A large, sinister pair of eyes stares out from the cover of the February 2011 Wired magazine, above the heading “The Underworld Exposed.” The rest of the face is darkened, melding with the shadows. At the top of the shadows reside the words “Counterfeit Ferraris, Sex Syndicates, Darknets, Secret Societies and More!” At the bottom, between “The Nine All-Time Greatest Cons” and “What’s Inside Heroin”: “How to Buy a Kidney, p. 112.”
The proverbial reader with two healthy kidneys, no fast car or darknet connection, and no subscription to Wired sits down to read this edition as soon as it hits the newsstands. In a simple story repeated from Palestine to Iraq, from Indonesia to Kurdish villages, there is a good chance that the reader’s copy is part of the “underworld” it exposes — having crossed at least some borders extra-legally. There is also a decent possibility that the reader is sitting in a chair made of timber from illegal concessions in Southeast Asia or Africa, beneath a lamp fueled by smuggled oil. Her jeans might be designer knockoffs from Asia or the Americas; the coltan in her cell phone might be a “blood mineral” from war-torn Congo. If she is eating while she reads, her snack might have been partly produced by illegal child labor half a world away. If she is nursing a nasty cold, she might be taking a counterfeit antibiotic.
Legality creates itself. A state issues laws to build and demarcate the state. The “illegal” may constitute an act against the state; but conversely it may represent a form of interaction and exchange outside the parameters of the state. In the flow of life across the world, it is often impossible to determine what is, in fact, legal: Different countries have different laws applied in different ways by different people. I find it more instructive to examine the “extra-legal,” a term designating the range from the illegal and illicit through the informal to the undocumented and unrecognized — all the movement of people and goods that takes place in the shadows.
The extra-legal is simultaneously the arena of horrific human abuses, banal everyday commerce and what many view as acts of nobility. There is perhaps nothing more despicable than the trade in children forced into sexual, industrial or agricultural slavery. Such human trafficking occupies one end of the vast spectrum of extra-legal exchange, most of which is mundane: auto parts, Barbie dolls, paint, copper wire, knockoff watches, blockbuster films, electronics components, vegetables, cigarettes and baby carriages. At the other end of the spectrum are people who smuggle essential foods and medicines to the desperate or disenfranchised. In war zones, starving and sick populations often hail these middlemen as heroes.
The extra-legal is not just about making money. It is also the realm of the dirty little secrets of our political world. It offers a window upon the pursuit of power, upon acute, sometimes lethal inequalities, upon those seeking to consolidate economic hegemony and those struggling to survive it. The extra-legal is about the mismatch between the borders of states or nations and the basic needs of populations. Like all secrets, it is all the more powerful for being banished from public accounting and accountability.
What is power in the context of the extra-legal? What is the economy? What, for that matter, are the very notions of borders, sovereignty and regions such as the Middle East?
A serious conceptual error circulates the globe. Some might say it is perpetrated. This error is the idea that political boundaries match the economic domains they delineate. In fact, the boundaries seldom line up and seldom can. But this fact is itself relegated to the shadows.
Politics is the purview of states, territorially grounded and legally demarcated. Economics is a term describing a continuously shifting sprawl of interactive networks that often straddle multiple borders, political and legal. The raw materials to make any given commodity or the human resources to provide any given service can be continents apart from the ultimate consumers; the routes connecting production and consumption can cross the domains of political allies and enemies alike.
A great deal of everyday activity takes place in the interjacence — the “between” — created by the poor fit of political boundaries with economic flows. Simply put, this interjacence is the gap separating the domain of the legal from the realities of exchange. It is not merely what lies between the spoken and the taboo, between ideology and reality; it is also where the clash of these competing realms is expressed. What turbulence is to be found in the world’s “between”?
A look at the full spectrum of the globe’s economic life shows that a considerable part is invisible to official accounting. Not only do the activities of transnational organized crime shape national and regional economies to a greater degree than formal indices record, but governments and legal businesses also dip covertly into extra-legal markets to maximize control over them. Few governments, for instance, admit that national banks can reap considerable profit (and thus accumulate power) by laundering money; that illegal sweatshops flourish inside their territory; that clandestine arms and pharmaceutical sales help “legitimate” businesses to thrive; that illegal child or undocumented adult labor and illicit resource concessions help traders to undercut the competition. Nor do governments want to acknowledge that most of this commerce exploits, rather than respects, borders.
In the best of circumstances, governments find this state of affairs to be a recipe for hegemony. In times of insecurity and conflict, interjacence is exacerbated.
A front-page story in the August 29 New York Times, covering the rebel takeover of Tripoli, noted that the Libyan capital was largely without food, water and gasoline. How Tripolitanians were surviving in these conditions, the paper did not say. It was a scenario familiar from many conflicts: To rebel against a ruling power, as the Libyan town of Misrata did the preceding spring, is to sever oneself from the institutions of that authority. Government-controlled banks, markets, trade routes, transport, social services and health care are generally unavailable to those challenging the government. And when the government collapses, as it did shortly after Tripoli’s own rebellion, necessities disappear altogether. Yet cities seldom die off in such times. Extra-legal networks, often run by the same groups mounting the political challenge, fill the gap. Food, water, medicine and gasoline are smuggled in; illicit connectivity circumvents the shutdown of the governing cyber-grid. Armed insurgents require still more underground provisions, running the gamut from weapons to training manuals and means of transport. Much of this supply crosses “no one’s lands.”
No One’s Lands
No country today is utterly self-sustaining. Even official exchange is frequently thwarted by laws, ranging from taxes and tariffs through restrictions and sanctions to charges of criminality and treason. In states divided by civil strife or fighting a war with another state, the legal barriers to commerce are higher still — with the international community often imposing embargoes that each of the warring parties (and their external allies) are then forced to navigate.
As a group of people on the front lines of a highly lethal war described to me:
We mostly control the more rural areas, and that means we have food. The enemy mostly controls the city centers and transportation routes, and that means they have modern goods. Our kids die without modern medicines; their kids die without decent food. We have to trade, and trade is treason.
And the dilemma of no one’s lands is larger still, as several generals explained:
We have tanks, they have petrol — they sell us petrol so we can use our tanks against them. We give them hard currency [for the petrol] so they can buy tanks to use against us. These are not “sales” you find in any reports.
Much of any country’s supply of food and medicine, as well as tanks and petrol, arrives via winding international routes. But the economies of war-torn, destabilized or transitional states usually rely more heavily than stable ones on foreign products and services, much of which are extra-legal at some point in the journey from creation to consumption. The political economy of interjacence is profoundly grounded in the armed conflicts of the twenty-first century. It runs from the global geopolitics of energy to specifics such as the US tax dollars used to pay the Haqqani network in Afghanistan for the safe passage of US military convoys.
Yet peaceful cosmopolitan centers are also no strangers to the dilemma of no one’s lands. Weapons, illegal drugs and trafficked human beings yield the highest extra-legal profits — these three commodities alone are estimated to produce between $500 billion to $1 trillion per year. Cyber-crime has recently begun to rival drugs in profitability. Running a close second in undocumented lucre are such illicit businesses as trafficking in endangered species, illegal pornography, valuable minerals, counterfeit designer goods and secondhand clothing, pirated software and entertainment, as well as food. Running blind — their profitability still largely unmeasured — are such black-market staples as counterfeit pharmaceuticals, building supplies, industrial and high-tech commodities, stolen identities and undocumented banking. The few types of illicit commerce whose dollar value can be guessed at are only the tip of the iceberg.
Extra-Legality and the Middle East
Havocscope.com, a website dedicated to information on the global illicit, features links to news stories on illegal activities for all regions of the world. On September 1, the following stories topped its Middle East page:
♦ In the first five months of the 2011-2012 fiscal year in Iran, 1,534 drug traffickers were arrested and 12,527 kilograms of opium seized.
♦ In Iraq, virgin teenage girls are reportedly sold for $5,000, double the price of non-virgins.
♦ Forty-two percent of all cigarettes smoked in Iran — that is, 25.2 billion cigarettes per year — come through the black market.
♦ Illegal gambling in Israel is an estimated $4.1 billion business yearly.
♦ Each year, an estimated 14,000 people are smuggled into Israel, paying $1,500 per person, yielding a total of $21 million.
♦ The proportion of counterfeit goods seized in the EU that had originated in the United Arab Emirates declined in 2010 from 15 percent of the total to less than 1 percent.
♦ In Iraqi Kurdistan, one can expect to pay $150 for a teenage prostitute, with one province home to about 400 locations for prostitution in 2011.
♦ Iraq’s parliament is investigating reports that 20,000 government officials used fake degrees or other documents to win their jobs. Prices: $1,500 to $7,000.
♦ Six to seven Iraqis were kidnapped each month in 2011; the average ransom paid was $50,000.
Havocscope’s list is commendable for highlighting something besides the rock-star illegalities — arms, drugs and sex trafficking — to delve deeper into the conditions shaping lives.
The fluidity of extra-legal markets is visible in Havocscope’s listings over time. When the February Wired was published, the site’s top Middle East stories offered glimpses at: the notorious tunnels (employing 20,000 people) and the illicit antiques trade (60 percent of vintage coins) in Gaza; oil smuggling in Iran (1.8 billion liters spirited abroad) and Iraq (30 percent of the refined fuels sold on the black market); Iran’s overall intake of contraband goods ($16 billion yearly); human trafficking (2,000 women yearly) and counterfeit drugs ($26 million seized in 2008) in Israel; and the region-wide commerce in amphetamines (15.3 tons seized in 2008).
The collections of stories at Havocscope, however, do not cover everything. In the United States alone, white-collar crimes like tax evasion salt away as much illicit cash per year as do the global black markets in drugs and weapons, if not more. Yet figures on white-collar crime are much harder to come by. In addition, there is a virtually endless list of flourishing extra-legal activities that are barely studied: the dumping of toxic waste; the counterfeiting of high-tech hardware; under-the-table currency exchange; the smuggling of body parts; illegal resource concessions from fishing to timber; unlicensed provision of health care. Left unasked as well is a deeper question: What to make of governments and security forces that willfully ignore extra-legal activities because they bring money, goods and services into the country?
A Different World Map?
Ultimately, however, in following the networks of production and exchange through regions, among national, ethnic and religious affiliations, across borders and within no one’s lands of resource inequality, a new question emerges. What is a concept like the “Middle East”?
Say cotton is grown in one Asian or African country, shipped to another for industrial weaving, sent to a third to be cut and partially stitched into a shirt, dispatched to the US where the shirt’s front and back are fastened together and, finally, smuggled across Europe into the hands of a Middle Easterner. Where, exactly, was the shirt made? US law states that if two separate panels of an item of clothing are sewn into a complete piece on US soil, then the item can be labeled “Made in the USA.” But was this shirt “made in the USA”? It has moved across three continents, two oceans and an undetermined number of political, legal and conceptual boundaries. The social life of this shirt is not the exception in today’s world, but the norm.
In the neural-like net of the extra-legal, no country has sovereign autonomy. No population or region maintains an identity in isolation from others. The extra-legal is interwoven with states, clearly, but not bound by them. It is, by definition, largely transnational, traversing the no one’s lands with a certain sovereign autonomy.
Workers in the Gaza tunnels, a mother clutching the DVD of a blockbuster film for her children as she crosses the checkpoints demarcating Israel and Palestine — these people represent very local interpersonal exchanges that nonetheless reverberate widely. An individual tradesperson in Iraq or Somalia, like similar traders throughout the world, might be hawking foodstuffs obtained via barter from Europe, counterfeit clothing and medicines (from the Italian mafia and India, respectively) and pirated software (from Shanghai or Silicon Valley). Some of these goods might have been bought with money transferred from Singapore or Great Britain via the hawala banking network. In the vast current of the extra-legal, few know with any precision what about their trade is licit and what is not.
Street vendors do not necessarily trade in more extra-legal goods than legal retail businesses: The above descriptions would remain the same if the phrase “workers in tunnels” were replaced with “workers in department stores.” Counterfeit parts are found in legal laptops and cars; laundered money passes through the friendly neighborhood bank; reputable investment firms are fined for insider trading; and smuggled fish ends up on plates in primary school cafeterias. Such is the nature of the no one’s lands: The extra-legal is imbricated in the sovereign world of the legal at the most fundamental level, simultaneously allowing for the abuses of warlords and robber barons and providing critical necessities to average people.
The extra-legal spills over many kinds of borders. It is not confined to commodities and profits, but also impinges upon high politics and geostrategy. In 2007, Estonia faced a weeks-long cyber-attack against some of the country’s major computing systems (as did Georgia in 2008). Three years of subsequent improvements in hacking produced the Stuxnet worm deployed against Iran’s nuclear program in 2010. Both attacks were sufficiently sophisticated to suggest the involvement of foreign governments or, in the Estonian case, the botnets of organized crime.
The international networks that move people, goods and money across borders represent a bloc that rivals nation-states in financial clout. Consider that Bernie Madoff, the jailed Wall Street financier, netted more than $50 billion with his Ponzi scheme. By World Bank calculations, 117 of the world’s countries have gross domestic products of less than $50 billion. Only 55 countries (out of 185) have a GDP of more than $100 billion.
The corporate giants that trade on formal markets are not the financial elite, but the legally recognized elite. The major states of the world are not the only great powers, but merely those with a seat at the United Nations. Since no extra-legal gross domestic product — or XGDP — exists, no stock market valuations for extra-legal multinationals are calculated, no exchange rates for extra-legal currency conversions are published, and no extra-legal international trade agreements are recognized by states, no one can say who the superpowers of the extra-legal world might be. Nor can one assess to what degree they intersect with the legal world of sovereign states and formal businesses.
The Middle East (like “the West”) is a concept based in legal designations, made by states for states. What would the world map look like if extra-legal networks — and the interjacence of no one’s lands — were charted in addition to the boundaries of formally recognized states? Would the whirls and eddies marking the centers of economic gravity in the world — and the attendant political power — produce a far different constellation of identities, nations and regions than that familiar from textbooks? Would the hierarchy of national economies, now ranked by GDP, look significantly different, with some of the haves trading places with have-nots?
“Middle,” as in Middle East, carries several connotations, the most obvious being geopolitical, and the second being economic. By World Bank reckoning, most populous countries in the Middle East are “middle-income” — roughly midway between high-income economies like Japan and the US and war-afflicted countries like Congo and Afghanistan.
But “middle” can have another connotation: To be in the middle in the flow of exchange is to wield a particular kind of power. No one can say with authority where the Middle East falls on a scale that assesses the entire economy defining the world today — the sum total of all economic production, exchange and consumption, including the extra-legal. Nor, until such facts are known, can the legal world understand the depth and extent of suffering and violence in the shadows, the heroism of those who brave no one’s lands solely in pursuit of the greater good, the necessities that make life livable throughout the world, or the true range of factors that allow economies and states to function.