Tom Burgis’s 2020 book, subtitled “How Dirty Money Is Conquering the World,” provides interesting and scary insights into a world where money and power are abused. Kleptopia is not a place, but a community of corrupt politicians, fast-buck “businessmen,” and the many professionals — lawyers, lobbyists and marketeers — who help them rob the poor. It is an excellent follow-on to Glenny’s 2008 McMafia.
The key to understanding the dynamics of kleptopia is that it is ok to over-pay professionals, kill the curious and persistent, and lie about one’s work and plans while in the process of stealing $billions from citizens. Since the goal is turning other people’s [stolen] money into your own [clean] money, it is ok to lose 90 percent on the way. After all, 90 percent of someone else’s $1 billion is still go enough to take you from $0 to $100 million!
The book is full of examples of crooks in poor countries (Zimbabwe, Kazakstan) working with fixers from rich countries (UK, US) to rob elections, rig markets, and punish opponents everywhere. When did this “business” get big and bad? After the end of the Cold War, when crimes against citizens would no longer be tolerated by US or Soviet allies. The corrupt needed an updated business model and there were many “consultants” ready to provide it.
Ex-Soviet states are featured in the book. Kazakstan’s Nazarbayev insisted on loyalty as he stole billions. Russia’s KGB (where Putin got his start) was very efficient at converting Soviet assets into power and wealth (at least $50 billion) for its members:
“Yeltsin would recall… ‘A country can’t be rich if it has no rich people in it. There is no real human independence without private property. But money, big money (which is actually a relative concept) is always, under any circumstances, a seduction, a test of morals, a temptation to sin . . . In order to cross that ethical line, in order to run that red stoplight, under Russian conditions you don’t necessarily have to peddle pornography, sell drugs, or deal in contraband cheap goods. Why fool around with such nickel-and-dime stuff? It’s easier to buy one government official after another” p 170.
There is no rule of law in Kleptopia, only delays, oversights and “interpretations” that make no sense to outsiders — until you understand that the goal is robbery, often accompanied by violence.
Tony Blair is one such person. Here’s the advice he gave to Nazarbayev on how to spin a massacre of his citizens (protesting the loss of their jobs due to their company being stripped of assets by Nazarbayev’s allies) in the city of Zhanaozen:
“Dear Mr President… I think it best to meet head on the Zhanaozen issue. The fact is you have made changes following it; but in any event these events, tragic though they were, should not obscure the enormous progress that Kazakhstan has made. Dealing with it in the way I suggest, is the best way for the Western media. It will also serve as a quote that can be used in future setting out the basic case for Kazakhstan.”
Some draft passages followed. ‘I love my country . . . essential religious tolerance . . . strong ally of the coalition . . . progress and openness . . .’ Then a little false modesty: ‘But as the tragic events of Zhanaozen last December showed, there is much for Kazakhstan still to do . . . I understand and hear what our critics say. However, I would simply say this to them: by all means make your points and I assure you we’re listening. But give us credit for the huge change of a positive nature we have brought about in our country over these twenty years . . .’ Move on to a catalogue of reforms under way, then build to the climax[…]” — p 255.
Blair was paid $13 million per year for such advice — around $1 million per massacred protestor.
Why is real estate so expensive in London, New York and Dubai? Buyers are not looking for value; they want to launder dirty money into clean real estate. They don’t care if the price is outrageous; they don’t even live in the properties. That’s why they pay — and sellers are happy — to accept cash. The same is true about investors into poorly performing hedge funds: annual returns are irrelevant if the main goal is cleaning the principal.
“Before mass leaders seize the power to fit reality to their lies, their propaganda is marked by its extreme contempt for facts as such, for in their opinion fact depends entirely on the power of man who can fabricate it.” — Hannah Arendt, The Origins of Totalitarianism
Fake news, loyal media, and outright lies are the language of Kleptopia. We can see it in the speeches of Putin and other (would be) dictators, but we can also see it in Trump’s words. Why? Because he’s been laundering money for decades via various “Trump projects.” Does it matter that they go bankrupt or fall in value? Not if the backers are able to turn $100 of dirty money into $50 of clean assets. Indeed, casinos (another failed Trump endeavor) are often used as places to launder cash, with the house getting a cut.
Corruption is always and everywhere a drag on prosperity, cooperation and human flourishing. It’s also a reason for mass death and suffering:
“Putin and his brother dictators in the other ex-Soviet republics wanted to use control of natural resources to magnify their influence abroad, be it by shaking down BP, listing mining companies in London or turning off gas supplies to Ukraine whenever its leaders leaned overly Westward. At the same time, their primary mission was to divert money from the collective to themselves. If you could figure out a business deal that would achieve both ends at once, there were fortunes to be made” p 352.
Although I am glad to see the Ukrainians resisting Putin’s invasion, it’s also sad that westerners (Blair, Trump and thousands of white collar “facilitators”) have helped kleptocrats, oligarchs and dictators beat and rob their people through lobbying, privacy laws, shell corporations and the like (the invasion has put these “under review” in the UK, but I’ll wait to see what laws actually change).
Are all westerners so eager to help the thieves? No, but those who do oppose them are
killed “suicided,” fired, and hounded by police and prosecutors defending the flows of money. (The Swiss have gone after more than one banker for “breach of secrecy” aka, exposing money laundering.)
Remember that this book was released in 2020, so today’s headlines (Russia pivoting to China; Trump claiming Putin is “a genius”) are not accidents:
“Trump was helping to construct a new global alliance suited to the times. It was an alliance of kleptocrats. Like the court of Nazarbayev, they might at times seem like rivals, even enemies. In truth they were united in their common resolve to advance the privatisation of power. And what progress they had made. With Trump’s election, they controlled the three great poles of power. In the White House, a launderer, installed with the help of Putin’s Kremlin. And in Beijing, Xi Jinping. They had prime access respectively to the great repositories of plunder: the world’s biggest economy, the riches of the former Soviet Union, the one-party state containing a fifth of humanity” — p501
Are Xi’s hands clean? Not at all. He, like Putin, used “anti-corruption” to attack his enemies and hide his own crimes. Stay tuned for more, as Xi officially declares himself “leader for life.” It’s only a matter of time before corruption overwhelms all other decisions and facts.
My one-handed conclusion is that many thieves in “poor” countries have been aided and abetted by helpers in rich countries. If we’re going to stop corruption abroad, then we need to start at home. I give this book FIVE STARS.