Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy by Moises Naim is a welcome and much-needed counter-balance and corrective to the unfortunate preponderance of Utopian doggeral saturating many accounts of the effects of globalization and technology on us all. We are all quite familiar with the front of the hand, but the back is just as big, and we would all be well-advised to explore the dark side in greater depth. Mr. Naim, the editor of Foreign Policy Magazine, presents us with an excellent opportunity to do just that in this provocative and highly readable work.

The onslaught of globalization has unleashed a tidal wave of bad stuff–everything from arms trafficking, human smuggling, and money laundering to music bootlegging. Naím is a former executive director of the World Bank and Minister of Trade and Industry of Venezuela. In Illicit, he unties the connections between the Colombian cocaine dealer, the New York banker steering money to offshore tax havens, the Albanian forcing women into prostitution, and the Chinese market stall-holder selling counterfeit DVDs.

As John Robb points out in his illuminating blog, Global Guerrilas, “these networks live in the space between states. They are simultaneously everywhere and nowhere at the same time. [Naim]Â shows how these networks make money through an arbitrage of the differences between the legal systems (and a desire to prosecute) of our isolated islands of sovereignty. He also shows how their flagrant use of corruption can enable them to completely take over sections of otherwise functional states.

“By all accounts the amount of money involved is immense. In aggregate, the networks that form this parallel “black” global supply chain, have a “GDP” of $1-3 trillion (some estimates are as high as 10% of the world’s economy) and are growing seven times faster than legal trade. These networks supply the huge demand for:

• Drugs (both recreational and pharmaceutical).
• Undocumented workers (for corporations, home services, and the sex trade).
• Weapons (from small arms to RPGs, many come from cold war arsenals).
• Rip-offs of intellectual property (from digital content to brand named consumer goods).
• Laundered and unregulated financial flows.

“This supply chain isn’t run by the vertically integrated cartels and mafias of the last century (those hierarchies are too vulnerable, slow, and unresponsive to be competitive in the current environment). The new undifferentiated structures are highly decentralized, horizontal, and fluid. They specialize in cross border movement and therefore can handle all types of smuggling simultaneously. They are also very reliant on modern technologies to rapidly transport and coordinate their global operations.

“The similarity between these commercial networks and those of modern terrorism (my [Robb’s] global guerrillas) is not incidental. These networks are optimized for the melted map we currently live in. There is also considerable crossover between these networks since terrorists/guerrillas use these networks to both fund and execute their operations – and – smugglers see terrorists/guerrillas as a means to free areas from state control.”

In Naím’s view, globalization’s “diffusion of power to individuals and groups” and away from sovereign states has created a “smuggler’s nirvana,” in which the lines between legitimate and illegitimate economic activity are blurred and criminal networks possess an unprecedented degree of political influence. Making matters worse, the widening gap between global haves and have-nots—what Naím calls “geopolitical bright spots and black holes”—has increased the incentive for individuals and groups on both sides of the divide to participate in illicit activities.

The remedy? In addition to offering a bevy of specific policy ideas, Naím urges readers to move away from simplistic moral denunciations and to focus, instead, on reducing the demand for criminals’ goods and services and on weakening the incentives for ordinary people to become involved in their enterprises.

Although these dark networks will continue to grow, if not thrive, in the foreseeable future, the P2P Force will as well, simultaneously developing and generating extensive positive and legal frameworks for countless individuals to participate in, increasing the size of the front of the hand as we go, providing more and more opportunities to those hesitating at a fork in the road, contemplating their alternatives and direction.

Our recommendation? Get this book now, assume your favorite position, and read it! Moises will provide you with a compelling and well-written story. One that will certainly expand if not radically change your view of where our “flat world” is headed.