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Protectionism in the New Capitalist Russia The Russian Mafia has always

exercised an important role in the Russian economy. The contemporary mafiosi are

descendents of the seventeenth Century highwaymen and Cossack robbers. These men

occasionally murdered families prior to raids preventing them from being

captured. The Russia mafiosi made a point to remain aloof from the state. Mob

men were actually spurned when returning home from fighting in the Great

Patriotic War. The gangs begin to dominate markets such as car sales, spare

parts, cigarettes, food distribution, and other markets that the Communist Party

failed to provide under the Bolsheviks (Remnick196). Since the collapse of

Communism and the dawn of Capitalism, the Russian people have been troubled with

innumerable obstacles. There are more than 3,000 gangs known generally as the

Russian Mafia. They have proven to be a significant force in delaying the reform

process (Goldman 58). The new Russian Mafia has involved themselves in every

imaginable kind of criminal activity from drug trafficking and money laundering

to protectionism, which penetrates into every area of society. Under the laws of

the Soviet Union, the regulations were strong and external. Now the external

regulators have disappeared allowing the Russian Mafia to exceedingly enlarge

its strength and influence especially with the accelerated speed of

privatization without legal safeguards. The Russian Mafia’s effect on the

Russian economy through protectionism can be viewed through the different scopes

of academia, the United States Press, and the Russian Press. Protectionism is a

preferred activity of the Russian Mafia. When a new private business opens, the

mafia ensures that it will get a share of the profits. The mob offers the new

operation protection. If the business refuses to purchase protection, the mafia

uses violence against them or their property (Gustatson 105). Most entrepreneurs

purchase the protection. Then the new company pays unofficial taxes to crime

groups. This guarantees that nearly all new businesses will have an affiliation

with the mafia. Gustatson estimates that payments can are approximately twenty

percent of the profit (105). This is a major form of taxation on top of what the

government already commands leading many companies to tax evasion or concealing

their exact value. These acts forfeit what little protection the authorities

might be able to render. The mafia demands a cut of the earnings but in turn

furnish more than adequate security. The mafiosi provides protection from

unaffiliated criminals and rival gangs. They ensure that property is not damaged

or stolen. If entrepreneurs are visited by another organization, they must only

summon their own mafia group. The two gangs will settle the matter themselves (Gustatson

105). This security is an asset that the State seemingly fails to provide. The

Russian Mafia has more men and weapons than the Russian law enforcement. The

police force is an intently corrupt place as is much of the Russian government.

Both army officers and law enforcers are frantic for cash and willing to sell

weapons such as guns, grenades, and rocket launchers (Remnick 109). The Russian

Mafia is able to easily locate weaponry to carry out its duties as protectorate;

while, the authorities lack money and personnel. A few days before the union

dissolved the biggest Russian Mafia leaders held a summit meeting at a dacha

just outside Moscow with the three main Italian crime organizations from Sicily,

Naples, and Calabria. They understood that it would bring turmoil and

uncertainty; yet, the Vori v Zakonye or thieves in the law saw possibility in

the disintegration of the Soviet Union. The organizational leaders assembled to

discuss the selling of nuclear materials, and drug-money laundering (108). The

mafiosi would use their influence to access bureaucratic power. They began

anticipating the collapse by becoming private businessmen: consultants and

rainmakers (197). As Consultants and Rainmakers, they would assert their

authority through protection. Academia states that protectionism is having a

trenchant effect on the Russian economy. It helps create massive inflation to

the already weak economy. The twenty percent of the gross earnings extorted from

the business as protection raises the price of the goods and services

tremendously for the Russian people monthly. The Russian consumer ultimately

pays the protection bill (Goldman 58). It is estimated that in 1996 about eighty

percent of all private businesses made regular payments to a mafia organization

for protection and a substantial amount of that money ends up in other

countries. (Gustatsun 104). Thus the underworld is taking a vast amount of

wealth out of Russia. With the Russian Mafia handling so much money, it is

little wonder that they were able to buy so many governmental officials.

Scholars tend to take an objective approach. The Russian Mafia demands a cut of

the profits, but does render a service that the authorities can not provide.

This is having plundering effect on the economy as a whole. It is causing

massive inflation and sinking the already weak economy. This has lead to a trend

towards nationalism and separatism in Russia. The United States press

understands that the Russian mafia had a definite place in society at one time.

It grew because of the buying and selling of smuggled or stolen goods. It

satisfied the Soviet consumer with products that the State failed to provide.

These items were both consumer and illegal goods. It filled this role for

decades under Soviet rule. The mafia was established and equipped to amplify its

business during market reforms. It was more in touch with consumer demand

(Tanner C2). Russia suffers the most due to mafiosi activities. It seems that

gangs are threatening to take over the nation’s economy. Bombings contract

killings, and robberies are a common occurrence. Russia is a very different

place from the early developing economy of the United States. The robber barons

of the United States can be described as vicious. They made their fortunes by

building and preventing others from doing just that. Yet, Russian wealth is

achieved and held through violence, theft, and manipulation. Many Russians came

to believe that this distorted form of mafia control is the normal...

“Biz in Russia.” Puget Sound Business Journal. 7 March 1995: 18.
“Comrade Godfather; In Russia, the Mafia Seizes the Commanding Heights of the
Economy.” The Washington Post 12 Feb. 1995: C2. “Crime in Russia.” Current
Digest of the Post-Soviet Press 15 Feb. 1995: 14. “Fifty-two Percent Believe
Mafia is Running the Country.” Current Digest of the Post-Soviet Press 8 Oct.
1997: 11 Goldman, Minton. Russia, The Eurasian Republics, and Central/Eastern
Europe. Connecticut: McGraw-Hill, 1999. 58-60. Gustatfson, Thane, and Daniel
Yergin. Russia 2010: And What It Means For the World. New York: Random House,
1993. 105-106. Holmes, Charles. “In Russia, Repression Gives Way to
Corruption.” The Atlanta Journal and Constitution 7 Sept. 1997: B1. Lloyd,
John. “The Russian Devolution.” New York Times 15 Aug 1999: A8. Remnick,
David. Resurrection. New York: Random House, 1998. 108- 110, 196-199. Sukhova,
Suctlana. “Head of Russian Internal Affairs Ministry Believes The Russian
Mafia is a Myth.” Current Digest of the Post-Soviet Press 9 Dec. 1998: 20.
Tanner, Adam. “Russia’s Notorious Mafia Spreads Tentacles of Crime Around
the World.” Christian Science Monitor 11 Jan. 1995: C2. “The Russian Mafia
Means Business.” Economist 4 July1998: 60. You should cite this paper as follows:

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