Violence and Economy Building

Vadim Volkov's "Violent Entrepreneurs" has an interesting discussion of protection rackets in the Russian economy. An interesting point is that Russian business and oranized crime have become symbiotic. Once a gang provides "protection" to a business, the gang considers the business their "turf" and becomes dependent on the income from the business. Eventually, gangsters come to guarantee transactions of the businesses they protect, a sort of underwriter that facilitates business. Volkov points out that a later wave of ex-army "protectors" came to provide a more legitimate, institutionalized form of protection against these earlier gangsters, which in turn opens the door for the reclaiming of the Russian state's monopoly over violence. Robert Cottrell has a nice discussion in his New York Review of Books essay.