We live in the era of globalization. The shift from national to international in business, politics and ideas, over the last twenty years has defined this period of history, and we have got used to living in a global economy in which businesses, captial flows, and jobs flow across national borders.
But did you know about the global shadow economy?
This is what Misha Glenny’s book is about. The international shadow economy is big – according to figures from the IMF, World Bank and other research organisations, it accounts 15-20 per cent of global turnover – and yet we know little about it.
Obsession with Al-Qaeda and terrorism has blinded us to a bigger story. As Glenny points out, “in terms of the death and misery caused, terrorism is primitive and relatively insignificant”.
International crime is now global and spreads across national border much like Shell, Nike or McDonalds. Hence the title: McMafia.
From this starting point, Misha Glenny takes us on global tour of crime. We go from country to country, from internet crime in Brazil to smuggling in East Europe. The chapter I’m in the middle of at the moment is about the Japanese yakuza.
I am familiar with the popular image of the Yakuza from when I lived in Japan. Every now and again, in parts of Tokyo, or around the red light district of Fukuoka, they’d be pointed out to me. I kept my distance but I had heard of their enormous and intricate tattoos and the missing pinkies, taken to pay for an error or misdemeanor.
Misha Glenny explains the yakuza’s involvement in the bubble that built up in the 1990s, their ties to big business and so on, but the part that is most fascinating is his exposition of the their semi-legitimate relationship with Japanese society.
Until changes in the 1990s, the various yakuza groups would have publicly registered head offices, complete with signs and receptionists. Although that has since been clamped down on, they still exist in a bizarre semi-legal relationship with the state. Whilst technically illegal, every year the groups submit their membership details to the police. (Can you imagine burglars and muggers registering every year with Scotland Yard?) When Glenny meets his guide though guide to the Japan underworld, the guide explains he is the sixth-generation oyabun of the Yamaguchi-gumi. “This is like having a lawyer in the US who introduces himself breezily as Lawyer to Don Antonio Soprano of the New Jersey Mafia Corporation.”
This lawyer explains how the yakuza‘s rise to power all started with a misguided government policy after the war.
The key date was 1949. In that year, in an effort to discourage litigation which conflicted with the Japanese idea of wa (harmony), the government ruled that only 5000 students could graduate from the Legal Research and Training Institute in Tokyo every year. This has had a dramatic effect on the number of lawyers in Japan. By the late 1990s, whereas Britain had one lawyer for every 656, and the United States one for every 285 citizens, in Japan there was one lawyer for every 5,995 people.
Because the more lucrative option for these lawyers was to go work for big companies, few were left to represent ordinary members of the public. Into this vacuum stepped the yakuza.
The lawyer to the Yamaguchi-gumi explains: “If anybody went to court in order to get a debt paid, it would take an eternity and, if judgement was finally passed down in a case, it often resulted in nothing. The yakuza are able to offer a much quicker solution to the problem”.
The yakuza became a privatised police force. They expanded into any number of areas: business disputes, security, insurance, and property development.
A brilliant example of the law of unintended consequences.