According to McGill University economist R.T. Naylor, economic warfare is a Pandora’s box of unforeseen consequences that often does more harm to the embargoer than to the intended victim.

In Patriots and Profiteers, Naylor examines the history of economic warfare, from Elizabethan privateering by Sir Francis Drake to cannon peddling by Sir Basil Zaharoff before the First World War to the skullduggery of the Cold War.

With a caricaturist’s knack for description, Naylor dredges up a vast history of state-sponsored crime, including bribery by aerospace firms in the U.S. military industrial complex and drug dealing in the southern hemisphere. A case in point is the career of Austrian pastry mogul Udo Prosksch. Dubbed a “techno-bandit,” by Naylor, Prosksch was a thug who became a pastry impresario by buying Vienna’s most famous bakery – he also operated as a middle man between the east and west at the height of the Cold War in the 1970s. Prosksch catered parties between assassinations, dealt at the highest levels of Austrian politics, and managed to evade the justice system until he was jailed for sinking a ship of uranium processing gear.

Naylor sees trade sanctions as gifts to gangsters who make money trading in goods that are otherwise unavailable. Twilight banks in financial havens prosper, often aided by agencies that use criminal activities to cover for payments to spies. Financial empires and nations have been built with the fruits of crime, the criminals legitimized into national heroes when their causes have succeeded. The Stern Gang, a troupe of bandits who financed Israeli independence, produced one-time gang member and later prime minister Yitzhak Shamir.

Naylor’s research is authoritative and his conclusions startling. In nearly every case, sanctions are countered by a sanctions-busting machine. “If the economy [of the embargoed state] is weak and the business class poorly integrated into the world economy, the target state will have to create a new entrepreneurial class that gains experience in industrial espionage, exchange control evasion, money-laundering, smuggling, and maritime fraud,” he says. The end result? “Gangsterism flourishes in an environment of contrived shortages, financial chaos, and rampant black marketeering.”