The stimulus that is Russian

by on August 9, 2013 at 6:59 am in Current Affairs, History, Law | Permalink

A business owner in Russia has a better chance of ending up in the penal colony system once known as the gulag than a common burglar does.

More than 110,000 people are serving time for what Russia calls “economic crimes,” out of a population of about three million self-employed people and owners of small and medium-size businesses. An additional 2,500 are in jails awaiting trial for this class of crimes that includes fraud, but can also include embezzlement, counterfeiting and tax evasion.

But with the Russian economy languishing, President Vladimir V. Putin has devised a plan for turning things around: offer amnesty to some of the imprisoned business people.

And this:

In 2010, the police investigated a total of 276,435 “economic crimes,” according to the Russian prosecutor general’s office, whose statistics show burglary and robbery are prosecuted less than economic crimes.

…Russia’s infamous penal colonies, rural camps swirled in barbed wire, appear today much as they did when Aleksandr Solzhenitsyn wrote “The Gulag Archipelago” in the 1960s. But at least one of every 10 prisoners today is a white-collar convict.

And why are so many businessmen in prison?

…in Russia, the police benefit from arrests. They profit by soliciting a bribe from a rival to remove competition, by taking money from the family for release, or by selling seized goods. Promotion depends on an informal quota of arrests. Police officers who seize businesses became common enough to have earned the nickname “werewolves in epaulets.”

There is more here, interesting throughout.

Morgan Warstler August 9, 2013 at 7:13 am

Interesting through-out?

F*cking disgusting through-out.

To understand why Nozick is right, one most only admit that those on left hate their betters. Putin is just another example.

This is why libertarians are morally obligated to manipulate by any mean necessary their way into political power.

There aren’t many types of people, here’s how to weight them:

Entrepreneurs > people who happily buy from entreprenuers > people who work happily for entreprenuers > thinkers who merely valorize entrepreneurs > nobodies

mw August 9, 2013 at 8:01 am

As always, the US must shine as a beacon of liberty for the rest of the world. While Russian entrepreneurs languish in jail, we proudly say: “Not ONE financier shall serve a single jail sentence following the $6 trillion implosion of our economy. FREEDOM!”

dan1111 August 9, 2013 at 8:12 am

I don’t agree with your take on America, but I’d rather live in the country you think America is than in Russia.

Andrew' August 9, 2013 at 9:16 am

Or, it was the Democrats and RINOs known as neocons who did that and not libertarians.

Andrew' August 9, 2013 at 9:20 am

Again, in the EARLY 00s, the Libertarian Party made small business their key constituency. We’ve almost forgotten the solutions we came up with to the problems that the two DC parties haven’t even identified yet.

Andrew' August 9, 2013 at 9:25 am

Case in point, we still don’t have the living wills to avoid the ad hoc fire sale of financial institutions (the ONLY cause of the crisis), eliminating the need for the bailouts that cause not too big to fail institutions to become even fewer actually too big to fail thanks to government institutions- again I would point out that property enforcement delineation is THE legit role of a legit government and they’ve done nothing. Now that I mention it, the need for the living will is only because ad hoc bankruptcy is so horrific because government doesn’t even fulfill that basic obligation properly.

mw August 9, 2013 at 11:27 am

Right we just need to sancitmoniously “declare” that we’re going to let a trillion dollar balance sheet vanish into the ether when the sh** hits the fan and that will make it so. SO much more practical and, more importantly, “freedom”-preserving, than just forcing financials not to take on 20x as much leverage as non-financials.

Andrew' August 9, 2013 at 1:28 pm

Oh, an idea. You mean like the Democrats and Republicans didn’t?

Andrew' August 9, 2013 at 2:21 pm

What if, by the way, poorly constructed (and we’d have to assume they would be) capital requirements caused or accelerated a cash crunch?

derek August 9, 2013 at 9:38 am

I would be content if they hadn’t gotten any money from taxpayers and the Fed.

Bernard Guerrero August 9, 2013 at 1:48 pm

A) Better that a hundred guilty financiers go free than that one innocent financier suffer, eh? :^)

B) Regardless of whether they caused a “$6 trillion implosion” or not (I’d suggest a $6 trillion bubble that let nearly everybody live a bit better than was sustainably possible for a couple of years before *inevitably* imploding), if what they did is not, in fact, illegal, then you have no grounds to cause them to go to jail. Right? Or are you just interested in getting somebody in there regardless of the law? :^)

CBBB August 9, 2013 at 10:47 am

What a bunch of horse&5$%% most of these Russian “entrepenuers” are just corrupt former-politicans, oligrarchs, and bueacrats who threw in their lot with the wrong team. And people where do “nobodies who read too much Ayan Rand and think they’re somebodies” (such as yourself) fall into that list?

Andrew' August 9, 2013 at 1:32 pm

Huh?

Did you miss the part where some of these people are victims of bureaucrats being bribed to persecute them. When all are corrupt you have to play the game, but in this case, according to the description, it is the lesser corrupt who are victimized because they are less corrupt and didn’t bribe the politicians enough.

Skip Intro August 9, 2013 at 9:21 pm

Putin is on the left?

DW August 9, 2013 at 7:14 am

In mother Russia, Heavens shrug Atlas!

Thor August 9, 2013 at 7:26 am

+1!

mishka August 9, 2013 at 7:14 am

Nice hit job. Calling a jail “Gulag”? Why not just go straight to “concentration camp”?

dan1111 August 9, 2013 at 8:16 am

Given that it literally is the same camps that made up the Soviet Gulags, I don’t see the problem here.

derek August 9, 2013 at 9:37 am

And probable the same apparatchiks who send them there.

Turkey Vulture August 9, 2013 at 7:33 am

Yep. The American Penal System is far more humane, reasonable, and restrained.

anon August 9, 2013 at 9:07 am

Hey! We have the highest rate of incarceration in the world!

What’s not to be proud of?

“The number of inmates in state and federal prisons decreased by 1.7 percent, to an estimated 1,571,013 in 2012 from 1,598,783 in 2011, according to figures released by the Bureau of Justice Statistics, an arm of the Justice Department.”

http://www.nytimes.com/2013/07/26/us/us-prison-populations-decline-reflecting-new-approach-to-crime.html

mishka August 9, 2013 at 7:39 am

Madoff goes to jail. Translation for NYT: an entrepreneur gets lost in Gulag

dan1111 August 9, 2013 at 8:21 am

So, then why is Putin planning to set thousands of Bernie Madoffs free from jail?

Andrew' August 9, 2013 at 9:15 am

Because he’s a swell guy.

Alan Gunn August 9, 2013 at 7:56 am

Russia isn’t the only country where the police accuse people of crimes and then take money for letting them go.

http://www.newyorker.com/reporting/2013/08/12/130812fa_fact_stillman?currentPage=all

Affe August 9, 2013 at 8:25 am

+1 – talk about “werewolves in epaulets”.

anon August 9, 2013 at 9:10 am

Oh come on.

Heck, in America the police don’t even have to accuse you of a crime! See “civil asset forfeiture

Mark Thorson August 9, 2013 at 10:18 am

Nobody was accused of crimes in those cases of civil asset forfeiture. The Russians should read that article. They’ll realize how crude and primitive their governmental theft is, compared to ours.

Alan Gunn August 9, 2013 at 3:17 pm

OK, here’s one where they threaten to arrest you unless you cough up. We are very versatile. I bet the Russians don’t even have red-light cameras yet.

http://www.bloomberg.com/news/2013-08-07/how-the-lone-star-state-legalized-highway-robbery.html

Mark Thorson August 9, 2013 at 7:22 pm

The Russians probably aren’t familiar with the notion that you can just confiscate assets without a crime being committed or charged. When they adopt this practice, I suggest they name it “Americanization”, as in “We Americanized your Mercedes.”

Rich Berger August 9, 2013 at 8:16 am

Now if we could just apply the Russian approach to the Forbes 400, our inequality problem would be solved.

Rahul August 9, 2013 at 8:29 am

A business owner in Russia has a better chance of ending up in the penal colony system once known as the gulag than a common burglar does.

How is that statistic, by itself, scandalous? Perhaps Russian burglars net an average booty of $100 and the average businessman committed tax fraud of $10,000.

What’s the moral calculus that says burglary is more worthy of jail time than a white collar offense of a higher net monetary value.

dan1111 August 9, 2013 at 8:49 am

Except that all business owners (not just those who commit crimes) are being compared to burglars.

Andrew' August 9, 2013 at 9:11 am

Luckily, in the US until recently this side-business between cops and criminals has been limited to the victimless crimes of drugs and sex. But with the new total information, 6 degree separation crimes of being associated with a business who does business with someone who does business with someone who does business with someone who does business with someone who is accused of knowing someone who does business with someone who made a cash transfer to someone who does business with someone who launders money through a legitimate business with someone who once wrote an e-mail criticizing the US, combined with ad hoc enforcement, who the heck knows?

KLO August 9, 2013 at 9:48 am

Does this even fit the definition of extortion? To me, this sounds more like the police are moonlighting on behalf of corrupt business owners. What if a business person does not pay the demanded fee? His rival is not unlawfully jailed? Maybe these so-called businessmen are not completely honest and ethical. A terrible accusation, I know.

William August 9, 2013 at 12:00 pm

Corrupt policemen, bribed by corrupt businessmen, throwing their corrupt rivals in jail. How corrupt!

Michael August 9, 2013 at 12:28 pm

word on the street is, Russian legal system is such that no businessman is “innocent”. If you were try follow all the laws and regulations they got, you would be out of business. So the natural result is anarcho-tyranny of selective enforcement against those who cannot pay up, make a deal or otherwise stay under the radar. The triumph of justice against evil Madoff (Corzine?) it is not.

dirk August 9, 2013 at 1:51 pm

Here’s the question for economists: is Russia really worse off under the guise of “capitalism” than they were under the guise of “communism”? Communism only fell after commodity prices hit rock bottom. Capitalist Russia seems to have only risen to the extent commodity prices have. Is the median Russian worse or better off now?

dirk August 9, 2013 at 1:56 pm

Bonus question: is America now better or worse off because the Soviet Empire fell? I’d personally rather we were still fighting the cold war than the current war against Americans.

Mark Thorson August 9, 2013 at 4:56 pm

They American people are the enemy. They must be crushed, subdued, beaten down — in the name of national security. Anyone who disagrees with that is a terrorist.

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