Deep Currents

It’s not just the sovereign wealth funds who are neatly positioned to turn the financial crisis to their advantage: an Italian business association reports that the Sicilian mob has not been affected so far and stands ready to expand its hold on the Italian economy:

The mafia’s “huge financial resources allow it to carve out new chunks of the market, to profit from the lack of liquidity, to acquire real estate and businesses,” the report said.

The main revenue sources for the mafia are drug trafficking (59 billion euros), racketeering (9 billion euros) and usury (12.6 billion euros). These are followed by arms trafficking (5,8 billion euros), contraband (1.2 billion euros) and prostitution (six million euros).

(As for where they got those numbers… I don’t recommend looking too deeply into the matter.)

Italy is doubtless not the only place in the world where criminal enterprises will find themselves in a far superior position to legitimate businesses thanks to their exclusion from using legitimate banks. It’s not hard to imagine how delicious an opportunity this must present to them. What will be the likely effect? A wave of criminal investment in the legitimate economy wherever the law is weak enough to allow it, further muddying the waters between licit and illicit enterprise. What could be done about it? Almost nothing.

Written: November 12th, 2008