Violent Entrepreneurs

Volkov, Vadim. 2002. Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism. Ithaca, NY: Cornell University Press.

Vadim Volkov’s extremely impressive book details how an entire class of “violent entrepreneurs” became the handmaidens of the Soviet transition to capitalism and the reconstitution of the Russian state in the 1990s. The fall of the Soviet regime, argues Volkov, created a situation of near-Hobbesian proportion in which no central authority could maintain control over the use of force. Violence became the main resource through which both a burgeoning capitalist system and a teetering government were consolidated. Several sorts of everyday cultural infrastructures were repurposed in this violent political and economic transition: from previous criminal traditions to disenfranchised athletes—wrestlers, boxers, martial artists—and other specialists in violence (e.g. war veterans, disaffected military officers). These violent entrepreneurs not only enriched themselves, they also provided the necessary protection and market conditions needed for market relations. They became both enforcers and owners of capital. And eventually the state managed to absorb some of their institutional innovations.

Athletes started small under the Soviets. With the introduction of increasing capitalist reforms in neighborhood markets, they began extorting local market vendors. “In a sense, the gym and the market were at the origin of a peculiar local capitalism: the small business provided the economic base for the new gangs and the latter supplied ‘protection’” (15). Eventually, everybody had to pay someone. Violent entrepreneurship is basically this practice of income-earning violent force. The “racket”—we’ll protect you or else… both threat and protection—was the preferred arrangement (25). Or as Volkov puts it: “Violent entrepreneurship can be defined as a set of organizational solutions and action strategies enabling organized force (or organized violence) to be converted into money or other valuable assets on a permanent basis” (27, emphasis added).

In their eyes, their openness and “permanence” as “legitimate” businessmen distinguished them from Russia previous thieving tradition known as vorovskoi mir, while the new criminal groups were more like bandits (though not resembling Hobsbawm’s version). “Thus, if the world of thieves is a product of the strong repressive socialist state, the world of bandits emerges from the illegal use of violence under the conditions of weak state-capitalism” (60).

Although the final throes of the Soviet era proved a key training ground, the practice of violent entrepreneurship could not really take off until the massive expansion of the private sector after 1992. “By then, criminal groups had accumulated sufficient power resources, finances, and experience to participate in the economic transition” (41). In the transition, criminal groups were enlisted “to solve questions,” as they saying went (49). They extorted, framed, and swindled, but they also obtained licenses, registrations, permits, information, and a host of other tasks that in other contexts would be the mundane requirements of business, but that in Russia the government itself was utterly incapable of doing so (50). As criminal groups developed they also enforced contracts, provided business intelligence, brokered negotiations, recovered debts, and provided investment security (87-96).

“Protection” is the work of “violence-managing agencies,” which can range from illegal to legal and from public to private; for instance, the state is normally conceived as both a legal and public violence management agency. Volkov’s typology notes four varieties:

  • private and illegal (organized criminal groups
  • nonstate and legal (private protection companies)
  • state and illegal (paramilitary)
  • public and legal (the state itself)

Nonetheless, Volkov writes: “Explanations of the activities of criminal groups… should be sought not in the groups themselves, in their legal status, or in the people that compose them, but in their interrelations and practices, determined by the opportunities opened by the merging market and the failing state” (76). He now defines of a violence managing agency, which he defines as “any human community that commands organized force and manages this key resource in such a way as to make it the source of a permanent income, eventually by establishing control over a local economy” (108). In time, he claims that managers of violence became impelled toward making their operations legit by introducing a more efficient property regime and changing their status before the law and public opinion (108).

As wielders of force become owners of capital, and especially in cases where they take part in its management, their ability to control their domains comes to depend on the logic and riles of economic activity. To put this dialectic in concise form, the more the criminal groups strive to control the emerging markets, the more the markets control and transform these groups. (122)

Violence managing agencies not only became absorbed into the (legal) private sector, they were also functionally accommodated by the state. With government approval, security officials from what were informally known as the “power ministries” in the Soviet Union began churning out a series of private protection firms—a de facto acknowledgement of the commodification of protection amid the new market system. The private security companies began acting out what the criminal groups had done so well—what Volkov termed an “enforcement partnership.”

By “enforcement partnership” I mean the function of a violence-managing agency (a criminal group, a private protection company, or a similar organization) devolving from the skillful use of force and information on a commercial basis that allows an institutional environment of business activities to be maintained for its client enterprises. (41)

Such unexpected outcomes in which the state becomes much more consolidated are what Volkov considers aspects as state formation. Violence is (in name at least) monopolized by the state, if also privatized in the hands of the private sector. Meanwhile, tax policies are on the books, though they are predatory and largely responsible for a vast shadow economy. The business climate is improved, while criminal ownership is relatively reduced. Volkov says such conditions are much more signals of a quiet stalemate, rather than a definitive de-criminalization of the state and economy—a conclusion that in recent years has been resoundingly confirmed, despite periodic shows of the government getting tough on organized crime.

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