Capitalism's Achilles heel [electronic resource] : dirty money and how to renew the free-market system

I greatly enjoyed this piece! First, to address some of the book's lower reviews, I think if you are looking at this piece from the lens of someone interested in the micro-issues of Africa or other nations, or if you are someone who is more solutions-oriented in a micro sense, this book could be disappointing. However, if you are looking for a cogent macro-argument, this book is top notch. Baker does a very convincing job of connecting the way that Capitalism, when applied to states that lack effective regulatory systems (i.e. both legal infrastructure as well as actual capital regulatory structure) can result in rampant graft. He then connects this issue to a variety of social issues. The reason this is particularly important from a theoretical perspective is because the prevailing notion in society is that Capitalism solves everything. In fact, when poorly executed, it actually inspires graft and can lead to the transfer of value out of a nation, using a variety of means. This has a tremendously negative effect on a nation, the causal of which is the Capitalism that was implemented to "help". While one critic has suggested that the book speaks too much in generalities, I would mention that his commentary is actually quite the opposite. Relative to notions that poverty is the problem, he turns the argument upside down and demonstrates how poverty is the result. He also sets forth both a solution (the need for comprehensive international regulation from the top down), versus coming up with fringe and marginal changes that are questionably effective (i.e. pouring more money into the poverty issue). I think the critic comes from the fact that Baker does not see a "simple" solution. Instead he frames the solution in ALL it's complexity. This requires the reader recognize that many existing measures are moving in the opposite direction of the solution. He clearly shows, through examples of Korea and Africa, how addressing the money laundering/lack of regulation of money flows, could have played a positive role in changing social conditions. This is actually completely opposite the common discussion of economists who are more interested in ideas of equilibrium, without consideration for graft and power getting mixed into the equation of how equilibrium plays out. He ends in defense of capitalism. I would have preferred he end with some of the modified capitalism theories that are out there. However, I suspect he feared that people would think him a socialist if he didn't not explicitly come out in favor of capitalism. A great book full of examples, that I will be using for some of my academic work. Fantastic job!! With This Book, Raymond Baker Provides A Insider's Look At The Way Criminals, Terrorists, And Businesspeople Move Dirty Money Around The World, Impoverishing Billions And Corrupting Capitalism's Ideals Of Fair Play. In This Highly Readable Account, He Links Banking, Commerce, Law, Economics, And Philosophy With Passionate Advocacy Of Steps That Must Be Taken To Renew Capitalism's Mandate For The Spread Of Global Prosperity. For Over Forty Years In More Than Sixty Countries, Baker Has Witnessed The Free-market System Operating Illicitly And Corruptly, With Devastating Consequences For Scores Of Fragile Nations. Now, In Capitalism's Achilles Heel, Baker - The Internationally Respected Authority On Money Laundering, Corruption, And Development Issues - Takes You On A Fascinating Journey That Winds Its Way Across The Global Free-market System And Reveals How Dirty Money, Poverty, And Inequality Are Inextricably Intertwined. Can Anything Be Done? For Capitalism To Succeed On A Global Scale, We Must Fight Rampant Lawlessness, Reduce Inequality, And Recast The Free Market's Supporting Structures Around Principles Of Global Justice. Capitalism's Achilles Heel Provides A Place For Us To Start.--jacket. Global Capitalism : Aavior Or Predator? -- Pt. I. Illegality : We Like The Money -- Playing The Game -- The Dirty-money User Manual -- You're In Business -- Dirty Money At Work -- The Corruption Industry -- The Criminal Component : Drugs, Thugs, And Terrorists -- Global Commerce And Tax Evasion : Coin Of The Realm -- Magnitudes And Misunderstandings -- How Much Money? -- A Failure Rate Of 99.9 Percent -- Well-intentioned Efforts -- The Patriot Act -- Dirty Money Is On The Rise -- Chasing Terrorists' Money -- Ill-intentioned Loopholes -- Haven And Secrecy Structure -- Falsified Pricing Structure -- We Like The Money -- Challenge -- Pt. Ii. Inequality : The Gap Matters -- The Global Divide-- The Quintile Canyon -- Measure For Measure -- It's An Uncertain World -- The Monkey Wrench -- I Don't Understand And Don't Tell Anyone -- Myths -- Don't Tell Anyone -- Corruption-at Long Last! -- Filling Western Coffers : Mum's The Word -- Debtor's Prison -- What If? --^ Intellectual Gap Or Character Gap? -- It's The 70 To 90 Percent That Matters -- It Can't Last -- Convergence? -- The Gap Matters -- Challenge -- Pt. Iii. Disutility : Bentham Kos Smith -- The Anguish Of Adam Smith -- Theory Of Moral Sentiments -- Wealth Of Nations -- Invisible Hand -- Das Adam Smith Problem -- The Tears Of Adam Smith -- The Joys Of Jeremy Bentham -- Jurisprudence -- Utilitarianism -- Related Interests -- John Stuart Mill -- Problems -- Philosophy Becomes Culture -- The Great Infusion -- Twentieth-century Utility -- Twentieth-century Utilitarianism -- Inoperable Doctrine, Deadly Practice -- Disutility -- Challenge -- Pt. Iv. Run It Right : Trust The System -- Capitalism's Achilles Heel -- Spreading Prosperity -- Delegitimizing Dirty Money -- Tougher On Corruption -- Reining In The Support Structure -- Mispricing And Transfer Pricing -- Capitalism's Contribution To Slashing Inequality -- . . . When You Pay Me What You Owe Me -- Reconstitute The World Bank --^ Justice First -- Renewing Capitalism. Raymond W. Baker. Includes Bibliographical References (p. 383-423) And Index. CAPITALISM’S ACHILLES HEEL 5 CONTENTS 9 PROLOGUE 13 Chapter 1: GLOBAL CAPITALISM: SAVIOR OR PREDATOR? 23 Chapter 2: PLAYING THE GAME 35 THE DIRTY-MONEY USER MANUAL 36 YOU’RE IN BUSINESS 59 Chapter 3: DIRTY MONEY AT WORK 60 THE CORRUPTION INDUSTRY 61 THE CRIMINAL COMPONENT: DRUGS, THUGS, AND TERRORISTS 100 GLOBAL COMMERCE AND TAX EVASION: COIN OF THE REALM 145 Chapter 4: MAGNITUDES AND MISUNDERSTANDINGS 174 HOW MUCH MONEY? 174 A FAILURE RATE OF 99.9 PERCENT 185 WELL-INTENTIONED EFFORTS 186 THE PATRIOT ACT 189 DIRTY MONEY IS ON THE RISE 194 CHASING TERRORISTS’ MONEY 195 ILL-INTENTIONED LOOPHOLES 198 HAVEN AND SECRECY STRUCTURE 203 FALSIFIED PRICING STRUCTURE 206 WE LIKE THE MONEY 213 CHALLENGE 217 Chapter 5: THE GLOBAL DIVIDE 222 THE QUINTILE CANYON 222 IT’S AN UNCERTAIN WORLD 236 THE MONKEY WRENCH 246 Chapter 6: “I DON’T UNDERSTAND” AND “ DON’T TELL ANYONE” 252 MYTHS 253 “DON’T TELL ANYONE” 258 CORRUPTION — AT LONG LAST! 261 FILLING WESTERN COFFERS: MUM’S THE WORD 264 DEBTOR’S PRISON 266 WHAT IF? 269 INTELLECTUAL GAP OR CHARACTER GAP? 270 Chapter 7: IT’ S THE 70 TO 90 PERCENT THAT MATTERS 274 IT CAN’T LAST 274 CONVERGENCE? 279 THE GAP MATTERS 284 CHALLENGE 287 Chapter 8: THE ANGUISH OF ADAM SMITH 294 INVISIBLE HAND 302 DAS ADAM SMITH PROBLEM 305 THE TEARS OF ADAM SMITH 309 Chapter 9: THE JOYS OF JEREMY BENTHAM 312 JURISPRUDENCE 313 UTILITARIANISM 314 RELATED INTERESTS 317 JOHN STUART MILL 319 PROBLEMS 321 Chapter 10: PHILOSOPHY BECOMES CULTURE 324 THE GREAT INFUSION 325 TWENTIETH-CENTURY UTILITY 331 TWENTIETH-CENTURY UTILITARIANISM 333 INOPERABLE DOCTRINE, DEADLY PRACTICE 335 DISUTILITY 339 CHALLENGE 342 Chapter 11: CAPITALISM’S ACHILLES HEEL 349 Chapter 12: SPREADING PROSPERITY 354 DELEGITIMIZING DIRTY MONEY 354 TOUGHER ON CORRUPTION 358 REINING IN THE SUPPORT STRUCTURE 358 MISPRICING AND TRANSFER PRICING 360 CAPITALISM’S CONTRIBUTION TO SLASHING INEQUALITY 363 “. . . WHEN YOU PAY ME WHAT YOU OWE ME” 365 RECONSTITUTE THE WORLD BANK 372 JUSTICE FIRST 373 Chapter 13: RENEWING CAPITALISM 380 ACKNOWLEDGMENTS 389 Notes 395 INDEX 437 Praise for Capitalism's Achilles Heel - "The corrosive effects of bribery, money laundering, tax evasion, and fraudulent transfer pricing need to be analyzed and explained. Raymond Baker, a pioneer in this research, shows how illicit funds move through world financial systems and lead to increased corruption, poor distribution of resources, and damage to the rule of law. I hope his passion for the subject will inspire others to delve into the legal, economic, and social consequences of dirty money and what must be done to stop it."--Senator Carl Levin, (D-Michigan), Ranking Member, Permanent Subcommittee on Investigations. "In today's world, expanded trade relationships and rapid advances in communication technology foster opportunities for greater political freedom, economic growth, and higher living standards around the world. These developments also create new vulnerabilities for the international financial system. This book takes a look at these challenges head on and makes an important contribution to the public debate."--Senator Charles Grassley, (R-Iowa), Chairman, Senate Finance Committee

For over forty years in more than sixty countries, Raymond Baker has witnessed the free-market system operating illicitly and corruptly, with devastating consequences. In Capitalism's Achilles Heel, Baker takes readers on a fascinating journey through the global free-market system and reveals how dirty money, poverty, and inequality are inextricably intertwined. Readers will discover how small illicit transactions lead to massive illegalities and how staggering global income disparities are worsened by the illegalities that permeate international capitalism. Drawing on his experiences, Baker shows how Western banks and businesses use secret transactions and ignore laws while handling some $1 trillion in illicit proceeds each year. He also illustrates how businesspeople, criminals, and kleptocrats perfect the same techniques to shift funds and how these tactics negatively affect individuals, institutions, and countries.