A budding science of illegal markets

Illegal markets create untold societal and environmental harm, but they have attracted surprisingly little scholarly attention. This paper explores illegal markets as a class of objects. It considers similarities and differences across markets, with particular attention to nine: human smuggling, commercial sex, firearms, money laundering, illegal fishing, international wildlife trafficking, counterfeit goods, drugs, and tobacco products. These nine markets display enormous variation, stemming in part from differences in the "physics" of the good or service they provide. Other differences can be seen as adaptations to different policy and enforcement pressures. Some markets have changed in fundamental ways over recent decades, while others remain more stable. The overall rate of true innovation is not necessarily high, but most appear quick to adopt innovations that are created by the larger economy such as cryptocurrencies, secure communications, and dark web distribution. Low rates of investment in research and development, branding, and marketing along with simultaneous high rates of adaptability may be a natural outgrowth of these markets being dominated by relatively small organizations. It is hypothesized that one can group the common illegal markets into those that: 1) Supply goods stolen from a common heritage, either natural (illegal fishing, wildlife trafficking, illegal mining) or cultural (antiquities); 2) Supply goods or services to people committing crimes beyond just consuming the banned products (guns, money laundering); 3) Undermine an authority's rights (smuggling humans across borders, counterfeiting goods, tax-evading cigarettes); and 4) Supply products that harm the user and/or seller (drugs, commercial sex, gambling, raw milk).