Mafia Capitalism or Red Legacy?*

Abstract

Russia is experiencing an organized crime epidemic. Its interior ministry says there are now 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 Russian President Boris Yeltsin, estimates that four of five Russian businesses pay protection money. They also report that more than eight thousand Russians have mysteriously 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, however, continue to erroneously suggest that criminal operations there are an "extreme form of capitalism." Journalist Adrian

Kreye, for example, says Russia is experiencing a "mafia capitalism" that is based on "the dollar and the law of the fist", and Reuters reports that "threats and murders have become commonplace in the wild atmosphere of post-Soviet capitalism." More subtly, the Washington Post blurs 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.