Why is there such an economic disparity between North and South Korea? How about Indonesia and China? Poverty is a really big issue and it's causes are many. To chalk it up to just one group or one idea is a little idealistic and lot naive.
So we begin to list off the issues. The big ones cited are lack of proper drinking water, lack of education, inadequate labor laws, rampant spread of disease and war. The one that we don't always think about is the effect of the economic gangster.
Hold the phone there...economic gangster?
If you've read Freakonomics you'll know that being a drug runner for your local gang in a highly contested piece of turf in New York or Chicago is a bad gig. The chance of death is extremely high and unlike some of our more northerly drug dealers the money is horrible. It's not that the drugs are sell low -- they are quiet expensive. These guys are punished for using drugs by the next guy up the ladder, so drug use isn't the reason why your typical corner-standing drug runner is poor. (It should be noted that I've met a few current and former drug dealers in northern Canada over the years. As it turns out the money is fairly good for them up here, but it's hard to buy anything too major with drug money. It takes a daft hand to persuade the bank that 5 grand a month you make in mortgage payments is legit. But I'm not talking about them, I'm about the drug dealer in more competitive environments.)
The reason he or she is poor is because the job pays rather poorly. Just like the actress working on community plays or the guy slinging lumber into the planer mill at the saw mill, the drug runner isn't there for the job they are doing at the time but rather the job they could be doing in a few years when they move up the ladder. The dirty little secret of the ghetto fabulous drug-dealing, blow-snorting, womanizing high life is that it only exists for those who have worked their way up the ladder. These gangs are run just like corporations. They have managers, grunts, and even book keepers.
This shouldn't surprise anyone. There is a reason that corporations keep books and have this structure to them. It's a highly effective way to manage assets and ensure that as much cash as possible flows up the corporate pyramid into the pockets of the fat cats at the top. Gangs don't use this structure to work in the confines of any stockholder or to keep the tax man happy -- they do this quiet simply because it just works.
The object lesson here is Al Capone. Al Capone or "Scarface" lead Chicago's North Side Gang in the 1920's to his own great fortune. Before he did that though, he was a book keeper and was trained in accounting.
So Al Capone is then our object lesson, the example that we point to when we say "economic gangster." An economic gangster quiet simply is someone who gets business and is motivated like many of us by the thought of money and power. What makes them special is that unlike the rest of us they aren't constrained by petty morality. These guys will kill, abduct and otherwise coerce in order to get the job done that need be done. We deal in oil, wheat and silicon; they deal in racketeering, prostitution and drug running.
It is about this dark underbelly of the work, these forces that take what could have been a successful country and turn it awry that the book "Economic Gangsters" is all about.
I've only just begun it, but so far it's a real page turner.