In the 1967 film, The Graduate, Dustin Hoffman’s character, Benjamin Braddock, is pulled aside at his college graduation party by a friend of his fathers and told “I just want to say one word to you … plastics.” Ostensibly, in that one word, Benjamin is given the key to a successful career in 1960s America where indeed plastics were a staple product of the industrial realm. Today, of course, we now know that the microplastics that have proliferated everything in our world including our own bloodstreams are killing us. That miracle material of commerce that we consumed by the ton is now literally consuming us from the inside, out.

Every economic era has a character. Once agrarian, then industrial, then digital, and now moving to artificial intelligence, economic forces align with models of productivity that vary dramatically in terms of the value of their inputs. Labor, then capital, then intelligence have been the drivers of our economies to-date in America. The systems we call economies have, in the post-medieval modern era, moved rather gracefully from one valued input to the next without significant damage to the system. But all systems eventually enter an entropic phase characterized by cascading effects of implosive destruction after which a new order emerges, and a new system becomes apparent.

The interregnum between systemic implosion and rebirth is a period of chaos. One might think that during these chaotic periods little wealth can be created or captured. That the destruction only allows downside realizations. And while more wealth is likely captured than created during these periods, wealth can be gained. So, what are the skills of capture? What is the next “plastics”?

The answer is hiding in plain sight; although, hiding is key to its value. The fastest growing businesses in the world today, that are largely invisible to most of us, are what I will refer to as dark businesses. Laundering—the disguised conversion of—money (both traditional and crypto), goods, and services is probably the biggest. Private security is also a high growth business. Arms and munitions dealing is up there. And, of course, espionage and those pesky cybercriminals.  These businesses don’t issue press releases or file public disclosures, let alone comply with any laws, including tax laws. Non-compliance is their core value proposition; ergo, dark. What more evidence of entropy is required when the fastest growing businesses in an economy are criminal, or pseudo-criminal, enterprises?

The displacement of humans (due to AI) in the traditional, visible, lit economy, together with the destruction of stabilizing institutions, are contributors to the dark economy. More specifically and impactfully, however, are the tariffs, sanctions, and war Trump has unleashed on the world. His policies are collectively little more than a presidentially sponsored criminal stimulus package. Dark businesses thrive on norms, rules, and laws that are begging to be ignored and broken. When coercion is overdone, obstacles are overcome. Oil still makes its way out of the Persian Gulf. Goods and services leap borders and arrive tariff-free. Missiles and drones get launched. None of […]