Question: Wouldn't Organized Crime just go right on using the currencies of other nations?
Answer: I am confident that they will certainly try. So let's imagine that we are
a criminal organization. Our product is something that we need to sell to
a mass market. This is not something that we can pursue successfully unless
we can sell to a large number of people. So which of the various products
currently available from organized crime shall we use? I am going to use gambling
which is legal in several states in various forms and which is considered
by most people to be a minor crime.
Our criminal organization
has a long list of clients
who bet with us on all sorts
of events. We would like to
keep them betting. What can
we collect from them when they
lose? They have no foreign
currency. They have, in a few
cases, some U.S. currency but
the accounts computers do not
recognize that as money.
We can keep books on their
bets. When they gamble with
us we can keep a record of
their wins and losses. But
how do we settle those debts?
How do we collect? If they
have some of the non-POM in
their accounts, they are physically
unable to transfer that money
to us. Perhaps we could have
them buy luxuries and give
them to us. Jewelry has a value
which we can convert to money
in other nations who still
use POM. But the jewelry they
buy will belong to them. In
order for us to own that jewelry,
we will have to require that
they transfer ownership of
it to us, or some one of us.
That provides a trail that
links us to the bettor. If
they do not transfer ownership,
then we are in possession of
presumably stolen property.
Also, to make it worthwhile,
we will have to wait until
the bettor has run up a considerable
debt before settling up.
But we might be able to struggle
through doing business with
only the more wealthy of our
clients. Only, why would they
gamble with us? What could
we give them if they won? We
could not give them the non-POM
so we would have to give them
some foreign currency. (We
will leave aside the problem
of what that currency would
be worth as POMs change in
value over time.) But they
could hardly spend that without
leaving the country. So the
foreign currency would not
be very attractive. This would
cost us more customers.
But we still have a few wealthy,
jet-set types who like to gamble
and who travel abroad frequently
enough to want the currency
of other nations. Will that
be enough? Perhaps, but there
are more problems to face.
We have a bureaucracy which
does the accounting and the
strong arm work. How do we
pay them? They aren't jet setters.
They really won't want traceable
jewelry or other goods. They
want to be paid in money they
can spend. If they are arrested
by the police, how do we bribe
the police or the criminal
justice system? How do we get
them a good lawyer? Unless
we can pay them, what hold
do we have on them? Why would
they keep working for the organization
if they can get more money
in other ways without the risk
of arrest and imprisonment?
(Not to mention maiming and/or
death)
But we have another problem,
perhaps the greatest problem
of all. We can't run a mass-marketing
business without lots of people
knowing about
us. That means that any of
them can report us to the authorities.
They would be paid for doing
so. All it takes is a few upset,
money-hungry, losing bettors
to identify and convict members
of the organization. That is,
if anyone really cares. (Gambling
cannot destroy lives and families
in a non-POM economy.)
Other organized crime products
such as drugs and prostitution
also become quite unprofitable
and the organization becomes
unmanageable. Why would a prostitute
need a pimp? Why would a woman
need to turn to prostitution?
How can you be paid? How do
you pay the criminal bureaucracy?
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