Counterfeit Crime: Criminal Profits, Terror Dollars, and Nonsense

Author: R.T. Naylor
Publisher: Montreal, ONT: McGill-Queen’s University Press, 2014. 308p.
Reviewer: Rajeev Gundur | September 2015

In his book Counterfeit Crime, R.T. Naylor reminds us that context and historical underpinnings to positions can be manipulated to justify dubious academic claims and policy decisions, especially as they relate to illicit enterprise. As such, Counterfeit Crime will maintain its value over time, allowing readers to revisit various events and reevaluate their impact on how we think about and react to organized crime and terrorism. Whether Naylor’s analysis proves to be valid as time goes on is not as important as his Marxist critique of the dominant, liberal, contemporary perspective on organized crime, terrorism, and the western political landscape, a critique which is lacking in the current illicit enterprise canon.

Counterfeit Crime’s “Preamble” is an opening salvo that brings the book into sharp focus. There, Naylor presents a theme which is explored throughout the book: narratives, both in academic research and in public policy debates, play a powerful role in (mis)informing how students and the public understand and think about seemingly complicated and urgent issues such as “organized crime” and “terrorism.” Naylor shows that there is a market for rhetoric and ideas, and some “conversational entrepreneurs” are willing to spend mindboggling amounts of money to dominate this market (Bennett, 2003). The book is a means for entering the idea marketplace and contesting the dominant narratives that are sold there, even when they are false.

Within the pages of Counterfeit Crime, Naylor sets out to achieve three main objectives. First, he presents the dominant understandings of what “organized crime,” “terrorism,” “the underworld,” and the role of money associated with these elements involves. Second, he discusses the role of “free-market” politics (especially when it is couched within the realm of evangelical Christian politics) in creating and facilitating acts, such as market manipulation, corruption, and tax evasion, which society, on its face, condemns, but, in practice, does little to impede. Third, he explores our understanding of how these two elements are related to one another. Naylor presents his argument by recounting conventional views of what organized crime and terrorism look like and then challenging these views; thus providing the reader with elements of both sides of the debate which often get lost in the partisan presentations of facts. Counterfeit Crime’s ultimate goal is to urge the reader to continue to counter such rhetoric without developing meaningless or misleading rhetorical counterpoints that end up costing us unnecessarily.

Counterfeit Crime’s first order of business is to dissect the narrative of intellectual property (IP) theft which has recently been likened to several ills, including terrorism. Much in the same way that Peter Andreas (2013) does in Smuggler Nation, Naylor reminds the reader how intellectual property theft plays a role in the development of domestic industry, while the state through patent law protects its nascent industries, regardless of where the underlying ideas are developed. By describing this series of events relating to IP theft, Naylor underscores the hypocrisy that US-based companies practice when they demand that their IP rights be enforced abroad and the US government chooses to support those demands.

In addition, Counterfeit Crime underscores how organized criminal interactions have changed very little over time. They have long relied on small (and easily replaceable) groups of people doing business with each other. Furthermore, when discussing illegal enterprise, Naylor emphasizes how such criminal activities historically have involved groups that work with other groups on an often ad hoc basis which could be better coordinated. In short, there is no overarching criminal conspiracy that holds vertical control over organized crime and/or terrorism. Nonetheless, the overarching conspiracy claim is one that is repeated, whether it is the dominance of Sinaloa in the drug game, or Al Qaida and then ISIS in the terrorism game.

By emphasizing the relatively small size of these groups and how their interactions have largely been the same over time, and by accounting for changes in scale due to growth in society as a whole, Naylor strips the shine off the rebranded and repackaged threats that are sold en masse to the public with a degree of hyperbole that would make William Randolph Hearst proud. Unfortunately, although Naylor is right in his analysis of organized conspiracy, given the way these topics are covered in the media and discussed by “experts” who appear on pundits’ talk shows, it is very difficult for even an informed reader to accept Naylor’s point that the vast majority of conspiracies are events which are undertaken by a few, not necessarily well-equipped, motivated offenders.

Continuing with his efforts to dampen the sensational claims governments and policy wonks often make, Naylor turns his attention to money. Naylor reminds us of the age-old methods to move money outside bank transactions, using the hawala and the quanxi systems. He then points out how the big number estimates provided as the value of the underground economy, the amount of money laundered, and the losses due to IP theft are impossible at best. Often, criminologists base these estimates on choices which drive the reports’ sponsors’ policy outcomes, predicated on assumptions that make little sense otherwise. No one who buys a fake Prada handbag from a guy selling handbags on a blanket on the street believes that the handbag is a genuine Prada. Nor is that purchaser likely to buy the real item should no fakes be available (Levi, Innes, Reuter, & Gundur, 2013). Such examples occur throughout the text to remind us of the power of public narrative in creating a sense of urgency while distorting empirical facts.

Yet one potential shortcoming of Naylor’s analysis is that he seems to underplay the harms of IP theft by focusing on fashion items and cigarettes and the value of estimating. While the reported numbers are often farcical, they are not always harmless. IP theft and piracy can result in significant harm, particularly as one considers medicines or any other product that needs to be of a certain standard in order to ensure safe usage. Rather than dismissing such harms as a byproduct of the clearly partisan, industry-driven estimates, Naylor should advocate for the need for more reports that better estimate the costs and potential harms of such practices so that we can make reasonable assumptions which could lead to reasonable policy outcomes.

That being said, Naylor probably does not hold out hope for reasonable policy outcomes given the historical record. He lambastes the anti-money-laundering (AML) regime, which has not been consistently successful in doing what it set out to do efficiently: “block the entry of illegal funds into the legal financial system and to facilitate finding, freezing, and forfeiting them once they are inside” (106).

Not only does the AML regime expend more money than what it is worth, it is the basis of other inefficient policies which force tax collectors to assume a law enforcement role, which is outside their domain. Naylor points out that the AML regime doesn’t stop the flow of money to insurgency groups, a claim which is likely true. However, one should remember that terrorist attacks, even large ones like September 11th, don’t cost a tremendous amount of money. Such attacks run on the order of tens or possibly hundreds of thousands of dollars, which pales in comparison to the billions spent on military and defense spending.

Naylor’s further skepticism of the AML regime is well-placed, given the reports that large swathes of drug money are being held in US and UK banks without a single bank employee being punished for this crime. Banks prefer to use dirty money to invest and to defend the flight of their capital to offshore competitors. States lose out both in terms of their economic wellbeing and their own legitimacy by failing to earn receipts from taxes on the laundered or fleeing funds, and by showing, again, that money can buy freedom from prison. The value of money in avoiding trouble or responsibility is a particularly damning point that should cause citizens to question whether their democratic states are indeed democratic.

The third quarter of the book focuses on the role of religion in politics, dubbed “Theopolitics,” and how it shapes the moral compass of the US in particular. It is unfortunate that those who ought to read this part of the book are the least likely to ever read it. For the rest of us, Naylor again provides a historical lesson, reminding us that anti-Islamic attitudes and their resulting political consequences have been a part of western politics for a very long time. To develop this point, Naylor recounts the history of the Barbary States’ corsairs, a group of marauders who competed with the Christian privateers. In spite of the prevailing rhetoric of the time, the Muslim corsairs were actually less brutal than their Christian counterparts. However, US political actors did not hesitate to demonize and target the Muslim corsairs when it suited their politics.

Today, the agenda is set even more strongly in terms of religious overtones. Naylor reminds us that the elites of the past were not necessarily fervently of the right and that, since World War II, the US has experienced a rightward turn in its theological positions with an increase in religious posturing within political rhetoric. Naylor argues that Christianity, as it is politicized in the US at this point in time, has served as a counterpoint to what is labeled as evil, like communism and Islam, or any threat that can be spun into a moral issue and a resulting social panic. It is important to keep in mind that the US needs an enemy to maintain its high moral perch and in turn its place in world politics. It is a highly hypocritical position, as Naylor points out, when Chelsea (née Bradley) Manning is now locked up for reporting abuses.

Naylor returns to the narrative of organized crime and terrorism to close out Counterfeit Crime, arguing that often there is less organization required to execute a given “organized crime” than what meets the eye. His examples of Timothy McVeigh, the KKK, and the Quebecois separatists, amongst others, support his argument that terrorism and organized crime require relatively small physical and monetary dimensions. To minimize the threats such actors pose, unfortunately, seems to miss one of the lessons that Naylor is teaching: the power of rhetoric. While the individual cells or groups may not equate a protracted or even a relatively significant threat of violence (compared to the actions of a warring nation), the power of the rhetoric that drives such groups is strong. It is that rhetoric that allows for smaller organizations, groups, and lone wolves, to act towards a shared goal, wreaking havoc along the way.

Those familiar with Naylor’s previous work will not be surprised at Counterfeit Crime’s often antagonistic style. For the uninitiated, Naylor’s presentation may be abrasive at times. He sarcastically uses offensive terms in an attempt to strip them of their power and to ridicule those who utter them. Moreover, he often belittles anyone who might not agree with his position. By doing so, Naylor creates haughty passages which ensure that his reader, at least the one who finishes the book, is a member of the choir to which he is preaching.

Even for those who agree with Naylor’s analysis, Counterfeit Crime can be frustrating in that it lacks practical, operationalizable solutions for the problems Naylor identifies. Naylor seems to be resigned to the truth vocalized by the old cliché that the more things change, the more they stay the same. Future readers who are less attuned to the historical events that Naylor recounts may benefit from the book in that they will learn about significant events and their context without the spin and hyperbole that often accompanies the dominate narratives on crime and terror. In addition to this historical value, there is much within this volume which the present-day audience, the public, politicians, and academics alike, ought to reflect on. If nothing else, Naylor’s book reminds us that we need to find solutions for the problems outlined within this book, and we need to work towards making it a historical account rather than a blueprint for the future.

Works Cited

Andreas, P. (2013). Smuggler nation: how illicit trade made America. Oxford: Oxford University Press.
Bennett, R. W. (2003). Talking it through: puzzles of American democracy. Ithaca, New York: Cornell University Press.
Levi, M., Innes, M., Reuter, P., & Gundur, R. V. (2013). The Economic, Financial & Social Impacts of Organised Crime in the European Union. Brussels: Publications Office.

R. V. Gundur is a criminologist based in Australia. He is the author of Trying to Make It: The Enterprises, Gangs, and People of the American Drug Trade. He can be found online at ravejudgerun.com.