[109229] in Cypherpunks
Re: NGOs and the Indulgence Racket
daemon@ATHENA.MIT.EDU (Robert Hettinga)
Sun Mar 14 16:50:40 1999
Date: Sun, 14 Mar 1999 15:04:57 -0500
To: cypherpunks@cyberpass.net
From: Robert Hettinga <rah@shipwright.com>
Reply-To: Robert Hettinga <rah@shipwright.com>
--- begin forwarded text
From: hapgood@pobox.com (Fred Hapgood)
To: "Phillip Hallam-Baker" <hallam@ai.mit.edu>
Cc: "Dale R. Worley" <worley@ariadne.com>, <dcsb@ai.mit.edu>
Subject: Re: NGOs and the Indulgence Racket
Date: Sun, 14 Mar 1999 15:46:31 GMT
Sender: bounce-dcsb@ai.mit.edu
Reply-To: hapgood@pobox.com (Fred Hapgood)
>
>But if the infrastructure ain't there, it ain't there. Case in point, the
>attempt of Russia to become a market economy by government
>dictat.
I just recently came back from a week in St. Petersburg, where
I found at least the consumer end of the market thriving. The
city is chock-a-block with 'kioski' -- stores with a couple
hundred square feet of floor space or less -- selling everything
you can think of that can be carried away (bread, meats, tobacco,
porn, pharmaceuticals, stationary, gambling, liquor, boots...).
Come up out of the metro and there will be forty of these stores
clustered around the station. Walk a km down the street and there
will be ten more, grouped into a kind of nanomall. Across the city
as a whole there must be something like 10,000 of these stores;
probably more. Across the country as a whole -- let's just say
that there is clearly a huge experiment going on in Russia in
total-immersion entreprenurial education.
What was most interesting was that the locals tell me that
all this activity depends on the mafia, which protects it from
rapacious government officials, provides what regulation is
necessary to an orderly business environment, and acts as a bank,
supplying credit.
To take these points one at a time: as everywhere in Russia there
are three tiers of governments in St. P: three tiers of taxmen and
health inspectors, etc., all of them as corrupt as the mafia but far
less disciplined. If the businesses had to face these hordes alone
they would succumb in days. The mafia sees to it that this doesn't
happen.
Second, the mafia imposes price controls for a given cluster of stores
so that two neighboring kioski selling the same products don't bankrupt
themselves with price wars. There is price competition, but it is
among clusters, and between small stores and large ones, not between
stores within clusters.
My evidence about the mafia supplying business loans is more indirect,
since none of my informants had ever received one themselves. They
think it happens but maybe it doesn't. On the other hand, why wouldn't
it?
There are several ways of interpreting this story from the point of
view of the present discussion, and I will outsource that job to the
discussants.
Fred
http://www.pobox.com/~hapgood
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--- end forwarded text
-----------------
Robert A. Hettinga <mailto: rah@philodox.com>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
