CAPITALISM'S ACHILLES HEEL Dirty Money and How to

Inequality: The Gap Matters 209
dating foreign coffers, producing disaster for her and her child, as it had also
for millions of others.
This was a shattering experience for me. And before you begin to think
this is a tale told by a bleeding heart, let me ask you to imagine that you
were in that hotel room. Further, let me ask you to keep this image of Mary,
weeping, on her knees, in mind for the rest of Part II. Then you will more
easily grasp the linkage between dirty money and global poverty and inequality,
which is the second part of capitalism’s threatening continuum.
The unchecked diversion of trillions of dollars out of other countries
into western accounts not only constitutes the biggest loophole in the freemarket
system, as Part I concluded. It’s also the most damaging economic
condition impoverishing the poor in developing and transitional economies,
as Part II reveals. It drains hard-currency reserves, heightens inflation, reduces
tax collection, worsens income gaps, cancels investment, hurts competition,
and undermines trade. It leads to shortened lives for millions of
people and deprived existences for billions more. Within the economic
realm, as distinguishable from political affairs or environmental constraints,
nothing approaches the harmful effects caused by massive outflows of illegal
money from poor nations into rich nations.
“So what?” as I’ve heard many times. Or, as a senior Federal Reserve
Board official in Washington asked, “If the foreign government isn’t concerned
about it, why should we be concerned about it?” 3
“So what?” “Why should we care?” Government officials, academics,
and businesspeople have expressed these sentiments repeatedly. And it always
leaves me completely incredulous. The cause and effect relationship between
dirty money and global inequality is not some vague, abstract notion.
It is an overarching reality in today’s world. It devastates or impairs the lives
of Mary and her son and billions like them. Their poverty flows in part from
our complicity. And, given the complicity of affluent nations in encouraging,
accommodating, and holding illegal wealth from abroad, the extent of
disparity across the planet needs to be understood and appreciated.
Why should you care? Because of all the features of global capitalism,
good and bad, the one reality that has the potential to bring the structure
down is inequality. On this rock the system could founder.