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-
Many of the so-called Economies in Transition and of HPICs (Highly
Indebted Poor Countries) do resemble post-nuclear-holocaust ashes. GDPs
in most of these economies either tumbled nominally or in real terms by
more than 60% in the space of less than a decade. The average monthly
salary is the equivalent of the average daily salary of the German
industrial worker. The GDP per capita - with very few notable
exceptions - is around 20% of the EU's average. These are the telltale
overt signs of a comprehensive collapse of the infrastructure and of
the export and internal markets. Mountains of internal debt, sky-high
interest rates, cronyism, other forms of corruption, environmental,
urban and rural dilapidation - characterize these economies.
Into this vacuum - the interregnum between centrally planned and free
market economies - crept crime. In most of these countries criminals
run at least half the economy, are part of the governing elites
(influencing them behind the scenes through money contributions,
outright bribes, or blackmail) and - through the mechanism of money
laundering - infiltrate slowly the legitimate economy.
What gives crime the edge, the competitive advantage versus the older,
ostensibly better established elites?
The free market does. Criminals are much better equipped to deal with
the onslaught of this new conceptual beast, the mechanism of the
market, than most other economic players in these tattered economies
are.
Criminals, by the very nature of their vocation, were always private
entrepreneurs. They were never state owned or subjected to any kind of
central planning. Thus, they became the only group in society that was
not corrupted by these un-natural inventions. They invested their own
capital in small to medium size enterprises and ran them later as any
American manager would have done. To a large extent the criminals,
single handedly, created a private sector in these derelict economies.
Having established a private sector business, devoid of any involvement
of the state, the criminal-entrepreneurs proceeded to study the market.
Through primitive forms of market research (neighbourhood activists)
they were able to identify the needs of their prospective customers, to
monitor them in real time and to respond with agility to changes in the
patterns of supply and demand. Criminals are market-animals and they
are geared to respond to its gyrations and vicissitudes. Though they
were not likely to engage in conventional marketing and advertising,
they always stayed attuned to the market's vibrations and signals. They
changed their product mix and their pricing to fit fluctuations in
demand and supply.
Public-domain text, read in full here on John Shaqi.
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