Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism

Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism, Vadim Volkov. Ithaca, New York: Cornell University Press, 2002. 224 pp. $42.95 hardcover.Russian organized crime has undergone enormous changes since the collapse of the Soviet Union. The trends and patterns that characterize its modus operandi have been in constant flux, under pressure from both external and internal forces. In lurid headlines and seats of power it has been hyped, vilified, and glamorizedbut rarely studied as an academic subject. Unfortunately, the lack of serious literature has somewhat obscured its true colors. Its secretive and amorphous nature makes it difficult to investigate, especially for outside observers. Its combination of death and honor lends itself easily to yellow journalism. Its connections to former KGB agents smacks of global conspiracies and stirs the remnants of cold war mentality.In Violent Entrepreneurs, Volkov attempts to correct the many myths and misperceptions about Russian organized crime by foregoing the sensational and simplistic language of murder and greed and treating the subject as an economic agent responding to forces of supply and demand. His book, although not without flaws, is a welcome addition to a small but growing library of academic literature that examines organized crime as a real nonstate actor, on par with international blocs, NGOs, and corporations.The thrust of Volkov's argument is that in the early 1990s, criminal groups helped to sustain Russia's fledgling private economy by providing something that the government could not-property rights and contract enforcement. This argument has been developed by Diego Gambetta and, notably, by Federico Varese (who plays a conspicuously small role in Volkov's explanations), and it runs as follows: although the post-Soviet government instituted the freedom to own private property, it did not provide the mechanisms needed to protect it-that is, a viable set of laws, an independent judiciary, and an impartial enforcement apparatus in the form of police. Thus, in the early 1990s, Russian businesses were operating in a state approximating anarcho-capitalism-Hobbes' state of nature revived in the twentieth century. Not surprisingly, organized crime groups stepped in to fill the vacuum left by the state, providing property protection and contract enforcement to fledgling post-Soviet markets. The paradoxical corollary is that organized crime may actually have helped to create and sustain those private markets, albeit at a high cost to the owners.The important conclusions to draw from Volkov's book is that, first, organized crime has primarily acted as an economic agent and, second, since 1995 organized crime has lost its monopoly on providing protection services. Organized crime has become only one of several types of violence-managing agencies (VMAs), as Volkov calls them. That is hardly news for the average Russian businessman. In my conversations with owners of small and middle-level businesses around Moscow and St. Petersburg at the end of 2001, there was universal consensus that an enterprise can operate without being extorted by a criminal group. What is required, however, is the presence of some sort of violence-managing agent, which Volkov classifies into four types: criminal groups, private security services, private protection companies, and informal protective agencies associated with the state. As a result, crime groups must now compete not only among themselves but also against the other VMAs. The state, meanwhile, has also been slowly reasserting its control over enforcement and property protection. Moreover, the largest organized crime groups have slowly been shifting into legitimate spheres, where the risks are smaller and the profit potentials are greater, given the right connections. As a result, the influence of "pure" organized crime has greatly diminished since the early 1990s.Many observers, however, are still captivated by the staggering statistics from that period, which proclaimed that the Russian mafiya (a problematic term for a phenomenon neither fully Russian nor fully mafia-like) controlled 80-some percent of Russian businesses. …