Societal Implications & the Agenda?

The social consequences of organised crime are far reaching and well documented. If one considers, as discussed before, that the mainstay of organised crime seems to be drugs trafficking then the specific impact on society a result is obvious and destructive. Promoting drugs markets and, ultimately, drugs use can create further crime when drug abusers turn to petty crime, such as small scale burglary, in order to pay for what is an extremely expensive habit. The consequence of organised crime and their drugs markets could be seen as a major threat to society and privacy, because it creates a cycle of crime which involves prostitution, pornography, violence and crime involving private property such as burglary and car theft, to name but a few. So in this sense civil society can be undermined and controlled by organised crime, entrapping people through desperation and coercion.

A further problem is that because of the vast profits made by organised crime they have resources that give them opportunities with which to by-pass and undermine the democratic process. This is particularly the case in Eastern Europe and the transition countries of the CIS. As mentioned before following the 'velvet revolution' of 1989 many of these countries are vulnerable and have been left institutionally weakened, as has civil society. Organised crime, in contrast, has grown in strength and sophistication and has taken advantage of the political and economic weaknesses.

The corruption of officials is an important area in the activities of organised crime because it effectively makes their operations easier, efficient and more fluid without the encumbrance of officialdom. It is the opinion of some experts that Russian organised crime, for instance, spends approximately 30 to 50 per cent of its resources in order to bribe and corrupt officials and politicians at all levels. One of the main areas of interest to Russian and Eastern European organised crime is unquestionably privatisation. The fostering of good relations with local administrators and officials can essentially secure the low cost purchasing of controlling stakes in enterprises of strategic and economic importance. (Leps, 1996, pp.82-7). The apparent increasing involvement of organised crime in, and growing appetite for, politics is a source of great concern for the functioning of the democratic process, particularly in Russia and Eastern Europe, and possibly Western Europe, too. (Leps, 1996).

On an economic level organised crime, because of its illicit and clandestine operations, is not predisposed to declaring its business transactions and profits, 'proceeds of crime', for tax purposes. The amount of revenue that countries are losing from non taxable profits and the laundering of money outside Europe is as difficult to estimate as with any area of organised crime. But if the statistics on the amount of capital being amassed by organised crime is to be believed then the economic costs and lost fiscal revenue for many countries in Europe and Russia must be seen as being immense. It could also be argued that legitimate business is also losing revenue to organised crime through the supplying of counterfeit goods on the black market or the shadow economy. The types of counterfeit goods available range from designer label clothing, perfume, watches etcetera. Seemingly, any desirable consumer product is the subject of counterfeit reproduction and black marketeering.

But there are some schools of thought that point to the fact that organised crime exists because of imperfections within the market mechanism. It is seen as addressing the inadequacies of the market and steps in to provide whatever the existing market does not, creating a price and competition distortion. Within this school of thought the organised criminal is seen as a 'frontier' entrepreneur, attaining almost heroic status, merely taking advantage of the economic and political deficiencies, and that 'crime is rational economic activity carried out by individuals balancing costs and benefits'. (Lotspeich, 1995, p.556). This is also the view that suggests that it is economic changes themselves that have stimulated criminal activity, the 'bad laws criminalise entrepreneurs' viewpoint. This concept is particularly apt if one considers 'white collar' crime and wholesale tax evasion, as discussed above. Lotspeich also suggests that the shadow economy is 'the response of normal populations to repressive regulation of economic activity. The more pervasive is the regulation, the more extensive will be the shadow economy'. (Lotspeich, 1995, p.570). It is ultimately over-centralisation and excess regulation that causes criminal activity, 'in the context of the market economy...crime is organised only or primarily by those who do not have access to legitimate market opportunities'. (Dorn et al, 1998, p.538).

There is also the Chicago School/Friedmanite view that organised crime is merely part of the market mechanism, and that as long as services are being delivered morals and ethics are not important. The free market and laissez-faire principles necessarily involve criminal activity, and enables a certain amount of wealth distribution to take place. As long as the market delivers and functions effectively then all else is irrelevant. This is in stark contrast to the Hayekian view that it is such concepts as quality of goods, regulation, the protection of the consumer and morality that should be the guiding forces of the market. This economic philosophy seems to be at the very heart of the language of the EU and its guiding principles, that of a Kantian view of human dignity and ethical behaviour for its own sake, and 'that we should treat people as ends, not merely as means'. (McLean et al, 1996, p.264). This view necessarily advocates a highly regulated market that curbs the illegal mores of entrepreneurs who take advantage of weak legislation that many feel has created the high level of organised crime that is strongly mooted to exist in Europe.

But many observers feel that there is an agenda behind crime and the figures that prop up the arguments of a major organised crime problem in Europe. The first aspect of the agenda surrounding organised crime has already been discussed i.e. the commission seeking to create a European FBI and security and intelligence institutions using organised crime to justify their budgets. But it has also been suggested that the Communist 'old guard' within the Russian Ministry of Interior put out statistics on organised crime that are an implicit critique of capitalist economics. The suggestion being that organised crime is a consequence of the free market and private property. A further argument is to suggest that in creating a panic about the extent of organised crime Russia and the CIS can attract funding from the EU through Agenda 2000, empowering governments to combat a problem that ultimately also affects the West. The USA, perhaps, uses the concept of Russian organised crime to demonise an old adversary to inhibit and maintain their subordinate position within world markets. The conspiracy theories are limitless.