CAPITALISM'S ACHILLES HEEL Dirty Money and How to

244 CAPITALISM’S ACHILLES HEEL
This is a key point. The overriding intent for illegally moving money
out of poorer countries is the hidden accumulation of wealth. And the West
has welcomed and serviced this intent for a century.
Myth 3
Related to this is another myth, the idea that it doesn’t make any difference
whether rich people hoard their money abroad or in-country; it still
isn’t available to the poor. This is most certainly not correct. Trying to hold
on to large sums of ill-gotten gains inside one’s country fails the secrecy
test, which requires disguising how those funds were accumulated in the
first place. Furthermore, large sums become known and pressures mount
from shareholders, managers, employees, unions, wives, mistresses, children,
brothers, sisters, nephews, nieces, aunts, uncles, cousins, in-laws,
churches, synagogues, mosques, charities, and complete strangers to distribute
the wealth to those less successful at the art of rapacity. And, most
importantly, it makes a huge difference to the local economy whether
money is kept in-country or out-of-country. Abroad and unrecorded domestically,
it has little value to the local economy. At home and recorded
domestically, it’s likely to be in a bank deposit that can provide funds for
loans, or it’s in stocks or bonds or in real estate, or it’s simply spent, producing
a multiplier effect through the economy as the money circulates
among businesses and individuals. More on this later.
Talking about these issues with me, Galal Amin, the distinguished economist
at American University in Cairo, said, “Consumption in poor countries
often has a cap, and above that cap rich people take their consumption
abroad.” 2 He’s right; large savings, and especially those illegally accumulated,
want to exit from developing or transitional economies. And western businesses
and banks are indeed most generous and accommodating in providing
the means for their departure.
Myth 4
The legal and illegal components of transfers abroad cannot be distinguished.
On the contrary, the two types of flight capital have a very clear difference.
The legal component stays on the records of the corporation or
proprietorship or individual making the transfer. If a business chooses to