Privatization and piratization in post-communist Russia.

• Author: Maltsev, Yuri
• Position: Critical essay

Marshall I. Goldman is the Kathryn Wasserman Davis Professor of Russian Economics (Emeritus) at Wellesley College and has been a member of .the Wellesley faculty since 1958. He is also associate director of the Davis Center for Russian and Eurasian Studies at Harvard University. Generations of policymakers, scholars, and students have regarded Goldman as the internationally recognized authority on Soviet and, after 1991, on Russian economics and politics.

His new book The Piratization of Russia: Russian Reform Goes Awry (New York: Routledge, 2004) focuses on the privatization of state property in the former USSR and in eastern Europe. It is a tale of the making of rich oligarchs in the wake of the collapse of the Soviet Union and of the mafia's role in these reforms.

It is also a story of intrigue, adventure, and the "incestuous relationship between government leaders and corporate directors and bankers [that] allowed for insider deals, golden parachutes, corporate jets, villas in Cyprus and Spain, and instant millionaire status for those who played along" (p. 2).

In addition to published materials, Goldman's sources include "over ninety personal interviews, conversations, and seminar presentations involving senior Soviet and Russian officials, including prime ministers, several of the oligarchs, and about twenty-five factory directors" (p. 11). Thus, The Piratization of Russia combines published academic research and investigative journalism based on anecdotal evidence.

With the collapse of the Soviet Union in December 1991, almost every member of the old Soviet ruling class, or nomenklatura, wanted to take advantage of privatization. Only a handful of these would-be capitalists, however, succeeded in seizing the billions of dollars worth of assets and natural resources that would make them billionaires in post-Communist Russia. Goldman views the privatization of the Russian government's assets as a theft of immense proportions committed by greedy, unscrupulous, and unpleasant individuals. He claims that men such as Boris Berezovsky, Vladimir Gusinsky, Mikhail Khodorkovsky, Roman Abramovich, and Vladimir Potanin looted their country as it moved toward a market economy, and he insists that their fortunes represent the fruits of piratization rather than of any defensible privatization.

Goldman points out that much of what is happening in Russia today echoes not only the Communist-era culture, but Russia's czarist history as well. "Historically, Russian rulers, czars, general secretaries, and now presidents have had little regard for those who have gone into business. Good Russians ('our kind of people') simply did not do that kind of thing. Beginning with the czars, Russians of the upper class served in the court or in the army" (p. 38). The ruling elites cultivated an antibusiness, anticapitalist mentality from the beginning of the Russian state in the tenth century. Goldman notes, "that same attitude explains in part why Russians, despite or maybe because of their distrust of foreigners, were happy to relegate business activities to foreigners and minority groups. Poles, Germans, Jews, Armenians or Georgians were particularly active at the time. Given [the Russians'] traditional prejudices, this only increased the contempt they had for business" (p. 39).

Goldman concludes that "Russia in the pre-Revolutionary era was never able to develop a...