Capitalism and Cocaine



Browsing in my local bookshop I came across Zero Zero Zero, Roberto Saviano’s account of the global cocaine industry.  His previous work Gomorrah, about the Neapolitan mafia, sold over 10 million copies in 50 languages and became a critically acclaimed film. The book combined visceral undercover reportage from Comarra-controlled factories, construction sites, and social events with a bleak analysis of transnational crime. Saviano argued that “it is not the mafia that has transformed itself into a modern capitalist enterprise – it is capitalism which has transformed itself into a mafia”. This comes from his foreword of Anabel Hernandez’s book Narcoland about organized crime’s colonization of the Mexican state (see my Daily Blog November 1, 2013). That both authors are under police protection attests to the accuracy of their testimonies. Skimming through Zero Zero Zero before purchase, I found two mentions of New Zealand. The surrounding context will be disclosed in this review.

Saviano’s analysis of today’s cocaine industry begins in South and Central America during the 1980s. In Columbia, the Cali and Medellin cartels were feuding over control of cocaine production and trafficking routes. Medellin’s Pablo Escobar had major distribution problems. The US police were interdicting coke shipments in the Caribbean and off the coast of Florida. Airport bribes were getting too expensive. Escobar sought help from Mexico’s Felix Gallardo, a former employee of the Federal Judicial Police. He tracked smugglers, studied their methods and routes before arresting them. Gallardo would, eventually, go to their bosses and propose that they organize under him as their boss. Saviano notes that whoever accepted became part of the organization; whoever preferred to remain independent was later killed. Gallardo created a nationwide cartel system of cocaine (and marijuana) supply into the United States. For each Columbian shipment, Escobar paid a commission to Mexican distributors who placed packages of coke with the American organizations (bosses, area managers, pushers). This became the Columbian-Mexican leg of the global cocaine system, amidst subsequent police busts and the growth of decentralized competition/warfare among the cartels. Of these, Sinaloa under Joaquim Guzman (El Chapo) became pre-eminent largely because of its high level Mexican government connections.

Meanwhile, the Calabrian mafia or ‘ndrangheta with an estimated annual revenue of over 50 billion euros forged links with Columbian cocaine exporters. Barely traceable cosmopolitan middlemen sustain the Italo-Columbian network by transacting with suppliers behind front companies and by devising ever-new methods of smuggling cocaine through the ports and airports of Western and Southern Europe. According to Saviano, white powder has been hidden in wooden doors, marble blocks, fake pineapples, metal containers, suitcases, children’s books, coffee shipments, and statues of the Virgin Mary. More recently, a two-legged Columbia-West Africa-Europe supply route has developed by ship and plane. Saviano succinctly explains how this works:

The truth is, Guinea-Bissau, like the countries that border it, is exactly what the narco-traffickers are looking for. Africa is fragile. Africa is the absence of rules. The narcos work their way into these enormous vacuums by taking advantage of tottering institutions and ineffective border controls. It’s easy to give birth to a parallel economy, to transform a poor country into an immense warehouse. A warehouse for a Europe increasingly dependent on white powder (p. 316).

All of the networks thus far described depend on money laundering: the process whereby dirty drug money becomes clean money via tax havens, hedge funds, and fictitious business operations. This is where the line between organized crime and official capitalism disappears. Major global banks are indirectly involved. Saviano points out that after the 2008 financial collapse and liquidity crunch, massive amounts of narco money systematically financed interbank loans. Wall St and the City of London are the world’s prime locations for dirty money laundering.

The 1989 collapse of the Soviet Union and Stalinist Europe allowed a corrupt elite of billionaire Russian oligarchs to forge alliances with the most powerful elements of Russian organized crime. Entire new markets and supply routes for cocaine and other drugs were opened up where Stalinism had once prevailed. These networks, like the Central and South American drug cartels, needed to constantly reinvest and launder money worldwide. According to Saviano, one major Russian criminal known as the Brainy Don ran operations “unopposed in the Ukraine, the United Kingdom, Israel, Russia, Europe, and the United States, and he maintained relationships with organizations in New Zealand, Japan, South America and Pakistan” (p. 276). And, an important Calabrian figure involved in the global cocaine trade, Nicola Ciconte, deposited laundered money in Australian and New Zealand banks (p. 195). Saviano’s structural analysis of the industry also includes a general sociology of the cocaine pushers who sustain demand. Such people could be anybody, depending on cultural, national, and socio-economic surroundings. Pushers can be upper-middle class professionals, blue collar workers, office secretaries, sports people, respectable business men and women – in short, those in the mainstream of society. Nobody involved in the retail end of the trade anywhere truly reflects upon the global capitalist networks to which they belong.

Roberto Saviano’s book provides a superb depiction of cocaine use and the cocaine business. It is crucial to appreciate the sub-title of this book: Look at cocaine and all you see is powder. Look through cocaine and you see the world. I would add here that Saviano’s account illustrates what global capitalism per se might look like if extreme neoliberalism was to prevail. The lack of financial regulation, the spread of individual greed and hedonism, the collapse of social ethics, and economic polarization are the preconditions for a barbaric form of capitalism which is synonymous with organized crime.  

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  1. Waiting fro my copy to arrive. I was fascinated to read the Herald article about Saviano as the parallel economies of the drug trade and their intersection with official economies have interested me ever since the Asian crisis in 1998 and the fast bounce back of stock exchanges after that hit.Th role of the Bush family while George senior was running the CIA in the distribution network has been documented by William Blum.

  2. Asian P dealers are making records profits here in NZ investing those profits in Auckland residential real estate!

    The latest record importation 445 kg, good margins and profitability in this business activity. Good distribution networks available through established gangs here in NZ.

  3. Superb Post @ Dr Wayne Hope.

    I wrote, just after the farce that was jonky all but pole vaulting up and down the stage when in a face-off with David Cunliffe leading in to the last ‘ election’, that jonky was high as a condor over the Andes . If jonky hadn’t done a line or two before that ‘ debate ‘ I’ll eat my own two day old underwear.

    The comparison you draw between neo liberalism and cocaine is an interesting one. I had an epiphany while pondering the moronic behaviour of the younger locals in our little town.
    They throw their junk out the windows of their shitty, noisy cars, they rip up the parks and grass verges, they hoot and bellow like baboons rolled in itching powder and they breed after slipping their common sense into neutral while heading down hill after throwing away the break peddle. And try talking to them as if they were in some way connected to reality? Forgetaboutit! The squeaks and grunts of what might be considered ‘ conversation in English is only recognisable because of the frequent use of the ‘ fuck’ word and talk of rugby and piss ups . And do you know what it is that’s rendered the last thirty years of small rural town denizens to such a dismal level of awareness and connection to any semblance of self respect and global politics? The booze .
    Is it this simple?
    Neoliberalism in conjunction with the Great New Zealand Institutionalised Lie ( Fleecing ( No pun intended ) farmers of their money and re investing it via dodgy, scam-money-lenders back into NU Zillinds financial circus act to be plundered and laundered by the likes of neo jonky’s educated beyond, not only their intelligence but their conscience .
    Small rural towns that once flourished under the wealth umbrella of farmer generated money were crushed flat by con-persons and swindlers . Aided and abetted by a corrupt and fearful MSM.
    That tactic has caused a mass migration of the brightest and most resourceful members of the rural workforce who headed to Auckland etc and Australia .
    Those who remained ? They just got pissed non stop and bred feotal alcohol spectrum disorder generations who, after thirty years , now think the highest level of human achievement is to do burn-outs on deserted roads . No wonder the National Government has a strangle hold on our rural infrastructure. And its money of course .
    @ Dr Hope. You’ve indeed perfectly described an equally perfect opportunity for NUZIL to be used as a money laundering country of choice . All aspects of our country lends itself exactly to that kind of operation.

    • Great New Zealand Institutionalised Lie

      Hi CB. As an appreciative reader of your erudition I’ve read dozens of references from you to this.

      Hoping one day you’ll spell out exactly the mechanism to which you refer.
      I suspect that I can’t be alone on this.

      • @ Richard Christie. Thanks for your interest and I certainly will.
        Drunkenness, laziness, depressions, distempers, discombobulations and/ or fits of blind rage accepted I should be publishing as the darling buds of September start to fall rotting from the twig.

        • Read todays story in Wake up New Zealand about what’s probably going to happen in September.

          In NZ they sent a mother of smaller children to jail for having some mariuana (spelling?) in her house ,while rich immigrants dump drug money in our banks as the author of this article says. The world is heading for chaos.
          On Rt news channel they commented that big business people in America lost trillions overnight on the stock market.
          That China is continuing to devalue it currency,in a bid to crash American dollar.
          September is going to be very interesting in a scary way.

  4. Martyn, It smells of more dirty tricks policy here.

    Another dirty plan to drug up our people so they cant think straight and notice what the NATZ are up to being collaborators for the rich and foreign money they say.

    So easy then for NATZ and their rich mates to keep plotting extortion and ruining our future now.

    Why would anyone high on drugs care what’s happening in the real world, as they plot and carve up what’s left before they finally leave these shores for brighter future places to plunder.

  5. whilst appreciating yr analogy surely here in nz it is alcohol that is ‘our’ cocaine..?

    ‘The lack of financial regulation, the spread of individual greed and hedonism, the collapse of social ethics, and economic polarization are the preconditions for a barbaric form of capitalism which is synonymous with organized crime.’

    that describes an nz in the grip/thrall of the alcohol-pushers…surely..?

    ..and as one who in the day consumed far more than my fair share of sth americas’ finest..

    ..i wd note it is a doddle to kick..(esp. compared to the likes of heroin and alcohol..)..

    ..i just decided i had had more than enough..and so stopped..just a little bit of willpower ..(some cannabis as a salve..)..and it was all over..

    i wd add the/a sub-warning about crack-cocaine..which i considered the most addictive of all the drugs i ever used..and obsessive to a horrifying degree..(and i would warn ‘never – not even once’..).i only spent about 3 months in that room..and then smoked a last to the airport..and i ran away to jamaica and holed up with the rastafarians..and smoked a baleful of weed to ease the withdrawals..take my experience as a warning..)

    ..but as for destroying our culture/causing lasting/ongoing damage..

    ..alcohol has it is alcohol-sodden..

    (and as for the outcomes..?..countryboy nailed it:.)

    ‘Those who remained ? They just got pissed non stop and bred feotal alcohol spectrum disorder generations who, after thirty years , now think the highest level of human achievement is to do burn-outs on deserted roads )’

    ..cocaine use doesn’t do

    ..and on a harm-scale i wd put alcohol 7-8 out of ten..

    ..and cocaine at 2-3 out of ten..(and crack-cocaine at 9.5 out of ten..)

  6. The crime involved with the drug trade is not an example of the excesses of free market capitalism but of the result of the State imposing restrictions on trade. The same sort of crime happened around alcohol when it was made illegal in the States in the 1920’s. Funnily enough it largely dried up after prohibition was repealed.

    • ‘The State’ – is usually comprised of people who have been engaged in enterprise, or give service to enterprise- eg people trained in laws.

      ‘The State’ is, at present, seldom comprised of horrid little oiks wanting to tax to extinction the wise and noble pro- and ex-ponents of wonderful ‘free enterprise’.

      If ‘The State’ is passing laws to control drug production and traffic it is most likely to ensure there are no newbies on the scene who could rock the boat for those already in the staterooms.

      ‘The State’ is an arm of enterprise for all intents and purposes – based on the evidence available.

      • Good to see you seem to agree with me. The reason crime is involved with drugs is as a result of the intervention of the State.

    • The only difference between capitalist and communist states is that in communist states the Govt takes the profits from the drugs!

      [Lionking, you have email. Please reply as soon as you receive it. Until then your posting privileges are on-hold.– ScarletMod]

    • Aha monsiuer Gosman!

      Let me guess:

      Your solution is to make the cocaine market legal?

      Why not? Neo-liberalism is basically Law of the Jungle in its purest form so it should not be illegal to deal in powerful drugs. The neolibs are always rattling on about less government control, and I would have thought the current do nothing government would have bought that argument.


      I guess it’s an opinion…

      • @ j.s. bark..

        gosman isn’t talking rubbish..i suggest you look at portugal to see the positive effects of/from decriminalising personal posession of all drugs…

        ..and if we are tallking i noted further up the thread..cocaine is less harm-inducing/addictive than alcohol/ locking people up for it is kinda crazy..

        ..and the coca-plant/ its’ natural form are a mild stimulant/ should also be allowed..

  7. perhaps gosman could explain away the two opium wars the chinese fought against their amoral british masters

    • That was two States fighting over a trade dispute. It was something that used to happen quite a bit in the past. Now we have more civilised and peaceful means of settling them. What was your point again?

  8. The lack of financial regulation, the spread of individual greed and hedonism, the collapse of social ethics, and economic polarization are the preconditions for a barbaric form of capitalism which is synonymous with organized crime

    – Sounds like the Nats to me.

    I welcome Judith Collins and John Key and the other organised criminals in the Nats to be tried in a real justice system.

    Winston bring back the Winebox enquiries but instead look at our PM and ex minister of Justice’s business activities.

    • Amen to your last statement Save NZ.
      Too many NAT MPs and “helpers” are shifted or kept elsewhere because they know too much.Ede, MC Cully,and one who resigned from parliament was put into
      Westpac bank as a top dog to avoid questions, I forget his name.
      Even Slater the whale was sent to Israel for a while I believe.
      The speaker stops awkward questions for PM ,all bases covered,unless someone brave enough to do what Save NZ says.
      Far too much truth in TDB that’s why its likely to be under attack.

  9. According to sources on the internet 25th Sept is the day the One World Order takes over. so if that happens Key escapes without penalty,hes part of the global elite it seems.Oct is when money ceases to exist.
    Some how I cant get worried,sounds a bit like the millennium scare ,it seems one person predicts it and copycats follow suit. hope they are wrong!!!!!!!!

  10. ‘For profit’ jails require full facilities to maximise profit , the easiest way of keeping jails full and making law enforcement look like they are doing something , as opposed to ‘ solving ‘ actual crimes , is to keep busting people for dope , white collar cocaine snorting crims, ie commodities traders, stock traders, currency traders, media personalities, sports stars , etc. can afford good lawyers and use the ‘ to convict would destroy their careers …’ ( again , as opposed to’ destroy the lives of their vulnerable children etc’ ) and tend to walk away scot- free, smirking and high five-ing … the rich get richer , the poor get the pitcha …

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