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Crackdown

Crackdown

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The Age of Dis-Consent

The Age of Dis-Consent

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 Personalized Swat Teams for The Filthy Rich

A crime fiction author is constantly patrolling the perimeter searching for interesting crime stories, hints of cultural trends in crime enforcement, and for the criminal characters who will become the latest generation of men and women to make a fortune in crime.

My Vincent Calvino series is largely set in Thailand. That means I am alert to and on the look for information about crime in Thailand. Like all commercial activity, crime also is divided between the 1% and 99% in terms of wealth concentrations. I’ve written about criminals whose activities place them at the bottom and at the top of the illegal crime proceeds world. I’ve also written about the intersection where the legal and illegal wealthy gather and share a meal.

I am also interested in how others perceive Thai crime and Thai criminals. Wikipedia, that first rest stop on the journey to enlightenment opens its article on crime in Thailand with this:

“Crime in Thailand is a persistent, growing, complex, internationalized, and under recognized problem. Crime in Thailand is reported by the Royal Thai Police, however, there is no agency which acts as a watchdog and publishes their own statistics.”

The first sentence is one of those Chinese fortune cookie pronouncements that reads like written by a sage until you think how you could substitute Thailand for a few dozen other countries. Or it would be the sentence of choice for a host of unrelated things. For example:

“Misshaped mango in Thailand is a persistent, growing, complex, internationalized, and under recognized problem.”

You get the picture. Research limited to Wikipedia has its limitations. That’s why a writer, like a journalist, need his or her sources on the street, and must spend time on the street cultivating old and new sources, and experiencing the life in all of its odd, strange complexity.

It is the second sentence about statistics from Wikipedia that is more interesting. In crime writing, one of the first things an author needs to figure out is who runs the statistics business about crime. It is, after all, a business, and a vital one. That fact about statistics about Thailand hints at a few matters about crime that you ought to pay close attention to. If you control the statistics that reflect upon your competence and ability to do the job, you just might have a bias about how those statistics are collected, stored, analyzed, communicated, and the policy implications they imply. It’s called a conflict of interest. Trusting the fox to count the chickens is good for the fox but not always so good for the chickens.

What Wikipedia is saying that without ‘independent agencies’ (a loaded term if there ever was one) tracking the statistics, you have to use a certain amount of caution regarding the reliability and accuracy of the statistics that the police are keeping. You don’t need a fortune cookie to tell you that he who makes the cookies is the one who is telling you what your future holds. Don’t let the mango growers define what is a misshaped mango unless you have an appetite for some funny business about the nature of geometry.

Crime comes in all kinds of packages. In Thailand, if Wikipedia is to be believed, we can carve up the criminal activities into: drugs, rape, white collar, tourist scams, human trafficking and prostitution, prison crime, identity theft and passport racket, gender violence and school violence. A kind of pick and choose your poison list. If you want to write a crime story, you’ll find some bones that haven’t been picked clean by the previous pack of hyenas with typing skills.

The problem with this approach is that it’s so 1990s or early 2000s. If you want to know about the future, study crime statistics and trends. That is the story of criminal activities down the road and around the bend. Most crime operates as a kind of rough and ready redistribution of wealth that capitalism allocates between segments of the population.

Before looking ahead, let’s look at the history of one crime hero. Robin Hood was a legend. A gang leader, militia boss, mafia chief, and Robocop rolled into one; someone who had empathy for the little people. That is why it is a legend. Because over the sweep of history, Robin Hoods don’t make a dent in the wealth of the powerful and they don’t go around singing ballads in the forest with a group of merry men. Most of them are imprisoned, exiled, or killed. You can’t look only at Robin Hood without looking at the position, influence and power of the Sheriff of Nottingham Forest and his boss. After all, it is the sheriff who is keeping the statistics on crime.

The Sheriff of Nottingham Forest who is responsible for maintaining law and order and recording on the criminal activities going on inside the forest historically has suffered from some serious credibility issues. Nothing much has changed in this part of the forest, urban and rural. Thai police who keep tabs on the ‘illegal’ nightspots in Bangkok and collect the statistics about crime including illegal gambling, prostitution and corruption. Getting tough on crime with harsher penalties is also a way to increase revenue flows from those who violate the laws so they can stay in business. When a man’s job depends on him not knowing something, there is a good chance he will argue against attempts to interfere with his ignorance. He will fight against anyone who seeks installing some windows in the wall of authority. That can be dangerous.

Chaiwat Limlikitaksorn, is a Thai forest park chief, who has been accused of involvement in murder, arson and disappearances in a forest under his jurisdiction in northern Thailand. Though charged with serious crimes, he continues to work in his position. Por Chalee Rakcharoen (nicknamed “Billy”) a young ethnic Karen environmental activist, was recently stopped in the park by Chaiwat and fined for possessing six bottles of wild honey before supposedly being sent on his way. By coincidence, Billy had been on his way to gather signatures for an appeal against the park chief’s abuse of power (for torching homes of Karen villagers, indigenous forest dwellers – Billy’s people). Billy never arrived. No one knows where he is. Chaiwat is quoted as claiming that he has no knowledge of what happened to Billy. He was the last person to see Billy alive. The case has been in the news but such cases in Thailand quickly fade away as media attention is drawn elsewhere. In the real world of Thailand, political activist in the tradition of Robin Hood who challenged authority don’t last long whether on the streets of the city or the forests in the country.

The obstacle faced by modern criminals, who fit less in the tradition of Robin Hood and are more likely motivated by personal gain, is finding out who has the wealth, where they keep it, and how best to organize a heist to relieve that wealthy person of part of their riches. The first thing you figure out is that the real criminal class is a closely held secret, largely very small, out of sight, and never in danger of prosecution.

By the fact you are reading this blog, the chances are you fit somewhere way above the average of wealth on the planet. When you review the statistics, the question is why the poor are content in their criminal activity to take crumbs from the rich as there are vastly more poor people than rich people.

Credit Suisse’ 2013 Global Wealth Report observes:

“Our estimates for mid-2013 indicate that once debts have been subtracted, an adult requires just USD 4,000 in assets to be in the wealthiest half of world citizens. However, a person needs at least USD 75,000 to be a member of the top 10% of global wealth holders, and USD 753,000 to belong to the top 1%. Taken together, the bottom half of the global population own less than 1% of total wealth. In sharp contrast, the richest 10% hold 86% of the world’s wealth, and the top 1% alone account for 46% of global assets.”

At the upper end of wealth concentration a clearer picture emerges of the number of people who own staggering amounts of wealth:

“We estimate that there are now 31.4 million HNW adults with wealth between USD 1 million and USD 50 million, most of whom (28.1 million) lie in the USD 1–5 million range. This year (2013), for the first time, more than two million adults are worth between USD 5 million and 10 million, and more than one million have assets in the USD 10-50 million range.”

And the upper limits of wealth show the numbers of truly outstanding fortunes:

“Worldwide we estimate that there are 98,700 UHNW individuals, defined as those whose net worth exceeds USD 50 million. Of these, 33,900 are worth at least USD 100 million and 3,100 have assets above USD 500 million. North America dominates the regional rankings, with 48,000 UHNW residents (49%), while Europe has 24,800 individuals (25%), and 14,200 (14%) reside in Asia-Pacific countries, excluding China and India.”

With the proliferation of information and statistical analysis our notions of crime, criminals, wealth and power are undergoing a serious conversation.

Thomas Piketty’s Capital in the 21st Centuryhas installed a whole set of windows into the wall that the very rich have lived behind. In the United States, where statistics are now available and from multiple sources, we find that the top 10% has 76% of the national wealth, and the top 1% has 35% of that amount. The bottom 40% of the population has a negative wealth. As you can see from the chart below, that position is growing worse for the overwhelming number of Americans. I suspect there are statistical evidence showing the top 10% (with the top 1% having a big share of that percentage) of Thais have national wealth concentration at the same or levels exceeding the Americans.

Historically, the way to prevent revolt by people who have nothing has been repression or justification. That’s where the Sheriff of Nottingham has done his historical duty: he’s the enforcer for the 1%, and he’s enforcing laws that maintain the status and power of the 1%.

It’s a cozy arrangement (as least it used to be, but the arrangement has come under strains even in a society like Thailand where the rich and powerful and titled are now being challenged, unthinkable before – people, the likes of Billy, are fighting for their rights even to what little they have). It makes sense why the 1% wouldn’t want other sources of statistics about crime, especially their involvement in crime circulating among the bottom 90% of the population, who might have a question or two about the fairness or justice of such an allocation of wealth (and income also tracks a similar ratio).

Here’s a breakdown of how these percentages translate into the number of people within the population of a country:

USA population 310 million:

1%=3,100,000; .01%=310,000; .001%= 31,000

Thailand population 66 million:

1%= 660,000; .01%=66,000; .001%= 6,600

The lions share of increases of wealth and income since 1980, according to Piketty have accumulated to the benefit of those at the 1% and above level. This elite group has also experienced most rapid increase (enjoying most of the gains of wealth and income) at the expense of all other members of the population. Piketty also has found there is no noticeable difference in skills, training and education to account for the large difference in wealth and income from individuals who occupy the bottom 9% of the top 10% and those at the top 1% of the top 10%.

That is unfortunate for the top 1% because without a convincing story to justify a vastly larger piece of the wealth and income pie their continued good fortune becomes vulnerable as the forces of political change push for a new allocation. It makes their claims to superior abilities sound like classic Dunning-Kruger Effect arguments. The ultra-wealthy, one would have thought, would wish to distinguish themselves from the likes of Mr. McArthur Wheeler, the American banker robber who believed rubbing lemon juice on his face made him invisible.

What the PEW chart above doesn’t breakout is how much of that pie is taken by the top 1% and the top .01% and how much of that percentage flowed to those two groups. From Piketty’s research, it is a safe bet that it works out to more than 50% assigned to the 7%.

Now for the future: here are some possibilities (nothing is inevitable and many factors coming from technological changes may change everything)—the .01% is the real problem. This category is for people making an income of more than $1.5M a year. The further you go up this chain, the more concentrated and vast is the wealth and income. These are the people who hire lobbyists, who fund political campaigns, and use their wealth to preserve their status and power. In less developed countries, there are more incidents of outright brute force and legal intimidation as the political systems have shallow roots in a functioning democracy and powerful forces behind the scenes act together to operate a covert dictatorship.

What Thomas Piketty’s research has done is to provide a laser-like focus on this highly elite group—where they are, what they own, and what their presence means for everyone. The initial targets will likely be the super-managers of large American companies who make $11.5M a year in compensation. Great wealth has successfully hidden behind the super star actor, athlete or inventor who appears in the public spotlight. It is a good place to hide as at least a case can be made to justify their wealth based on a combination of skill, knowledge and talent. But the old inherited wealth, which remains a source of enormous power and influence, lacks that justification. It becomes more of a hard sell to the 99% to maintain that degree of inequality of wealth and income.

Future criminals will be able to find information that allows them to access these people and their assets. Kidnappings and abductions of people, their family members, and associates are likely to grow. Tracking down the off the book wealth the extremely wealthy own will also be another line of criminal activity; as there is already a convergence (this is why the sheriff keeps the records) between the ultra-wealthy and the high-level criminal organizations. We don’t really know how much business they do together. In the future, we will find out a lot more about that connection.

Leaving aside crimes of violence, crime for economic gain is largely conducted by the poor against the rich. That makes a great deal of sense as the rich write the laws to protect them from theft and kidnapping by the poor. So long as the wealth concentration is hidden, or if not hidden, at least justified, the imprisonment of poor people who seek ‘illegal’ means of redistribution (we call them criminals) has large-based support.

The stories we tell about the wealthy and their riches are effective to the extent the population has a consensus about social justice and fairness. A large inequality gap that continues to grow undermines that consensus. If highly concentrated wealth is thought back a plausible story to justify it, alternative stories begin to question the illegitimacy of the wealthiest. We are at that crisis point. Wealth is being viewed as a by-product of profoundly unfair economic system. The result is the old question of who are the criminals and who are to be protected from predation shifts as the spotlight moves from the poor to the ultra-rich.

I would also predict a boon in online wealth locaters. Individuals and organizations that specialize in isolating who owns what, where it is owned, the income generated, and its current market and book value. This information is inside ‘big data’ and it will be mined. The ultra-wealthy won’t much like this intrusion into their business and personal lives. In the stock market of the future, I’d invest heavily in companies with advanced surveillance technology. That might prove to be a winner as those who want a means to uncover the location and nature of wealth will be in an arms race against those who want to block out the windows that stare into their deepest bank vaults. Also security firms and technology companies will combine. They may experience a bullish period selling products and services such as highly trained SWAT teams, personalized armored vehicles, CCTV technology, computer security and drones to the .01% for protection.

The SWAT team works for a private person or family. They go through the streets of New York, Bangkok, London or Tokyo as if they were the head of state; and indeed, they are looking more and more like that level of powerful figure.

We are at a crossroads where economic slowdown, technological change, and big data are changing perceptions about concentration of wealth and income. The .01% have enjoyed a monopoly on telling the story that suits their interest, and they have anointed the story tellers and information gathers. It is tempting to say that world is about to end. The reality is the extreme inequality of wealth and income is the normal state of political, social and economic life in almost all places and times, especially since the industrial revolution. It isn’t some evil system that arose thirty years ago.

The test is whether new political institutions and legal systems will evolve policies to limit wealth and income concentrations accumulating at the 1% level. Over the next twenty years will the world’s wealth and income look more compressed like Denmark and less like the United States of America or Thailand? Alternatively, as the .01% won’t go into that night quietly, it is just as likely that the world becomes modeled on American inequality and Denmark is an old story like Robin Hood told to children who are innocent enough to believe the hero could defeat the Sheriff of Nottingham Forest. What Piketty’s Capital in the 21st Century has done is show that if you dig hard enough into the historical record you can find a great deal of information about how nature of wealth and income concentrations over time and how policies, wars, revolutions, and depressions have caused temporary compressions.

We’ve lived in a statistical dark age when it comes to wealth. We are waking up to the reality of what gross inequalities bring. Like a dentist peering into the mouth of an elderly patient who never owned a toothbrush, we aren’t quite certain what treatment is appropriate but we’re reasonably clear there is considerable work and at great expense to be done.

 

Posted: 4/24/2014 8:54:29 PM 

 

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