Click to listen to Misha Glenny talk about McMafia and why organised crime is a bigger threat than terrorism

Should you strike up a conversation with a sophisticated Russian in a luxury hotel on Lake Geneva, and he invites you to join him in a joint trading venture, says the author of this book, there are four possibilities. The man may indeed be the trading-company executive that he claims. Or he could be a Russian intelligence officer working under trade cover. He might also belong to an organised-crime group. Or he could be all three, an exotic mix'n'match that troubles neither his employers nor, apparently, Vladimir Putin.

Once upon a time, we thought we knew what a criminal looked like: a lurking scoundrel who might steal a wallet or attack a bank in a stocking mask with the aid of a shotgun. Today, however, the scale and variety of crime is stupendous: it straddles the world, embracing illegal labour, smuggling, drugs, gun-running, prostitution and computer fraud. Instead of inhabiting seedy New York bars or London pubs, the organisers of these enterprises are most likely to be found at the counters of Gucci or Hermès. Their rewards are measured in billions. The EU estimates that identity theft generates £25 billion a year in profits worldwide. Fake goods, from aircraft spares to spurious Harry Potter stories, are worth up to £250 billion annually. China is responsible for 60% of the market in stolen intellectual property.

Misha Glenny made his reputation as a BBC reporter during the break-up of the Soviet empire and in the Balkan wars. Those experiences introduced him to the murky, bloody, terrifyingly successful operations of the East European mafias, dominated by Russians. For this book, Glenny has extended his researches worldwide. He describes gang operations in Bombay, sex slavery and money-laundering in Israel, the Canadian marijuana trade, Nigerian investment scams, Brazilian cyber-crime and much else.

His message is that the global marketplace has empowered criminals on a huge and terrifying scale. Demand for cheap manual labour, prostitutes, drugs and cut-price copies of prized consumer goods fuels huge industries. Inadequate financial regulation (which, heaven knows, recent events have brought home to us all) enables those who run illegal markets to transfer and launder funds at will.

Israeli police, says Glenny, reckon that up to £5bn passed through their country's banks from eastern Europe following the collapse of communism. This is small potatoes alongside Switzerland's take (an estimated £20bn) or even that of the Republic of Cyprus, which as early as 1994 was processing £500m of Russian money each month.

Nigeria loses 150,000-250,000 barrels of oil every day, stolen and transferred to tankers by the country's great gangsters, who are also among its most prominent citizens. At a humbler level, Nigerians have become world stars in exploiting the avarice of gullible westerners by offering juicy “investment opportunities” through the internet. It is amazing, is it not, that apparently sensible, prosperous middle-class citizens can be such damn fools as to give money, sometimes hundreds of thousands of pounds, to con men who offer their services through the net?

The beneficiaries of crime are, unsurprisingly, big spenders. Colombian narco-traffickers long ago ceased to be content with outdoor and indoor swimming pools at their ranches. Nowadays, the key status symbol is a full-size floodlit soccer pitch. In 2004, a Russian oil executive threw a “Soviet Union nostalgia party” at a chateau outside Paris. French peasants, dressed as Soviet collective farm workers from the 1930s, drove tractors round the fountain in front of the mansion. Heroic Soviet-era music boomed from a speaker system. Guests wore fancy dress of greatcoats and Soviet Komsomol uniforms - with modern designer clothes underneath. Meanwhile, Moscow itself, observes Glenny, who remembers the capital in its drab Soviet days, has been transformed into “a breathtaking Babylon of guns, enterprise, money, violence and fun”.

Reading the author's catalogue of international banditry and murder, I found myself pausing to ask: Is all this fundamentally different from the past? Throughout history, smuggling and piracy have flourished, often with state support. British seamen in the era of Elizabeth I were regarded by the rest of Europe as no better than freebooters, preying on the galleons of richer nations. Successive 19th-century emperors in Beijing watched in impotent rage as British merchants waxed rich by shipping Indian opium into China. Like modern Russian oligarchs, such men lorded it in London and Hong Kong, and in many cases died honoured by their own societies. Ruthless men have always exploited commercial opportunities, heedless of the ill effects on humanity. Glenny, understandably preoccupied with the present, does not address this comparison. But if he did, no doubt he would argue that the scale and sophistication of modern crime is now so great as to pose an unprecedented threat.

Certainly, our absolute dependence upon electronic communication renders vulnerable every citizen who uses a laptop. Russian mobsters have perfected copies of Windows programs, packaged in perfect imitation of the real thing, with spyware built in. Brazilians vie with Russian expertise in cyber-crime, which is growing much faster than the effectiveness of the pitiful anti-virus programs that we buy to combat it.

In the 1990s, the giant US investment bank Merrill Lynch discovered that overnight cleaners and security guards at its New York offices were labouring through the small hours to steal details of clients' personal files. To be sure, that loophole was plugged. But the ingenuity and determination of criminals marches ever faster than society's reinforcement of its defences against them.

America today gives Colombia billions in aid to help stem the drug trade. Yet Glenny suggests that within a few years the cocaine and heroin producers are likely to be redundant. Amphetamines and synthetic drugs, hugely dangerous and much more readily consumed as pills, will dominate the market.

Glenny concludes with a plea for vastly more effective national and international regulation, above all of the movement of money. In the past few years, he says, American opposition to stronger banking regulation has allied with EU incompetence, Russian cynicism, Japanese indifference and the ambitions of China and India “to usher in a vigorous springtime both for global corporations and for transnational organised crime”.

He tells a grisly story very well. It is hard to cherish much hope of mitigation of the manifold evils that he exposes. Too many people, including rulers of China, Russia and lesser nations, are gaining too much from crime for reform to seem credible. q

McMafia: Crime Without Frontiers by Misha Glenny

Bodley Head £20 pp426

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