Posts Tagged ‘Drug Cartels’

The passing scene: Notes & links 11/26/13

November 26, 2013

Silicon Chasm: the class divide on America’s cutting edge by Charlotte Allen for The Weekly Standard.

Pundits such as Richard Florida say that if a community caters to the “creative class,” there will be business innovations that expand the economy and benefit the whole community.   Charlotte Allen’s tour of Silicon Valley indicates that things don’t necessarily work out that way.

When Product Features Disappear: Apple, Amazon and Tesla and the Troubled Future of 21st Century Consumers by Steve Blank.

One of the great innovations of the 21st century is software-based products which you don’t need to maintain yourself, and which suppliers automatically upgrade without you having to go to the store.  But Steve Bank points out that the downside is that (1) the product you bought today may not be the product you have later, (2) manufacturers can, and do, downgrade your product as well as upgrade it, and (3) you have no legal protection.

“Blood Avocados”: the Dark Side of Your Guacamole by Jan-Albert Hootsen for the Vocativ news site.

Alcohol prohibition in the United States in the 1920s fueled a big increase in organized crime.  But when Prohibition ended, the crime syndicates didn’t go away.  The gangsters found new forms of enterprise.  Drug prohibition in the United States has fueled a big increase in organized crime in Mexico, Colombia and other countries.  But drug legalization won’t make those crime syndicates go away.  Jan-Albert Hootsen wrote about how one Mexican drug syndicate is taking over the avocado industry.

Coal Politics: Big Win in a Small Town by Lou Dubose for the Washington Spectator.

HSBC’s history and the oldest drug cartel

February 15, 2013

The Opium War

HSBC bank branches are everywhere in my home city of Rochester, N.Y.  Many Rochesterians think of it as a Buffalo corporation, since its presence here is a result of acquisition of Marine Midland Bank of Buffalo.  But actually HSBC originated in the Far East in order to finance the British opium trade with China—the biggest and worst drug cartel in human history.

Le Monde diplomatique described HSBC’s origins in its on-line English-language edition.

HSBC — formerly the Hongkong and Shanghai Banking Corporation … is today one of the world’s largest banking groups.  But it began with maritime business and the opium trade. … …

Opium made up 70 percent of maritime freight from India to China, where it was sold to the Chinese by British compradores, despite all efforts by the Chinese authorities to stop it.

[Thomas] Sutherland understood that the time was right for a commercial bank.  In 1865 he and a few others founded the Hongkong and Shanghai Banking Corporation.  The board …  included the remarkable Thomas Dent, founder of Dent & Co. 

In 1839 a senior Chinese government official, Lin Zexu, known for his competence and moral standing, issued a warrant for Dent’s arrest in an attempt to close his warehouses, which infringed the Chinese ban on opium.  That helped trigger the first opium war, which ended in August 1842 with the unequal treaty of Nanking.

chinese-opium-smokersAfter the second opium war (1856-60), the British and French imposed territorial concessions under foreign administration, the opening of Chinese ports to foreign trade and the legalization of the opium trade. 

When Sutherland began the Hongkong and Shanghai Banking Corporation, the conflict had been over for five years.  The Chinese characters in the transliteration of its name are auspicious, and can be understood to mean gathering wealth.

HSBC’s first wealth came from opium from India, and later Yunan in China.  In 1920, bank subsidiaries were opened in Bangkok and Manila. When the People’s Republic of China was established in 1949, the bank refocused its activities in Hong Kong, but between 1980 and 1997 it set up in the US and Europe. It moved its headquarters from Hong Kong to London in 1993 prior to the 1997 transfer of sovereignty to China.

… … And in 2008 HSBC’s boss, Vincent Cheng, chairman of the Hongkong and Shanghai Banking Corporation and of HSBC Bank (China), was appointed to the National Committee of the 11th Chinese People’s Political Consultative Conference.

via Le Monde diplomatique – English edition.

When HSBC executives were caught late last year financing the Mexican and other drug cartels, they were returning to the company’s historic roots.  And they are almost as much above the law now as their corporate forebears were 150 years ago.

Click on HSBC: Chinese for making money for the full Le Monde article on HSBC’s history.

Click on Gangster Bankers: Too Big to Jail for Matt Taibbi’s article about HSBC in the current issue of Rolling Stone.

Click on How too-big-to-jail HSBC wriggled out of money laundering indictment  for more on Treasure Islands, a web log devoted to money laundering and tax havens.