Economics of Crime | Shri Abhayanand | TEDxSIBMBengaluru

Summary

A veteran police chief from Bihar, with 37 years of experience, shares his insights on the economic nature of crime and the generation of black money. He conducted an experiment to shift policing focus from catching criminals to tracing and preventing the laundering of illicit wealth. Collaborating with the Enforcement Directorate, they targeted property confiscation of criminal gangs, leading to visible results and a psychological impact on offenders. The chief advocates for a paradigm shift in police mission statements to include detection of black money and prevention of money laundering, aiming for a safer society.

Takeaways

• 👮‍♂️ The speaker has nearly four decades of experience in policing, with a significant portion of that time spent as the chief of police in Bihar, India.
• 🔍 The speaker's extensive experience has led to the belief that most crimes are essentially economic activities, leading to the generation of black money.
• 🤔 A heinous crime in Bihar, where property was looted, prompted the speaker to question the whereabouts of the unrecovered property, linking it to ill-gotten wealth in society.
• 🔗 The speaker suggests a connection between crime and the creation of a 'parallel state' funded by black money, which grows at the expense of the legitimate state.
• 🚔 Traditional policing focuses on apprehending criminals rather than tracking the economic trail of black money, which the speaker believes is a shortcoming.
• 🔄 The speaker's experiment aimed to shift the focus of policing from individuals to the economic assets and properties involved in crime, to disrupt the cycle of crime and wealth accumulation.
• 📊 A schematic diagram was used to illustrate the concept of a 'parallel state' created by criminals, which is larger and more powerful than the legitimate state due to economic leaks.
• 🏛️ The speaker faced legal challenges in conducting the experiment due to the Prevention of Money Laundering Act not providing a role for the police, forcing them to act as a catalyst to other enforcement agencies.
• 🏢 The experiment involved data collection, documentation, and collaboration with the Enforcement Directorate to target criminal gangs and their assets in Bihar.
• 📉 The confiscation of illegally obtained properties had a tangible impact on criminals, shocking them and potentially disrupting their operations.
• 🌟 The speaker concludes by advocating for a change in the police mission statement to focus on detecting black money and preventing its laundering, to make society a more livable place.

Q & A

What is the speaker's background in policing?

The speaker has 37 years of experience in policing, including three years as the chief of police in the state of Bihar.

What does the speaker believe is the root cause of the crimes they have encountered?

The speaker believes that the crimes they have encountered are essentially economic activities.

Why was the speaker unsatisfied with the outcome of a dacoity case in Bihar?

The speaker was unsatisfied because they could not recover most of the looted property, which led them to question where the rest of the property had gone.

What connection did the speaker make between unrecovered property and wealth in society?

The speaker linked unrecovered property to the ill-gotten wealth they observed in society, suggesting that crimes generate black money.

What was the speaker's innovative approach to policing during their tenure as chief?

The speaker aimed to shift the focus of policing from persons (criminals) to properties and assets, to address the economic aspect of crimes.

What was the main challenge the speaker faced in implementing their ideas?

The main challenge was the Prevention of Money Laundering Act, which did not provide a role for the police in tracking the trail of black money.

How did the speaker's experiment with the Enforcement Directorate work?

The Bihar police gathered data and documents, then proposed formal actions to the Enforcement Directorate against various criminal gangs, leading to confiscation orders of illegally obtained properties.

What was the impact of the confiscation orders on the criminals?

The criminals were stunned and shocked by the police's response, as they had not expected such actions from any police force.

What is the speaker's suggestion for a change in the mission statement of the police?

The speaker suggests changing the mission statement from 'prevention and detection of crime' to 'detection of black money and preventing the laundering era'.

What is the ultimate goal the speaker envisions for society through their policing approach?

The speaker hopes that by focusing on the economic aspects of crime and tackling black money, society will become a more livable place.

Outlines

00:00

👮‍♂️ Policing and the Economics of Crime

The speaker, a retired police chief with 37 years of experience, shares his insights on the economic nature of crime. He recounts a dacoity incident in Bihar where property was looted, and despite the criminals being caught, the majority of the looted property was never recovered. This led him to ponder the fate of the missing property and its connection to the wealth he observed in society. He hypothesized that crime generates black money, which is then laundered into legitimate wealth, creating a 'parallel state' that undermines the actual state's economy. The speaker's dissatisfaction with the traditional focus of policing on catching criminals rather than tracking the economic trail of crime led him to experiment with a new approach during his tenure as police chief.

05:02

💼 The Parallel State and Money Laundering

The speaker discusses the concept of a 'parallel state' created by criminals who have transitioned from illegal activities to legitimate businesses, causing significant economic leaks. He uses a schematic diagram to illustrate how this parallel state, fueled by crime and money laundering, becomes larger than the actual state, suggesting that it thrives at the state's expense. The speaker questions whether the police, in their efforts to protect the state, are inadvertently protecting this parallel state. He explains that the power of criminals lies not in their person but in their assets and properties. He faced a legal challenge in his experiment due to the Prevention of Money Laundering Act not assigning a role to the police, forcing him to act as a catalyst to the Enforcement Directorate. The Bihar police, in collaboration with the Enforcement Directorate, targeted various criminal gangs, leading to the confiscation of illegally acquired properties and a visible impact on the criminal psyche.

10:02

🛡️ Changing the Policing Paradigm

The speaker reflects on the success of the confiscation orders and the positive media coverage and public appreciation they received. However, he emphasizes that the Prevention of Money Laundering Act still does not provide a role for the police, limiting their function to催化作用. He argues that crime is fundamentally an economic activity and that policing methods must evolve to focus on detecting black money and preventing its laundering. The speaker concludes by advocating for a change in the police's mission statement to reflect this new focus, suggesting that such a shift could make society a more livable place.

Keywords

💡Economics of Crime

The term 'Economics of Crime' refers to the study of criminal behavior through an economic lens, analyzing how criminals make decisions based on cost-benefit analysis. In the video, the speaker suggests that many crimes are essentially economic activities, driven by financial gain. This perspective is crucial as it shifts the focus from the criminal to the economic outcomes of crime, such as the generation of black money.

💡Black Money

Black money refers to funds that are earned through illegal activities or legitimate income that is not declared to the government for tax purposes. The video emphasizes that crime often leads to the creation of black money, which is then laundered to appear as legitimate income. The speaker's experiment aimed to tackle this issue by focusing on the economic outcomes of crime rather than just the criminals themselves.

💡Money Laundering

Money laundering is the process of making illegally-gained proceeds (black money) appear as though they have been derived from legitimate sources. The video discusses how black money generated from crime is laundered, transforming it into 'white' or legitimate money. The speaker's initiative to combat crime involves disrupting this process by targeting the assets and properties of criminals.

💡Prevention of Money Laundering Act

The Prevention of Money Laundering Act is a legal framework designed to prevent and control money laundering activities. In the video, the speaker mentions this act as the legal basis for their experiment, highlighting the challenge that the act does not provide a direct role for the police in combating money laundering, which is a central part of the speaker's strategy to address crime.

💡Parallel State

The 'parallel state' is a concept introduced in the video to describe a situation where illegal activities and the proceeds from them (black money) create an alternative, informal economy that operates alongside the formal state economy. The speaker argues that this parallel state, fueled by crime, poses a significant threat to the legitimate state and its economy.

💡Social Laundering

Social laundering, as introduced in the video, refers to the process by which criminals or their associates gain social acceptance and power through their illicit wealth. This is a form of legitimizing their status in society, which makes it difficult for law enforcement to act against them. The video suggests that tackling social laundering is as important as addressing economic laundering.

💡Enforcement Directorate

The Enforcement Directorate is a specialized financial law enforcement agency in India that investigates economic offenses, including money laundering and tax evasion. In the context of the video, the speaker had to work with the Enforcement Directorate, as the police were not empowered by the Prevention of Money Laundering Act, to execute actions against economic crimes.

💡Confiscation Orders

Confiscation orders are legal directives issued by a court or enforcement agency to seize property or assets that are believed to be the proceeds of crime. The video describes how the Bihar police, in collaboration with the Enforcement Directorate, successfully obtained confiscation orders for properties that were illegally acquired by criminals.

💡Criminal Assets

Criminal assets refer to properties, wealth, or resources that are acquired through illegal activities. The video emphasizes the importance of targeting these assets as a strategy to combat crime, rather than focusing solely on apprehending the criminals. The speaker's experiment aimed to disrupt the economic foundation of criminal activities by targeting their assets.

💡Illegitimate Wealth

Illegitimate wealth is wealth that is gained through illegal or unethical means. In the video, the speaker discusses how crime generates illegitimate wealth, which is then laundered to appear legitimate. The focus on tracing and confiscating illegitimate wealth is central to the speaker's approach to crime prevention and control.

💡Law Enforcement

Law enforcement refers to the activities and initiatives undertaken by police and other agencies to enforce the law, maintain public order, and protect the rights and properties of citizens. The video discusses the need for a shift in law enforcement strategy, from merely apprehending criminals to targeting the economic outcomes of crime, such as black money and criminal assets.

Highlights

37 years of policing experience, including 3 years as chief in Bihar, shaped the speaker's perspective on crime.

Crimes are viewed as economic activities, leading to the generation of black money.

A heinous incident of dacoity in Bihar led to the recovery of only a small part of the looted property, raising questions about the rest.

The speaker's dissatisfaction with the incomplete recovery of looted property led to a deeper investigation into the economic aspects of crime.

The link between unrecovered property and ill-gotten wealth in society was a recurring question for the speaker.

The realization that crime leads to black money and the need for a shift in policing focus from persons to properties.

The concept of a 'parallel state' created by criminals, which grows at the cost of the actual state.

The police's role in protecting the parallel state and the ethical dilemmas it poses.

The experiment to shift policing focus from catching criminals to tracking and preventing the laundering of black money.

The use of the Prevention of Money Laundering Act as a legal framework for the experiment, despite its limitations for police involvement.

Collaboration between the Bihar police and the Enforcement Directorate to target criminal gangs and their assets.

The impact of confiscation orders on the properties of criminals and the shock it caused among them.

Media and public appreciation of the new approach to tackling crime and its economic roots.

The need for a change in the police's mission statement to reflect the focus on detecting black money and preventing its laundering.

The vision of a society where the economic impact of crime is addressed, making it a more livable place.

Transcripts

37 years in police with three years as

the chief of the police force in a very

difficult state of Bihar in all roughly

about four decades of my policing

experience and what do you think

gentlemen this has taught me all the

crimes that we see around us that we

hear about that we read from the news

media are essentially economic

activities that's how we come to

economics of

you

into thinking along these lines relates

to a town in Bihar a small town a

heinous incident of dacoity had taken

place apart from the wanton violence

that was committed by the criminals a

lot of property was also looted away we

detected the crime

we nabbed the criminals

we were also able to recover a very

insignificant part of the looted

property my seniors and my subordinates

both appeared to be very satisfied with

the entire outcome not me I was less

than satisfied because I felt unsettled

where had the rest of the property which

we could not recover gone incidents

after incidents like this kept taking

place and the same question kept coming

back to me with regular nagging thing

like it was it nagged me very regularly

I was somehow able to link the

unrecovered property to the ill-gotten

wealth that I saw around me in the

society I was not able to identify the

two of them completely because the shape

and form of the two properties were

entirely different but the feeling

within me that crimes little rotten

wealth had sunk in by them as years

rolled by my thoughts began to

crystallize my ideas became clear I was

more than convinced that crimes lead to

black money they generate black money in

fact but policing focuses on the people

that is the persons who commit the crime

there are criminals

you call them it is true that Police

Department was neither designed nor

trained to track the trail of black

money which is created in the wake of

the series of crimes that get committed

it is prepared and designed and trained

to nab criminals and as we call in our

parlance bring them to justice

this desire within me to shift the focus

of policing from person to property

burned for very long years till I got an

opportunity to put my ideas through an

experiment into practice this experiment

and the conceptual part of it was formed

in a way that I had only about three

three years when I took over as a police

chief to complete the experiment the

three years that I had odd is definitely

long enough is not long enough for

stable conclusions to be drawn as the

outcome of the experiment but it's

definitely a long enough period for

conclusions to be drawn about the

possible solutions to the problem of

proliferating crime the theoretical

concept on which this experiment was

based comes onto your screen now you

will notice this is a schematic diagram

where you have leaks on both sides of

the state the revenue as well as the

expenditure these leaks are caused by

the criminals who have graduated from

the yellow-colored domain of crime to

the white colored ones and the leaks of

late have become so huge that a

monstrous peril

State has been created you will see from

the diagram that the parallel state is

bigger in size than this state so

apparently it appears that a parallel

state grows at the cost of the state

which is true and therefore the natural

question that arises is that the police

protect the parallel state in the name

of the state are we doing that and this

is a question which I kept asking myself

all through my career the final outcome

of this entire process which has been

depicted very schematically and which

are seeing on your screen suggests that

at the end of the whole thing we create

white laundered assets of criminals

while this money laundering is going on

the black money is getting converted

into white there is also a parallel

process which I call social laundering

which is simultaneously taking place a

class of people who are both powerful

economically as well as socially is

created and they are very powerful

people in fact they are so powerful that

even the most honest policeman with the

best of intentions is not able to take

them on it is therefore very easy to see

why the power of criminals and the

potential to commit crimes

does not lie in his person instead it

lies in his assets and his properties

when I was contemplating the design of

my experiment I came across another

problem which was neither social nor

economic it was legal instead I had

decided that the laboratory in which I

will devise my experiment and conduct

it will be the Prevention of Money

Laundering Act

unfortunately the Prevention of Money

Laundering Act does not provide the

police with any role to play whatsoever

I had therefore no option but to act

only as a catalyst to the Enforcement

Directorate which was the agency which

was created under the TAC not the police

to execute everything that was given in

the act the template of my experiment

was ready and my experiment was on the

Bihar police gathered data relevant ones

collected all the documents to back up

the data and then made very formal

proposals to the Enforcement Directorate

to initiate action against all use and

all colours of gangs which are operating

across the board in the state of Bihar

just to illustrate my point

the gangs included Gant's which indulge

in kidnapping for ransom these are the

gangs which defamed Bihar sometime back

there were gangs of bootleggers who

would cause periodical crisis the huge

tragedies there were gangs which

indulged in flesh trade this is an

offence which I have always maintained

as a policeman is a silent killer in

society the police and the Enforcement

Directorate worked in tandem and in

complete unison there was just no

difference between the intentions of the

Bihar police and the enforcement

directorate that is why very soon

confiscation orders of properties which

were illegally gotten wealth which were

laundered by tacit

of the gangsters we're passed by the

competent authority in the Enforcement

Directorate results had started coming

in the results were also seen on the

ground because the confiscation orders

of the properties that I have just

talked about

we're implemented on the ground results

were visible and the impact on the

psyche of the criminals was palpable

they were stunned they were they were

shocked because they had never expected

this response from any police force

bahar was perhaps the first police force

to have experimented with this idea in

this form the media also started

becoming curious about the whole process

they had not perhaps seen it before and

therefore they started observing the

entire process and the outcome of the

process they started writing positively

about it

the Weizmann in the state were also very

appreciative about the process because

they started feeling that this was

having an impact at the root of the

problem and this was a concept which was

getting into the people who we call

usually intellectuals in the society

things were going on extremely well but

there was one problem still which

remained and we had started off with

this problem the problem still remains

the problem is the Prevention of Money

Laundering Act as yet does not offer any

role to the police to play therefore the

police does not have any option but to

act as a catalyst in this process

the experiment that I have just

described

paradigms in crime keep changing with

time

but there is one constancy in all these

changes the concept that crime is

essentially an economic activity and if

crime has to be tackled then this

paradigm has to be kept in mind and

factored in the methodology of policing

will have to change it is time therefore

and it is high time therefore that the

mission statement of the police gets

changed or at least modified from

prevention and detection of crime to

detection of black money and preventing

the laundering era my contention is that

if this process is carried on then

society will become a livable place to

be in hoping for such a tomorrow thank

you very much