Financial Crimes as Economic Models in Chronic Capital Systems | Global TV
NV Paulose, Chairman, Global TV +91 98441 82044
Money does not grow on its own. It does not multiply in isolation, nor does it create value without human effort, production, or exchange. Yet many economic systems operate under a persistent illusion that money can expand endlessly without a real foundation. This illusion becomes especially dangerous in what can be called chronic capital systems, where financial crimes are not rare disruptions but recurring patterns that shape the flow of wealth.
To understand this, it is useful to revisit a story from pre independence India, narrated by Sardar Patel. The story is not merely historical. It reveals a structure that continues to exist in different forms even today.
In a rural village under British rule, a series of thefts began to occur. Property was stolen, and the community was left in distress. Instead of protecting the villagers, the British police took a very different approach. They accused the entire village of being responsible for the crimes. As punishment, the administration imposed a collective fine on all residents. This was not a small penalty.
For a rural population already struggling, it was a heavy financial burden. The logic presented by the authorities was simple. If crime occurred within the village, then the village must bear responsibility. But this reasoning hid a deeper truth.
The villagers knew they were innocent. They also suspected something was wrong with the way the police were handling the situation. Instead of accepting the punishment quietly, they resisted. They refused to pay the fine and demanded a proper investigation. They stood together and maintained their position despite pressure from the authorities. As the resistance continued, cracks began to appear in the official narrative. A deeper inquiry revealed that the criminals were not acting separately.
They were operating with the knowledge and support of the very police who were supposed to prevent crime. The thefts had been enabled, if not directly organized, by those in power. The collective fine was not justice. It was a mechanism to extract wealth from innocent people.
Eventually, the truth came out. The collusion between the police and the criminals was exposed. The villagers were vindicated. But the episode left behind an important lesson. Crime, in this case, was not separate from the system. It was part of how the system functioned.
This historical pattern is not as distant as it may seem. The structure remains visible in modern financial systems, especially in the context of cybercrimes. Consider a common situation today. A person finds that money has been fraudulently transferred from their bank account to another account. This is a clear case of theft. In theory, the response should be immediate. The receiving account should be frozen. The money trail should be tracked instantly. Digital systems make this entirely possible. Transactions are recorded, timestamps are precise, and the path of money can be followed in real time.
But what actually happens?
The bank often refuses to take immediate responsibility. Instead of acting swiftly to freeze the funds, it directs the victim to file a written complaint with the police. The burden shifts from the institution that holds the money to the individual who has lost it.
When the victim approaches the police, another delay begins. The police may ask for time, sometimes two or three weeks, to initiate action. By the time any serious step is taken, the money has already been moved across multiple accounts, withdrawn, or converted into other forms. The trail becomes harder to follow, not because it is impossible, but because the response was deliberately slow.
Even then, it is not accurate to say the money cannot be recovered. In many cases, it still can be traced. The digital footprint exists. The system has the capacity. What is missing is the will to act. Banks, Police and Mobile Service Providers are all at fault in their basic duties.
This situation closely mirrors the earlier story. Instead of immediate protection, the system places procedural barriers. Instead of focusing on the crime, it shifts responsibility onto the victim.
A more physical example makes this even clearer. Imagine a theft where gold is stolen and sold to a jewellery shop. If the police catch the thief, they have the authority to take him to the shop and recover the stolen goods. This can be done quickly and effectively.
But whether it actually happens depends on power dynamics. If the complainant is influential, determined, or able to apply pressure, the police act decisively. The thief is taken to the shop, the gold is identified, and it is recovered. If the thief has influence, connections, or offers a bribe, the situation changes. The recovery may be delayed or avoided altogether. The system bends depending on who holds power.
This is not a failure of capability. It is a reflection of how systems are structured. The same principle applies in cybercrimes. The systems are capable of tracing transactions. Banks can flag suspicious movements. Accounts can be frozen within minutes. But action is uneven. It depends on who pushes, who insists, and who benefits from delay.
In this sense, financial crime becomes an economic model. It is not just an illegal act. It is a method through which wealth is redistributed. Money moves from those with less power to those with more influence, often through mechanisms that appear procedural and legitimate on the surface. The illusion that money grows on its own plays a role here. When large amounts of money circulate rapidly through digital systems, it creates the impression of continuous growth. But if that movement is driven by fraud, manipulation, or delayed enforcement, then it is not growth. It is extraction.
The pre independence example and modern cybercrimes share a common structure. In both cases, authority is present but selectively applied. In both cases, the system has the tools to act but chooses when to use them. And in both cases, the burden falls on ordinary people to prove their innocence or recover what was taken from them.
The painful truth is that the scenario is not fundamentally different today. The forms have changed, but the logic remains. Knowing this is important. It shifts the way we understand financial systems. Instead of assuming that all failures are accidental, we begin to see patterns. We start asking who benefits from delay, who gains from confusion, and why systems that can act quickly often choose not to.
Change requires accountability and alignment of incentives. Systems must be designed so that immediate action is the default, not the exception. Responsibility must lie with institutions that have the power to act, not with individuals who suffer the loss.
Until then, financial crimes will continue to operate not just as isolated incidents, but as embedded features of chronic capital systems. And the illusion that money grows on its own will continue to hide the reality that somewhere, someone is always paying the price.
