Misha Glenny at TEDGlobal 2009, Session 8: July 23, 2009, in Oxford, UK. Credit: TED / James Duncan Davidson

Journalist and underworld investigator Misha Glenny starts by addressing the financial crisis. “These are grim economic times, so I want to cheer you up with one of the greatest commercial success stories of the last 20 years,” he says. What is it? Organized crime. Criminal activity now accounts for over 15 percent of the world’s GDP, Glenny explains. In the last two decades, it has experienced massive growth.

He begins to tell the story his life investigating organized crime. First, there was collapse of communism and, at the time he had been smuggling books across the Iron Curtain. He started writing about what was going on around him and eventually became the BBC ‘s chief correspondent. He was ecstatic but also worried about the some of the things lurking behind the wall. Glenny explains that it took him a little while to understand that some of the people who wielded power before, continued to do so.

He points to the slide behind him of a weightlifter in his prime. He explains that these men used to win gold Olympic medals and were great celebrities. Then he shows another slide of large men with heavy gold chains around their necks. These are the same guys after their 1989 makeover, he says. When communism collapsed it was also the state that collapsed. So how did a business man make sure his deals would be honored? Privatized law enforcement, Glenny says, otherwise known as mafia.The weightlifters now became a big part of that. In Bulgaria, they were soon joined by 14,000 ex-members of the armed forces — people trained for smuggling, building underground networks and killing people, with no jobs. Glenny realized that the same people organizing paramilitaries were the same people that were operating organized crime.

This is when he decided to travel around the world, talking to policeman, consumers of illicit drugs and particularly the criminals themselves. The Balkans was a good place to start. As they say in reals estate, he declares, it was location, location, location. It was a vast transit zone for illicit goods and services, most of which were heading to the European Union, which was now the most affluent consumer market in history. A significant minority enjoyed spending their spare cash on sleeping with prostitutes, doing cocaine and other illicit pastimes.

Glenny explains that even in the criminal world there are zones of production, distribution and consumption. The production and distribution tend to lie in the developing world and are often threatened by appalling violence and bloodshed. He points to Mexico and to the Democratic Republic of Congo where five million people have died since 1998. Mafias around the world cooperate with the local paramilitaries to seize supplies of coltan. The Western desire to consume is the primary drive of organized crime.

Glenny shows a video of a speedboat smuggling in cigarettes to the European Union. The boat is worth one million euros, he says, and there are about 20 of these boats smuggling at any time. The Italian police have only two boats that can go at the same speed. Sometimes, the smugglers bring women with them to be trafficked for prostitution and hurl them into the sea so that the police are forced to save them and stop chasing the boat.

Globalization has led to liberalization of international financial markets. Markets around the world are competing for criminals’ trade, Glenny says. There a lot of licit bands that are happy to accept their money, no questions asked, but offshore banking is at the center of it. At last, he says, there is someone in the White House who has consistently spoken out. Now, he says, let’s take a look at Bernie Madoff. He stole $65 billion. He is the Olympus of gangsters but he did this for decades in the heart of Wall street. So how many Madoffs are there? Quite a few.

Then, Glenny shows marijuana farm photos in British Columbia. This is one of tens of thousands of mom and pop grow ups. He shows photographs of regularly confiscated goods in the trade: — a speed boat and a helicopter. By the polices’ admission confiscating these goods does not make a dent in the profits. The global narcotics market has expanded enormously, but there has been no concomitant increase in the resources afforded to police forces.Canada has become a key area for the production of ecstasy and other synthetically produced drugs. That’s a game changer, he notes. Production has shifted into the Western world. The trend has been set to overwhelm our policing.

Organized crime has also already adapted very well to the recession. Glenny says he’s not surprised as it is the most adaptable business in the world. It has shifted operations, as people not are not smoking as much dope or sleeping with as many prostitutes, and shifted to financial centers through cyber crime. Now he shows photographs of a Pringles can rigged to pick up some sort of signal and hooked up to a laptop. He says he watched a cyber criminal use this can-laptop rigging to penetrate the security system of a major Brazilian band in 5 minutes.

Glenny points out that it’s easy to persuade people to do things with their computers that are not in their interest — viruses. He shares the example of the “I love you” virus. He got it from an ex-girlfriend who hated him so he knew it wasn’t real. The Internet is even assisting malarial mosquitoes. There are drugs that can destroy malaria, but the malarial parasite is developing resistance because cheap drugs bought over the internet have only low doses of the active ingredient.

Organized crimes affects us all — our bank accounts, our pension funds, the foods that we eat and our governments, Glenny concludes It’s a major economic force and we need to take it very very seriously.