THE MAFIA, THE HIGHEST STAGE OF CAPITALISM.... or how Lenin got it all wrong.
(Gustave Jaeger, 1997)
The Russian Mafiya and the Global Capitalist System:
A Marxist Perspective
Steve Boswell, Northern Arizona University (Dept of Political Science)
Introduction
Since the collapse of the Soviet Union, the world has focused on how to privatize and make Russia a competitive market in the global capitalist system. The economic reforms instigated by the Russian government and overseen by the International Monetary Fund and World Bank, have been continuously commended and encouraged by the leading world economies, most notably the United States and Japan.
Many analysts have begun to focus on the problems presented by the organized crime syndicates operating in Russia and the former states of the Soviet Union and their impact on the economy. They threaten a potential economic withdrawal by the investing corporations and governments unless Russia can curb its rising crime rates. Stephen Handelman states that because of crime there are already signs that Western investors have begun to withdraw their investments. If anything, the opposite is probably the case. Investors continue to pursue the ever expanding and potentially profitable market of the former Soviet states. This is easily illustrated by surveying the amount of information currently found about how to invest and succeed in the Russian market.
The majority of analysts agree that there is a problem with crime in Russia. They even acknowledge the role of the Russian Mafiya1 in the economy. When the Prime Minister of Russia, Victor Chernomyrdin admits that 60% to 70 % of his nation's economy is controlled by the mafia (Weinberger 1994: 37), it is difficult to ignore the magnitude of organized crime. Therefore, more and more research on the Russian Mafiya has begun to surface.
For this paper, I will look at organized crime in Russia and analyze it as a continuation of the former Soviet system. It is also necessary to investigate the role of economic reform on the growth of the organized crime syndicates. I will argue that organized crime is a necessary factor in the capitalist system and is not unique to Russia. To illustrate this, I will look at the internationalization of organized crime and its role in the world economy.
The first part of the paper will deal with the theoretical background for studying organized crime and mafia activities. I will argue that the traditional bureaucratic methods are inadequate and opt for a marxist interpretation of crime. From this, I will give a brief historical overview of organized crime in the Soviet Union and its metamorphosis into the current Russian Mafiya. Then, I will look at the economic reforms that Russia is continuing to undertake and analyze their impact on the economy. After analyzing the reforms, I will explain the role of the global economy and the international capitalist structure and the impact on the mafia. Finally, I will conclude with implications for further study. [...]
In "The Encounter Between Big Business and Organised Crime", Ruggiero argues that the distinction between "criminal" and "clean" business is becoming increasingly blurred. He argues that the illegal economies and the legal economies are inter-dependent and cannot exist without each other. "Large criminal organizations are masters in the field of 'extraordinary' accumulation when they invest in legal companies and, simultaneously, in parallel illegal activity which is more advantageous in the short run." (Ruggiero 1985: 101) In these situations, illegal organizations present themselves as natural partners for companies that go through periodic cycles of profit and loss. These "legitimate" companies see the potential for investment in the illegal a ctivities and use these situations to their advantage. By using informal or illegal syndicates they can avoid public scrutiny and maintain their legitimacy while the criminal organizations use their labour to absorb the punishment mechanism and reap the benefits of the investments. [...]
Full essay:
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