Relationship between economic and organized crime in modern society

In conditions of general interconnectedness, free movement of people, goods, and capital, there has been evolution not only in general social development but also in the execution of numerous illegal activities such as those falling under organized and economic crime, terrorism, etc. The process of globalization and the associated rapid growth and development of information and communication technologies have enabled the exchange of ideas and knowledge worldwide at an incredible pace.

Organized crime and the related economic crime are the focus of interest for all modern well-organized states. In addition to the states themselves, international (regional and global) organizations and institutions also deal with the issues of these two types of crime. Economic crime, as the name suggests, has evolved with the development of the economy and business, both at the national and supranational levels, alongside the expansive development of information and communication technologies. It can be said that the relationship between these two types of crime is directly proportional, meaning the development of organized crime follows the development of economic crime, and vice versa.

In addition to the introduction and conclusion, the paper consists of three interconnected and interdependent parts. The first part presents the philosophy of organized crime. It highlights the problems of defining, the lack of a unique definition, and the multidisciplinarity of the concept of organized crime. Additionally, it presents the most significant characteristics and manifestations of organized crime in theory and practice. The second part covers the issues of economic crime. Similar to the first part, the second part addresses the process of determining and defining the concept of economic crime, presenting its basic characteristics and types in contemporary conditions. The third part of the work presents the relationship between these two types of crime. Additionally, in the final part of the work, it also addresses the consequences that economic and organized crime have on the state and society.

2.    Criminological overview of the concept, characteristics, and divisions of organized crime

Legal, as well as related criminalistic and criminological, and other related scientific disciplines, do not have a unified opinion on the concept and definition of organized crime. However, theoreticians from these scientific disciplines generally agree that organized crime began to evolve with the development of modern states. At the current level of societal development, organized crime is the subject of consideration for an increasingly broad range of scientific disciplines. In addition to legal, criminalistic, and criminological science and practice, organized crime is increasingly gaining importance in economics, sociology, political sciences, and security sciences.

One of the most influential and cited foreign theoreticians dealing with organized crime is Howard Abadinsky. Abadinsky (2010) views organized crime as “a non-ideological association, existing among a certain number of closely connected individuals who are hierarchically organized” (p. 2).

Mijalkovski (2010) defines organized crime as “groups that execute systematic and persistent criminal attacks in various spheres of socio-economic life, through which certain organized groups of criminal delinquents, as well as members of criminal organizations, closely linked at a hierarchical level with divided roles that are unconditionally respected, achieve high criminal profits through ruthless and highly professional delinquent tactics and techniques” (p. 118).

Bjelajac (2015) regards organized crime as “the activity of criminal groups or organizations whose goal is the illegal conduct of business or the commission of criminal offenses for profit or dominance in specific areas of social life” (p. 70).

the state’s inability to reconcile supply and demand in times of economic crisis” (Matijašević, 2008, p. 88) are some of the reasons for the wide maneuvering space for certain forms of organized crime.

Among theorists, there is no unanimous opinion on the classification and types of organized crime. In this context, Ignjatović (1998) lists the following manifestations: “extortion, gambling, drug trafficking, usury, disposal of hazardous materials, other illegal activities such as cigarette smuggling, pirated reproduction of copyrighted works, theft, robbery, prostitution, pornography, as well as corruption, money laundering, false bankruptcies, and insurance fraud” (pp. 69–87). Furthermore, Božić and colleagues (2017) adopt Bošković’s classification, according to which, acts of organized crime include terrorism, corruption, money laundering, the trafficking of drugs, and other dangerous goods, illegal trafficking of children, people, and human organs (p. 278). At this point, it is worth noting another classification. Jašarević (2013) divides all forms of organized crime into basic and other forms. He lists as basic forms: “drug trafficking, terrorism, corruption, money laundering, human trafficking, extortion or modified form of blackmail, cybercrime, arms and nuclear material trafficking,” while he classifies as other forms: “vehicle smuggling, cigarette and tobacco product smuggling, oil and petroleum derivatives smuggling, trade in cultural goods, war loot trading, trade in rare plants and animals, environmental crime, maritime piracy, organized illegal gambling, prostitution, etc.” (pp. 190–224).

3.    The criminology view of the concept, characteristics, and significance of economic crime

Similar to the theoretical determination of organized crime, there isn’t a single opinion or stance on the definition of economic crime. Depending on the perspective from which it is observed and analyzed, various authors from different scientific disciplines have provided their views on the concept of economic crime. The phenomenon of economic crime, in many ways, is similar to other types of crime, especially organized crime and some forms of modern crime such as cybercrime, which further complicates its issues.

Edwin Sutherland is one of the most cited authors in the context of economic crime. This American criminologist used the term “white-collar crime” in studying economic crime. Through this term, Sutherland defined crime that occurs in the field of business as follows – “manifested forms are most often manipulations related to the buying and selling of various stocks, false advertising of goods, false representation of the financial status and operations of certain corporations, bribing business partners, direct or indirect bribery of officials to secure favorable business arrangements, embezzlement, misappropriation of funds, tax evasion, and similar acts” (Radojičić, 2013, p. 332). While dealing with the issue of economic crime, Sutherland was among the first to refute the established belief that only the poor social strata engage in crime.

The lack of a unified definition of economic crime is also contributed to by “the differences in political and economic systems worldwide, as well as the fact that economic crime encompasses various types of criminal offenses, both those against the economy and those against official duties, and partly offenses against property” (Banović, 2002, p. 13). Bošković (2006) views economic crime as criminal offenses directed against the economy, that is, “criminal offenses relating to abuses and other forms of unlawfulness within the economic system and financial operations. From a criminological perspective, economic crime, in addition to criminal offenses, includes economic misdemeanors and violations, as well as acts directed towards material goods, i.e., all other forms of property offenses” (pp. 337–338).

One particularly important point is that different terms and definitions are used for the same or similar unauthorized activities. Thus, alongside the concept of economic crime, terms such as commercial crime, business crime, market crime, corporate crime, etc., appear in theory and practice.

Taking into account the aforementioned definitions and practice in the legal-criminalistic context, the basic features of economic crime can be identified. The main characteristics of economic crime “include the following: concealment, dynamism (variability of manifestations), specialization and professionalization of perpetrators, specificity of evidence and means of proof, and specialization in combating economic crime” (Đukić, 2017, p. 144).

In addition to these, there are other characteristics of economic crime. In this context, they should be supplemented: by a diversity of manifestations, prevalence and international character, motive of greed, unethical behavior, etc. Economic crime is manifested through its various forms that depend on the area in which criminal activities are carried out.

Just as there is diversity in defining the concept of economic crime, there are also different classifications of its manifestations in legal theory.

Mićo Bošković has classified all forms of economic crime into 12 groups, noting that they are characteristic not only of the situation in the sphere of economic crime specific to the Republic of Serbia, but also for all countries worldwide. These are the types of economic crime presented in the following table:

Table 1. Manifestations of Economic Crime

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4.    Relationship between Economic Crime and Organized Crime in Modern Society

Taking into account the previously presented definitions, characteristics, as well as forms of organized and economic crime, it is possible to recognize and indicate the interconnectedness of these types of criminality. Considering the mode of organization (as a group, gang, organization, association, etc.), internal structure (in terms of hierarchy, discipline, code of silence, etc.), goals that often have a profit-driven but also political character, methods of operation, and the level and quality of established connections (between members of organized criminal groups and authorities at various levels, political parties, economic and financial institutions, and organizations), certain manifestations of criminal activity can be classified as both economic and organized crime.

From a criminological perspective, clear connections between organized and economic crime are evident. A large number of authors agree that economic crime is actually a distinct form of organized crime. Thus, Šikman (2010) views economic crime “as a narrower concept of organized crime, and certain forms of economic crime can be subsumed under the activities of organized crime if these forms of criminality contain all the elements that characterize organized crime” (p. 80).

Economic crime can be viewed in two ways. It can be manifested as a form of criminal activity within organized crime. However, it can also be executed in a manner that does not possess elements of organized crime.

Areas where organized criminal activity is most present within the sphere of economic and financial operations include banking, stock trading, insurance, wholesale trade, etc. According to Carić and Matijašević Obradović (2017), “perpetrators of economic crime in the mentioned and similar areas of economic and financial operations are businessmen, which makes it invisible and diminishes its significance and danger, as they endeavor to organize criminal activities through careful planning of illegalities, involving other individuals, exerting necessary influence, all with the intention to increase profit or unlawfully gain financial benefits” (p. 57).

The functioning and conduct of activities by organized criminal groups in the economic sphere can have drastic consequences not only in the field of the economy or its sectors but also in the overall functioning of the entire state. Disrupted economic conditions within a state pose a significant threat to its national security.

Especially concerning the context of compromising national security due to the mutual relationship between economic and organized crime and the functioning of criminal groups, one should not disregard activities that diminish the sense of security among citizens in society, as well as the operations of business entities in the contemporary business environment.

5.    Conclusion

By analyzing the facts and perspectives presented in the study, one can form a general stance on organized and economic crime in contemporary living and working conditions. With the overall development of society, the diversification of national economies, the process of regional and broader international integration–i.e., globalization–destructive social phenomena have also evolved. Organized crime achieved its rapid “development” in rapidly growing industrialized countries over the past two centuries. States undergoing property and social transformation have only contributed to the further development of organized criminal activities.

Regarding organized crime, significant attention has been devoted to this issue over the last 50 years. Due to the substantial interest and the impact organized crime has on society as a whole, numerous theorists have provided their definitions of this concept. Apart from legal and criminological theories, there exist a considerable number of definitions and recommendations for defining this concept due to significant societal losses on a normative level.

Similar to the issue of organized crime, the problem of economic crime faces the absence of a unified definition and approach.

The recommendation that arises concerning both organized and economic crime is that there must be a dual perspective on both types of criminality, considering them in both narrow and broader contexts. Both types of crime deal with highly complex phenomena subject to daily influences from various social spheres.

It’s challenging to differentiate and classify various criminal offenses into a single type of criminal activity (completely separate from another type of criminal activity) because many criminal offenses simultaneously belong to both economic and organized forms of criminal activity. Generally speaking, delineating boundaries between specific types of crime is highly difficult; hence, some theorists use the term “contemporary crime.” This type of crime exhibits characteristics of both economic and organized crime.

Considering them as two distinct types of crime, economic and organized crime are to a large extent interdependent and interconnected. A small number of criminal offenses in the realm of economic crime do not possess elements of organization, while conversely, a large number of criminal activities with organized elements occur within the domain of economy and economic activities.

Jakovljević Marija

Beogradska akademija poslovnih i umetničkih strukovnih studija, Beograd, Srbija