Books and documents:
Agustí Chalaux de Subirà, Brauli Tamarit Tamarit.
Agustí Chalaux de Subirà.
Agustí Chalaux de Subirà.
Agustí Chalaux de Subirà.
Magdalena Grau, Agustí Chalaux.
Chapter 8. Impunity and disorder.
The instrumental features (anonymity, uniformity, mobility) of
this sort of historic currency bring about all sorts of crimes with, in
or for it; they make a metric and informative system (multicaptor) of all
the significant facts of each sale-purchase operation impossible; and therefore,
they prevent the experimental verification of any of the economic theories
«Qui paga, mana» (a Catalan expression meaning 'money makes
dependence') and «Laws are made to be broken» are aphorisms
born of a fatalistic history, where theses kind of anonymous currencies
have left most crimes and offences unpunished (for lack of evidence or
through well-paid «pressures») such as: treasons, trafficking
of weapons, persons or drugs, wars, attacks, abductions, forgeries, fiscal
fraud, double accounting, perjuries, prevarications, briberies, misappropriation
of public money, murders, slander, robberies, embezzlements, swindles,
speculations... On the other hand, the economic theories and policies are
permanently in crisis, lacking an experimental system of verification to
prove them according to facts and not to the interests of the power groups
or of the «prestige» of the economists defending them.
The best way to explain the three malfunctions of the present monetary
system is to resort to facts and evidence. Facts which speak for themselves.
Facts which take place as a constant historic fatality with which we must
live, while we hope that the morality or good-will of people will prevent
them from spreading. We attack on the effects, but we do not discuss the
instrumental facilities that help them to spread. Why should we do anything
at all if the cause is transcendent, if wickedness is consubstantial to
With the first malfunction, some facts were presented which appeared
in the newspapers in these last years, among which we repeatedly fins a
significant example of the instrumental inability to put an end to the
impunity of the trafficking drugs. We will avoid comments. The italics
indicate some of the features that should be taken into account. The information
given must be considered simply as an orientation. By definition, nobody
can know anything accurately on these matters.
Anonymous currency (metal or paper) prevents from anticipating, discovering
and condemning most of the criminal and punishable actions.
Some figures for 1985 in Italy are terrifying: the company Crimen S.A.
invoiced 15.000 billion pesetas in one year, one fourth of the gross national
product. «Under its different forms (Maffia, Camorra, etc.), and
in several activities which go from prostitution to the stealing of works
of art, going through the traffic of drugs and extortion, organized crime
entails a business of about 15.000 billion pesetas per year and gives «work»
to almost one million people.» «It is the most important company
in Italy.» «People consider less serious and with less responsibility
to report them, the «most common» crimes, to which little by
little it we get accostumed to.» «The trafficking of
narcotics occupies the first place in the economic ranking of the Italian
crime industry.» «1. Drugs: three to six thousand billion.
2. Prostitution: one thousand and a half billion. 3. Arms: 400,000 million.
4. Blackmail: two thousand billion. 5. Stealing and holdups: two thousand
billion. 6. Smuggling: 300,000 million. 7. Smuggling of works of art: 200,000
million. 8. Games of chance: 700,000 millions. 9. Currency traffic: a balance
of 5.000 billion and yearly movement of 500,000 millions. 10. Several illegal
activities: one thousand and a half billion.» «However, the
difficulty to fight this great economic underground factory is enormous.
In the first place the lack of jobs [...] urges many young people to resort
to the crime enterprise. In the second place, there are easy profits in
this underground job, even if it entails greater risks1».
«Every day italian politicians, illegally pocket 900 million pesetas
whether for personal ends or for their parties. Messrs. Corrupció
S.A.'s turnover occupies the twelfth place among the Italian companies,
after Olivetti and before Alitalia, If we sum up all the sorts of economic
corruption with the political corruption in Italy, we come to the incredible
figure of one thousand and a half billion pesetas per year2».
«Spaniards think that law only assists the wealthy. Of the 61
per cent who think that laws benefit some groups more than others, 84 per
cent think that it is the «rich», the «powerful»
or the «high classes» who are benefited, and only a 10 per
cent think that it is the «government people», the «politicians»
or the «socialists». 75 per cent think that when the time comes
to apply the law, it is done in a different way depending on who is concerned3».
«Hidden economy will move 10.000 billion pesetas in 1989. Prostitution,
procuring, resale, trafficking of drugs, capital flight, even the simple
work done at home, are today in Spain a suitable ground for the generation
and diffusion of hidden operations. Over three million Spaniards, according
to the last study carried out by the Ministry of Economy, carry out some
of these activities which are generally kept secret with the intention
of evading taxes.» «This population, irregularly employed,
produces between 15 and 25 per cent of the GNP, foreseen in about 42 billion
pesetas in 1989.» «Every month spaniards spend 72,000 million
pesetas in prostitution, which means about 900,000 million black money
spent every year. With this amount, all the expenses presently accruing
to the Instituto Nacional de Empleo (training and enterprises systems)
could be metfor government grants4».
«The seven great Western States, with USA in the head, show a
strong opposition to the setting up of a system for the control of international
bank transfers of the black money obtained from the illegal drug trade
[...]. They have shown opposition for the negative repercussions that
this might have on the international financial system.» (!) «The
results are evident: as long as drug dealers have the possibility to move
around 300,000 million dollars every year, through the channels of the
international bank system, not only will it be impossible for the production
to drop and the demand of illegal drugs to decline, but, the risk of
this enormous potential of corruption finally, completely rooting banks,
police and governments, becomes increasingly greater». «It
is possible that the shyness shown by the seven great states in taking
actions against the economic Achilles' heel of the drug trade is partially
conditioned by the weight of drugs in international trade (9 per cent of
the total, that is double than the oil industry operations), but then there
is no justification in having the main repression always falling on the
small dealers and consumers5».
«We are not only worried by the damage to the consumers' health,
but also by the participation of gigantic criminal bands which ruin the
lifes of individuals and of groups, and, not the least serious, have taken
possession of five or six countries in Latin America.» «A small
number of criminals handles every year about 100,000 million dollars, more
than the GNP of 150 of the 170 countries of the world6».
«Just in the USA the drug trade produces a gross income of about
100,000 million dollars. A study by WEFA, concerning the year 1986, reckoned
65,700 million dollars as the gross income of organized crime. These huge
figures represent at least 50 per cent of the enormous and destabilizing
ball of black money which drifts over the planet looking for a legal
image. The simple fiscal fraud gives origin to the other half of this ball,
which is achieved with the funds coming from other forms of crime and smuggling,
from trafficking of arms, to illegal commissions and briberies. It is apparent
that the ball cannot roll without finding a way in the international
«Complaints lodged in the USA uncovered an operation coordinated
by the CIA, with a contribution of 10 million dollars made by the Colombian
«Medellín cartel», earmarked for the Nicaraguan «contra».
«Drugs are outlawed», discloses a USA anti-drugs agent, «but
its money is appreciatively received8»».
«The Banca d'Italia asks the European bankers to join together
to avoid recirculation of dirty money. Cosa Nostra will try to take advantage
of the single European market coming into force for its criminal purposes.
The Governor of the Banca d'Italia has said that it is necessary to carry
out a study of the tools and methods of action «in order to render
more effective the research activity» of those fighting against Cosa
Nostra and to protect the banks from «being taken advantage of
by organized crime. [...] One of the most frequent actions is to introduce
the requirement to record the important financial import operations and
those taking part in them, in order to allow the researching authorities
to recreate the financial flows of unlawful origin9»».
«With the huge amounts coming from the drugs trade, the maffiosi
try to get into the board of directors of the great banks and of financial
companies «as honourable men».» «To avoid these
incomes to be whitewashed and the Maffia getting into the banking system,
the governor of the Banca d'Italia has set up, among others, the following
rules for the Italian banks: cash deliveries of over 20 million lire must
be recorded, and all the documents concerning several operations
must be kept10».
«The Maffia is today in a position to jeopardize the autonomy
of the companies, distorts free competition and destabilizes the field
of financial intermediation. The financial power of the Maffia is a
bomb with delayed fuse for the international financial system. With
over 600 companies specialized in the financial leasing, personal loans
or real estate credits, Sicily has a density of companies derived from
the bank of the highest in Italy, while its industrial or trade activity
does not justify it. Oddly enough these societies are concentrated in areas
where the influence of Cosa Nostra is higher11».
The Government representative for the Plan on Drugs thinks that «it
is relatively easy to conceal the origin of deposits coming from the traffic
of drugs by means of a number of financial operations. In face of this,
the hardening of the rules on financial movements «has had, as a
consequence, a deterioration in the political image of legislators rather
than an impairment the movement of black money12».
Anonymous currency makes impossible the creation of a trustworthy measuring
system, exact and thorough, to avoid forgery and manipulation of facts.
Professor Santos M. Ruesga (1988) thinks that the effects of the expansion
of hidden economy may be located on three levels:
- Perturbation in the calculation of economic indicators, some undervalued
and others overvalued.
- Deviations between objectives and results of the economic policy. If the
indicators are wrong, the unbalances we want to correct become greater.
- Alterations in the working of the economic system caused by schemes of
economic policy biased in their vigour or direction.
The results obtained must be handled with caution, and it must be pointed
out that the methods of direct evaluation, as much as the indirect ones,
show important deficiencies in capturing the complex reality of the unobserved
area of economy.«It becomes more and more evident that there is a
need to round off and improve the statistic systems which are used as a
basis for the national accounting, in order to fill the voids which can
be found in them, and therefore cover the fields of activity not entered
in the books13».
After all these precautions, in spite of long lists of varied and contradictory
evaluations for every State, it shows a table from where it can be deducted
that the average of hidden economy in the OCDE countries in 1978 might
have been 9 per cent of the GNP, and that in two years (from 1978 to 1980)
it had increased about 5 per cent.
«From my position as a statistics expert I have observed that
in our country the lack of rigour is common, and goes from the inadequacy
and the poor quality of the basic information, to the treatment
and the patterns which are built on them, sometimes as pretentious as ineffective.
The low statistical and mathematical training of the economists educated
in the Spanish universities leads sometimes to an indiscriminate appreciation
for complex and unintelligible applications of these methods. Many of the
basic facts (of the input-output tables, of national, regional and even
provincial, quarterly... accounting) used for the models are already the
result of subjective evaluations; the objective feature of the statistical
tests appears then to be trimmed from the beginning, which happens markedly
in our country. But to give up the practice of complicated econometric
applications because the poorness and low quality of the basic information
does not justify it, is a very difficult decision for those who enjoy the
delight of such applications. Moreover, there is always the excuse that
the models may put in evidence the inconsistency of the basic information
and may even correct it14».
«Also in the social engineering of the economic policy it is useful
to have these equation cushions among which the responsibility of action
can be concealed. This is the reason why politicians, consultants and engineers
sometimes prefer more complex and unintelligible models, without knowing
for sure that they will supply better forecasting results than other easier
and handier ways. In any case the ambivalence of these techniques must
be pointed out, since, on the one hand, they are greatly helpful to study
the behaviour and evolution of some given variables which allow to compare
and improve the original formulae, by means of completely lawful soundings,
but which, on the other hand, offer a wide field of operations to justify,
with supposedly scientific arguments and preconceived ideas.
«This is the direction of Harrod's interpretations, who shows
is the most realistic manner the possibility that «macroeconomic
engineering tries to maximize the electoral possibilities of the political
party in the government at any time, but is not as a result of a rational
calculation of what is best for the national wellbeing15».
Present day currency hampers the experimental comparison of the economic
theories for lack of a complete and consistent measuring system.
«'Whichever its interest, wheter it has a powerful or static logical
structure, whether it is expressed in a mathematical way, any theory
which cannot be compared with empirical information, or in disagreement
with the observed facts, has no scientific value16».
These affirmations may seem commonplace, and to a certain extent they are,
but if they were rigourously applied, considerable portions of standard
economy would sink17».
«In the so-called «hard» sciences, the most daring
speculations must sooner or later face experiments and observations which
carry out a permanent selective pressure; in economy, on the contrary,
we have the picturesque situation that there is no commonly accepted standard
to reject proposals, except that of formal inaccuracy. The concern to systematically
compare theoretical propositions and factual statements, is often absent
in «top» research. This is, in my opinion, a regrettable
situation which must be overcome. Our work tries to move the opposition
of rival approaches to the ground of empirical verifications, in order
to improve the objective evaluation of merits and discredits18».
«Taking integral economies for a model in a meticulous way, needs
the setting out and resolution of thousands or millions of simultaneous
equations. The result is that these models can never be verified, because
there is no way to know all the structural parameters presumed or postulated,
for the time being there are no tools able to process all the potential
information with a view to provide a forecast to be compared with the effective
information. As long as this situation is not overcome, while connections
are not found (whether partial and indirect) with the plane of reality,
it should appear evident that the risk that theoretical speculations in
economy are no more than theological entelechies, empty of factual contents,
is high. It is not a figurative warning; as a matter of fact, most of what
is published as a peak research in economic theory shows this feature.
Under a formal, some times overpowering, façade, substantial results
are conspicuously absent; lemmas and theorems are demonstrated according
to rigourous, mathematical procedures and rules, but the factual truth
of the propositions remains always in the most absolute darkness, as if
it had no importance19».
«Often the standard economic theory appears in the eyes of literary
people as a truly scientific and mature knowledge. This is just an illusion.
The profuse utilization of mathematical techniques of intermediate and
even higher level, some times disguises and conceals enormous weaknesses
of the layouts and the categories commonly used which, often dull restlessness
and block other progress lines20».
All the facts which have been weaved together in the three parts are
explosive. So much so, that it is preferred no to accept them. If we did,
we would be caught by a terrible panic. The situation is chaotic, in spite
of the appearance set «in order» by a society of «image».
Of these matters we know very little, and the little we know is frightening.
There is no theoretical guide, and the little there is cannot be compared.
Certainly, all this is very complicated. Not everything is, nor will
be, accountable or documentable. Evidently, not all is an instrumental
problem. But as far as it can be, why shouldn't we try to solve it? Couldn't
this help to reduce some of its unembraceable complexity? How can we document
crime? How can we obtain reliable information? How can we work out theories
to be compared with facts? Here are some of the unsolved questions.
S.A.», El País, 29.9.1985.
corrupció política mou a Itàlia mil milions diaris
de pessetes», Diari de Barcelona, 29.11.1987.
y finanzas», El País, 24.9.1989.
semanario The Economist pide la legalización del consumo
y distribución de las drogas», El País, 4.2.1989.
gran bola negra», El País, 18.12.1989.
de blanqueo», El País, 22.9.1988.
Banco de Italia pide a los banqueros europeos que se unan para impedir
el reciclaje del dinero sucio», La Vanguardia, 8.4.1989.
del Banco de Italia para prevenir el 'blanqueo' de dinero negro de la Mafia»,
El País, 9.4.1989.
dinero de la Mafia amenaza los circuitos financieros de la CE», Cinco
maneras de 'blanquear' el dinero del narcotráfico», Expansión,
M. Ruesga, «Al otro lado de la economía. Cómo funciona
la economía sumergida en España», Editorial Pirámide,
Madrid, 1988, pp. 57-58.
Manuel Naredo, «La economía en evolución. Historia
y perspectivas de las categorías básicas del pensamiento
económico», Siglo XXI, Madrid, 1987, p. 392.
Barceló, «Elogi de Maurice Allais», Diari de Barcelona,
Barceló, «Teoría Económica de los Bienes Autorreproducibles»,
Oikos-Tau, Barcelona, 1988, p. 8.