Economies of Crime

The latest issue of the university magazine HSG FOCUS focuses on the complex intersections between economics, law, and crime – from global drug markets and everyday counterfeiting to accounting fraud and organised crime in Switzerland. The articles show how illegal practices depend on legal structures – and where politics, regulation, and society need to take action.
"Facts and figures on the global shadow economy": Daniel Sager's video provides an overview of the extent and geographical aspects of the most important illegal markets worldwide.
"Chemistry and technology fuel the drug trade": Matías Dewey and Alvaro Pastor highlight how closely the illegal drug trade is intertwined with legal markets. Chemicals from global industry, varying government regulations, and digital technologies enable flexible value chains that are difficult to control. From coca cultivation in the Peruvian Amazon to encrypted messengers and digital payment systems, the article shows that illegal economies cannot function without legal infrastructures – and why regulation, platform control, and government enforcement need to be rethought.
"Homo economicus in crime": Nora Markwalder asks whether criminals act rationally. She explains rational theories of crime, according to which perpetrators weigh up costs and benefits and make targeted use of opportunities – an approach that enables prevention. At the same time, she points out the limitations of this view: many crimes are committed without rational calculation and are more strongly influenced by social or psychological factors.
In his article "The Gucci bag and the big business of counterfeit goods", Markus Müller-Chen sheds light on the billion-pound trade in counterfeit products. High original prices, status consciousness, online availability, and deceptively genuine "super fakes" drive demand.
The article highlights legal remedies, but also the risks for companies, jobs, and buyers, who may be liable to prosecution. Under the title "Accounting scandals: it often ends badly when you embellish the figures", Peter Leibfried analyses the similarities behind cases such as Wirecard, Enron, and Signa.
It shows that despite regulation, patterns repeat themselves: overvalued assets, hidden debts, false consolidation. It often starts with pressure and grey areas, not with intent. Leibfried advocates for better education, ethical awareness, and a critical approach to financial data.
"The Mafia is everywhere. Even in allotment gardens": Henry Habegger shows how organised crime benefits from liberal structures in Switzerland. Lenient penalties, federalism, and enforcement deficits create loopholes. Initial reforms point to a rethink – but consistent enforcement remains crucial.

Study

Paredes, Maritza, and Alvaro Pastor. 2023. “Illicit crops in the frontier margins: Amazonian indigenous livelihoods and the expansion of coca in Peru.” The Journal of Peasant Studies, 51(4), 960–981.

The expansion of coca-cocaine markets in the Amazon is not solely attributable to state failure or criminal groups. This paper demonstrates how long-term development projects in the Amazon frequently result in the opening of agricultural frontiers, the attraction of settlers, and the transformation of the ecology. The unintended consequences of these state-development projects are the progressive impoverishment of local agricultural communities, the degradation of soil quality, and the deterioration of land security tenure. In this scenario, coca crops emerge as the most viable option for ensuring livelihoods.

Study

Dewey, Matías, and Andrés Buzzetti. 2024. "Easier, Faster and Safer: The Social Organization of Drug Dealing through Encrypted Messaging Apps." Sociology Compass 18 (2): e13175.

Digitalization is not limited to the legal economy. It also permeates illegal markets, improving the way people exchange goods and services while making detection much more difficult. For example, this research shows that perfectly legal apps are used to sell drugs. The experience of drug sellers and users is quite clear: apps like Telegram make drug market activity easier, faster, and safer. This article was the first to bring this phenomenon to light.

Website

Stop Piracy

The Swiss platform Stop Piracy provides reliable, fact-based information on counterfeiting and piracy, thereby making an important contribution to raising public awareness. The compact fact sheets are particularly helpful, as they clearly show how to recognise counterfeits and dubious online providers. Anyone who wants to deal with the topic not only theoretically but also practically will find an excellent point of contact here.

Book

Beckert, Jens, and Matias Dewey. 2017. The Architecture of Illegal Markets. Towards an Economic Sociology of Illegality in the Economy.

If you want to understand how illegal markets work — and not just assume that they are merely the consequence of criminal organizations or failed states — this book offers a fresh perspective on hard-to-research economies. It pays attention to additional elements that constitute economies beyond the law, such as credit, infrastructure, social acceptance, and the meaning of commodities. It is the first serious attempt to conceptualize, classify, and suggest future research directions on illegal markets from a sociological perspective.

Book

Christof Schürmann: Die Bilanztrickser - wie Unternehmen ihre Zahlen frisieren und den Anleger täuschen

As a journalist at the German business magazine WirtschafsWoche, Christof Schürmann has been critically monitoring corporate reporting for many years. He not only looks at general business and financial developments but also addresses related issues of accounting and financial reporting. He shows where there is room for manoeuvre and provides examples of how this can be exploited.

Study

Counterfeiting, Piracy and the Swiss Economy 2025

For an additional economic perspective: the OECD study highlights the economic consequences of counterfeiting and piracy in Switzerland. It shows how severely export-oriented industries such as the watch and pharmaceutical industries are affected and provides up-to-date data on trade routes, damage costs and global contexts.

Film

Martin Scorsese: «The Wolf of Wall Street» (2013)

If you want to know how opportunities encourage crime, we recommend the film The Wolf of Wall Street. The film is based on the story of stockbroker Jordan Belfort and is set in New York in the 1980s and 1990s. The scene of the crime is the barely regulated market for so-called penny stocks. The film shows how easy it was to manipulate the market and defraud unsuspecting customers at the time and how low the chance of getting caught was – especially when you lock the financial regulators away in ice-cold offices...

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