Is Russia Controlled by ORGANIZED CRIME?

• Author: Dempsey, Gary T.

"Billions of dollars of government-controlled resources--everything from aluminum to gold to fishing rights--have been sold for illicit private gain."

Russia is experiencing an organized crime epidemic. Its Interior Ministry says there are more than 9,000 criminal organizations operating inside the country, employing nearly 100,000 people, or about the same number as the U.S. Internal Revenue Service. The Analytical Center for Social and Economic Policies, a government-sponsored think tank that reports directly to Pres. Boris Yeltsin, estimates that four of five Russian businesses pay protection money. They also indicate that more than 8,000 Russians mysteriously have vanished from their homes, which have become lucrative pieces of real estate since the collapse of communism.

American news accounts of Russia's organized crime epidemic continue to suggest erroneously that criminal operations there are an "extreme form of capitalism." Journalist Adrian Kreye, for example, said Russia is experiencing a "Mafia capitalism" that is based on "the dollar and the law of the fist," and Reuters reported that "threats and murders have become commonplace in the wild atmosphere of post-Soviet capitalism." The Washington Post blurred the distinction between legitimate business and organized crime with talk of criminal "conglomerates" and "mergers."

Other observers hold that organized crime in Russia is simply an "early stage" of capitalism. "Today's corruption," maintains Cornell University professor Michael Scammell, seems "characteristic of a period of profound change and upheaval, when Russian society is in the stage of the primitive accumulation of capital." Stephen Handelman, author of Comrade Criminal: The Theft of the Second Russian Revolution, writes that many Russians believe "that a period of lawlessness is part of the price every society pays" for capitalist development.

Organized crime in Russia is neither a form nor a stage of capitalism. Instead, it is a direct legacy of years of all-pervasive bureaucratic control in the former Soviet Union and an economy that was forced underground.

The presence of government control everywhere in Soviet life provided the original opportunity for the institutionalization of widespread bribery and extortion. Indeed, Soviet bureaucrats could, and did, demand payment for favors for everything from drivers' licenses and consumer goods to medical care and higher education.

Moreover, bureaucratic corruption and favor-trading meant that there were no uniform laws to live by. Russians encountered rules and requirements that varied from bureaucrat to bureaucrat and government ministry to government ministry. The result was that the U.S.S.R. functioned not under the rule of law, but under the...