CAPITALISM'S ACHILLES HEEL Dirty Money and How to

166 CAPITALISM’S ACHILLES HEEL
the criminal component is compiled from the work of others, while the corrupt
and commercial components come from my own investigations.
First, criminal money. Global organized crime is estimated to have annual
revenues of around $1.5 trillion. 4 Drugs are a large part of this figure,
but the cumulative total of other activities exceeds the drug trade.
Estimates of the street value of global drug sales start at about $400 billion
annually and go far upward from there. Most of the street value stays in
the country where the drugs are consumed. The proportion that is involved
in cross-border financial flows is on the order of 15 to 30 percent of the
street value, or $60 to $120 billion. In Chapter 2, I estimate that just cocaine
and opiates trafficked out of growing regions generate upwards of $40
billion in wholesale values, and marijuana and methamphetamines easily increase
this figure to $60 billion, lending credence to the low-end estimate.
Counterfeit goods resemble drugs in that only a portion of global values
constitute cross-border financial flows. These items include videos, CDs,
DVDs, computer software, cosmetics, pharmaceuticals, jeans, handbags, and
more. The Counterfeiting Intelligence Bureau of the International Chamber
of Commerce estimates counterfeiting at five percent or more of world merchandise
exports. 5 The OECD lifts its estimate to as high as seven percent. 6
With current world merchandise exports at $6.5 trillion, this would suggest
that the total value of counterfeit goods is on the order of $325 billion to
$455 billion annually. Interpol places its estimate at $450 billion annually. 7
As with drugs, estimating 15 to 30 percent as the portion of value that is
laundered and applying these percentages to a consensus estimate of around
$400 billion of total value produces figures of roughly $60 billion to $120
billion of illegal money entering the financial system from trade in counterfeit
goods. The greater part of this business, probably more than threefourths,
emerges from Asia into world markets. At the low end, this indicates
$45 billion coming out of developing and transitional economies.
Counterfeit currency is a special category, much of which is the U.S.
$100 bill. North Korea and the tri-border region of South America are big
in the business. The numbers, however, are fairly small, perhaps $1 billion
on the low side and probably no more than $3 billion to $4 billion on the
high side, virtually all of it crossing borders.
Human trafficking is estimated by several sources at $10 billion to $12
billion annually. 8 Virtually all of this flow, as discussed in Chapter 3, comes
out of poorer countries.