Illicit, by Moisés Naím

Global crimes and misdemeanours

In this book Moisés Naím, editor of Foreign Policy, turns the spotlight on a large and widely ignored problem: the growth of dangerous, corrupting and simply evil areas of the international economy. Arms smuggling, the illegal drugs trade, human trafficking, terrorist finance - all have expanded to an alarming extent, as the entrepreneurs of the illicit have exploited the opportunities opened up by new technologies and globalisation. While events will have made many of us aware of the existence of illegal trade, the (inevitably patchy) evidence on its scale, and its intertwining with everyday legal economic activity, is shocking.

The main argument of Illicit is that governments need to raise their game. Governments are not good at international co-operation, in contrast to multinational drugs business or terrorist network. The official response is slow, inefficient - and much too national.

It's hard to dispute this. Even where the official response has been relatively vigorous, such as terrorist finances, it's not clear how effective it has been. While it's harder for a bad guy to open a bank account in most places now, we have achieved this at the price of making it extremely cumbersome for ordinary citizens to do the same.

The vast global illicit economy survives, Naím suggests, thanks to the protection offered by relatively few states, or senior officials within them. This includes not only obvious basket cases such as Taliban-run Afghanistan but Russia and China. While the US, Japan and western Europe have cosy chats with Putin at G8 summits, Russia is one of the main hubs of money laundering and organised crime.

This is sobering stuff. However, there is a flaw with Naím's analysis, which is his presumption that everything illegal is equivalent. An act of intellectual piracy such as downloading copyrighted music for free is not morally equivalent to running a business selling fake handbags. Neither is remotely similar to kidnapping young women and selling them into sex slavery.

While the author acknowledges there are such gradations, he doesn't really draw distinctions in terms of the implications for government. For instance, governments have already given massive legal assistance to record companies. Making further progress against copyright "piracy" will require them to focus on serving their customers better, rather than suing them.

Illicit is a sobering catalogue of the trades we would prefer not to think about, but I would have liked more analysis about how to distinguish and address the variety of problems. The book is also too gloomy about the role technology plays in illicit business. Certainly, it's easy to move money around the world; but also easier to track electronic money than old-fashioned cash. Haven't our governments started to grasp the potential of the technology themselves? Reading Illicit left me fervently hoping so.

Diane Coyle's books include 'Sex, Drugs and Economics' (Texere)