Loretta Napoleoni: The intricate economics of terrorism

Understanding Terrorism's Impact on Daily Life

In this section, the speaker shares a personal experience of being asked to interview members of the Red Brigades, a Marxist terrorist organization in Italy. This experience leads to an exploration of how terrorism interacts with our daily lives.

Interviewing the Red Brigades

• The Red Brigades was a terrorist organization active in Italy from the 1960s until the mid-1980s.

• The speaker was asked to interview them, despite their refusal to speak with anyone else.

• The invitation came from a childhood friend who had joined the Red Brigades and became a leader.

• Curiosity about what turned her friend into a terrorist and why she never recruited the speaker led to accepting the invitation.

Discovering Motivations and Economics

• The speaker quickly realized that they failed the psychological profiling of a terrorist due to being too single-minded and opinionated.

• The Red Brigades believed violence was necessary to unblock Italy's "blocked democracy."

• It became evident that terrorism is ruled by economics rather than politics or ideology.

• Terrorist organizations constantly search for cash as terrorism is an expensive business.

Linking Terrorism and Economics

• There is a parallel economic system created by arms organizations since World War II.

• This system has followed the evolution of Western capitalism through three stages: state sponsorship, privatization, and globalization of terrorism.

• State sponsorship involved superpowers funding arms organizations during the Cold War.

• Privatization occurred when some groups gained independence from sponsors and started funding themselves through legal and illegal activities.

Investigating the Economics of Terrorism

In this section, the speaker discusses their decision to investigate the economics of terrorism despite facing challenges in securing funding. They share their findings on how terrorism operates as a business.

Self-Funding Research

• The speaker faced difficulties in securing funding for their research on the economics of terrorism.

• They decided to sell their company and fund the research themselves.

• This decision changed their life and allowed them to uncover a parallel economic system created by arms organizations.

Parallel Economic System

• The parallel economic system created by arms organizations runs alongside our own international economic system.

• It has followed the same stages of evolution as Western capitalism: state sponsorship, privatization, and globalization of terrorism.

State Sponsorship and Privatization of Terrorism

In this section, the speaker explains the concepts of state sponsorship and privatization of terrorism. They provide examples to illustrate how these stages have shaped terrorist activities.

State Sponsorship

• During the Cold War, superpowers funded arms organizations as part of proxy wars.

• Legal and illegal activities were used to establish links between crime and terror.

• An example is the Contras in Nicaragua, created by the CIA but funded both legally and illegally.

Privatization of Terrorism

• In the late 1970s and early 1980s, some groups gained independence from sponsors and started funding themselves.

• A mix of legal and illegal activities continued to sustain these groups.

The transcript continues with further insights into globalization of terrorism. However, due to limitations on sections length, it will be covered in a separate section.

The Impact of Globalization and Deregulation

This section discusses how globalization and deregulation have allowed arms organizations to link up financially with each other and engage in serious business with the world of crime. It also introduces the birth of the transnational arms organization Al Qaeda.

Globalization and Arms Organizations

• Globalization and deregulation enabled arms organizations to connect financially and engage in criminal activities together.

• The transnational arms organization Al Qaeda emerged during this time, capable of raising money across borders and carrying out attacks in multiple countries.

Rogue Economics

• Rogue economics is a force that emerges during times of great transformation, such as globalization. It occurs when politics loses control over the economy, allowing it to become a rogue force working against society.

• Throughout history, rogue economics has occurred during significant events like the fall of the Roman Empire, Industrial Revolution, and the fall of the Berlin Wall.

Size of Illegal Economy

• Before 9/11, the international economic system composed of crime, terror, and illegal economy was estimated to be around 1.5 trillion dollars, which is twice the GDP of the United Kingdom.

Money Laundering and its Impact on US Economy

This section explores how money laundering played a significant role in injecting cash into the US economy before 9/11. It also highlights how a growing number of dollars were leaving the United States since the late 1960s.

Money Flow into US Economy

• Prior to 9/11, most money from crime, terror, and illegal activities flowed into the US economy due to money laundering taking place within offshore facilities.

• Offshore facilities served as the entry point for this cash injection into the US economy.

Money Leaving the United States

• Since the late 1960s, a growing number of dollars were leaving the United States and never returning. Criminals and money launderers took out large sums of cash to fund the growth of illegal economies and terrorism.

US as Reserve Currency

• The United States being the reserve currency of the world allowed it to borrow against the total amount of dollars in circulation globally, a privilege known as seigniorage.

• Other countries, like the United Kingdom, can only borrow against the amount of money in circulation within their own borders.

• In the 1990s, the US was borrowing against the growth of terror, illegal activities, and criminal economy.

The Impact of Patriot Act on Money Laundering

This section discusses how George Bush's War on Terror and introduction of the Patriot Act changed money laundering dynamics by prohibiting certain financial transactions with offshore facilities.

Introduction of Patriot Act

• After 9/11, George Bush launched the War on Terror, which included introducing legislation called the Patriot Act.

• The Patriot Act greatly reduced American liberties to protect against terrorism and included an anti-money-laundering section that prohibited certain financial transactions with offshore facilities.

Reaction from International Finance

• International finance and banking reacted strongly to these regulations by advising clients to move their activities away from US dollars and invest elsewhere.

• Europe became a hub for money laundering activities due to its lack of similar legislation introduced in Europe compared to unilateral actions taken by the US through the Patriot Act.

Relationship between Crime, Terror, and Money Laundering

• The close relationship between crime, terror, and money laundering is evident in how these activities shifted from the United States to Europe following the introduction of the Patriot Act.

Questioning Narratives and Understanding the Dark Side

This section emphasizes the importance of questioning narratives and understanding that there is a world beyond what is presented in headlines. It encourages individuals to explore different perspectives.

Importance of Questioning

• It is crucial to question everything that is told, including the information presented in this talk.

• By questioning narratives, individuals can gain a deeper understanding of the dark side and broaden their perspective on various issues.