the global market system, narcotics trafficking, and its expansive capitalist dynamics have become determinant engines of local economic development. Since the Corsica mafia operations of the early 1900s, narcotics trafficking’s informal capitalist structures have been instrumental in the expansion of urban development, business development, infrastructure development, and the overall modernization of the capitalist world. Since then, its “illegal” capital has been a key component of the economic development of nations across the world, and today it is the backbone of the globalization of the market.
Today, strategic business sectors such as real estate, financial services, entertainment, hospitality, tourism, health, education, communications, professional sports, and the high-tech industry feed directly and indirectly from this lucrative informal market. The neoliberal world in which we live in today thrives from this illegal business. It would not be the case if it wasn’t because the majority of nations across the world adopted and embraced the principles of free market, deregulation, minimum government intervention, and privatization of public goods. These basic principles of economic development opened the doors to the world of narcotics trafficking, taking advantage of the deregulation of domestic and international policies that incrementally allowed dirty money to freely move between the legal and illegal world. Covered under the privileges of white-collar crime, a façade now exists, that allows the cross pollination between the world of formality and informality.
In the United States, for example, it could result in a devastating blow to local economies across the country that live from the circulation of capital generated by this industry, that ultimately represent engines of employment, economic development, and local tax revenue. It would also impact the value of the US Dollar. I will go on to explore some of these issues:
U.S currency is the “to go” currency not only of international trade but of criminal organizations as well. Ending narcotics trafficking would mean terminating the circulation of dollars that move back and forth across borders and threaten the stability of local and global markets. Moreover, it would represent a threat to all the interconnected, international legal industries and economic sectors that directly or indirectly thrive from the money generated by narcotics trafficking.
We are educated and trained by media and the broader Western propaganda machine (including multilateral institutions) to think that there is clear-cut line between the legal and illegal worlds, when in reality the line has historically been blurry, and much more so in this current second era of globalization that rests of the neoliberal principle of deregulation. Do not forget that we live in an era where shell companies are part of the structures of international business and international trade; a world where, for example, Russian “oligarchs” (a Western construct for Mafiosi) can own English Premier League football clubs, as in the latest case of Chelsea Football Club.
International and local real estate industries, as well as the hospitality industry, the high-end niche consumer markets, and all sectors of the global market system capitalized, continue to capitalize, and will continue to do so as a result of a permissible deregulated global market system. Without narcotics trafficking and its capitalist operational structures, there would be no robust global consumption; without the nouveau riche class resulting from this illegal activity, there would be no success story to spin the miracles of capitalism across the world.
The end of narcotics trafficking would be bad news for numerous manufacturing, production, retail, and service industries around the world. The global chemical companies would feel the punch considering that, for example, cocaine production is heavily dependent on chemical use and so are the industries that produce the herbicides to eradicate the coca plantations in the Andes, as in the case of glyphosate. It would be the end of housing booms across the urban centers of the world, considering that high end real estate transactions became a key strategic method to launder dirty money.
Think of all the economic sectors that are kept alive, artificially, thanks to money laundering schemes. Without that economic activity, the global market system would collapse, and with it the legitimacy and agency of our current world-economic system and division of labor. Ultimately, the coexistence between narcotics trafficking and the formal economy is what keeps the capitalist engine going.
It is the formula that continues to replenish the coffers of bureaucratic structures that were designed to “fight” the War on Drugs, including Interpol and all the national security and drug enforcement agencies across the world, and all the indirect and direct businesses that service, supply, and innovate, through Research and Development, all kinds of intelligence, military, security, and logistical aspects of drug enforcement agencies domestically and internationally.
Eradicating narcotics trafficking is therefore not good for business. It is not good for capitalism to cut the head of white-collar crime across the world. It is not good policy to control those that are in control. For the sake of the global market system, it is imperative to not only maintain the status quo, but to make sure that this one remains under the structures of the US Dollar. It is one of the pillars that sustains the United States in an enviable position of power within the current geopolitical structures. It is one of the engines of capitalist success of western economies, one indispensable piece of the global market system.
 See, for example “Abramovich companies supplied materials for Russian military for decade.” ,i24news, July 21, 2022. Accessed July 22, 2022. https://www.i24news.tv/en/news/ukraine-conflict/1658416091-abramovich-companies-supplied-materials-for-russian-military-for-decade-report
Feature image credit: Christine Roy
Stefano Tijerina teaches in the areas of international business, comparative business, and ethics at the University of Maine’s Maine Business School. Prior to his academic career he worked in the areas of international banking and non-profit management. He received his B.A. in Comparative Politics from Clark University, a Graduate Certificate in International Relations from Universidad de los Andes, and his M.P.A. and Ph.D. in History from the University of Maine. His current research centers on the business dynamics of the Western Hemisphere from a historical perspective, including the dynamics of informal markets.