After the Rain : how the West lost the EastVaknin, Samuel
History
After the Rain : how the West lost the East
Vaknin, Samuel
Europe, Eastern -- Economic conditions -- 1989-; Europe, Eastern -- Politics and government -- 1989-
The national economies of the world can be divided to the scavenger and
the predator types. The former are parasitic economies, which feed off
the latter. The relationship is often not that of symbiosis, where two
parties maintain a mutually beneficial co-existence. Here, one economy
feeds off others in a way, which is harmful, even detrimental to the
hosts. But this interaction - however undesirable - is the region's
only hope.
The typology of scavenger economies reveals their sources of sustenance:
Conjunctural - These economies feed off historical or economic
conjunctures or crises. They position themselves as a bridge between
warring or conflicting parties. Switzerland rendered this service to
Nazi Germany (1933-1945), Macedonia and Greece to Serbia (1992 to the
present), Cyprus aided and abetted Russia (1987 to the present), Jordan
for Iraq (1991 to the present), and now, Montenegro acts the part for
both Serbia and Kosovo. These economies consist of smuggling, siege
breaking, contraband, arms trade and illegal immigration. They benefit
economically by violating both international and domestic laws and by
providing international outcasts and rogues with alternative routes of
supply, and with goods and services.
Criminal - These economies are infiltrated by criminal gangs or
suffused with criminal behaviour. Such infiltration is two phased: the
properly criminal phase and the money laundering one. In the first
phase, criminal activities yield income and result in wealth
accumulation. In the second one, the money thus generated is laundered
and legitimised. It is invested in legal, above-board activities. The
economy of the USA during the 19th century and in the years of
prohibition was partly criminal. It is reminiscent of the Russian
economy in the 1990s, permeated by criminal conduct as it is. Russians
often compare their stage of capitalist evolution to the American "Wild
West".
Piggyback Service economies - These are economies, which provide
predator economies with services. These services are aimed at
re-establishing economic equilibrium in the host (predator) economies.
Tax shelters are a fine example of this variety. In many countries
taxes are way too high and result in the misallocation of economic
resources. Tax shelters offer a way of re-establishing the economic
balance and re-instating a regime of efficient allocation of resources.
These economies could be regarded as external appendages, shock
absorbers and regulators of their host economies. They feed off market
failures, market imbalances, arbitrage opportunities, shortages and
inefficiencies. Many post-Communist countries have either made the
provision of such services a part of their economic life or are about
to do so. Free zones, off shore havens, off shore banking and
transhipment ports proliferate, from Macedonia to Archangelsk.
Public-domain text, read in full here on John Shaqi.
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