
1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen - srgseg
http://www.bbc.co.uk/news/business-13546177
======
asciilifeform
_Then he bought two old Soviet dairy farms._

This sentence is the key to understanding why many Russians feel little or no
sympathy for "victims" like him.

Soviet dairy farms once belonged to the Soviet people - in much the same way
that, say, the Washington Monument, the US National Parks, or the US Army
_belong_ to the people of the United States. How would you feel if the most
hardened violent criminals came to power in the US, and arranged to have these
properties turned over to private owners, to run for their benefit (or to
pillage and destroy, as was the fate of most Soviet industry) ?

One can debate the practical merits of planned economies all day long but this
does not change the fact that _privatization is theft._ The former owners of
Soviet facilities - the Soviet people - were not adequately compensated for
their loss. It is highly doubtful that fair compensation for the privatization
of public property is possible _even in principle._ Do you dole out
homeopathic-sized shares of stock? (Criminals buy them back for pennies-on-
the-dollar from the masses in lean times - or at gunpoint...) What do you
issue to the not-yet-born citizens who will no longer be heir to the means of
production? (Answer in practice: zilch.)

Privatization is "what's mine is mine and what's yours is mine" writ large,
plain and simple.

Russians who are not in some way aligned with the thieves' guild which has
been running that country since the Soviet collapse by and large quietly
recognize this fact. This is why sympathy and political support for the so-
called "entrepreneurs" is and will continue to be thin.

~~~
lionhearted
> One can debate the practical merits of planned economies all day long but
> this does not change the fact that privatization is theft.

No, it's not. Theft is theft. Privatization is privatization.

There's been some pretty poorly implemented privatizations in history, but
also some decent ones. I'm in Mongolia now, and they did an okay job of it -

<http://en.wikipedia.org/wiki/Mongolian_Stock_Exchange>

Still imperfect, but much better than the clusterfuck that was communism.

Seriously, everyone remotely educated in an ex-communist country hates
communism. I've been to most of them - Cambodians, Chinese, Mongolians,
Ukrainians, Czechs... it's only people who live in the outstandingly,
legendarily prosperous West that wax poetic about the horrors of that era.

Seriously, I've seen a lot of it firsthand. I've also been to still-somewhat-
communist places like Vietnam, and they operate a hell of a lot worse than
their neighbors.

Anyways. Generally speaking, trying to repair a massive, systematically flawed
system is hard. It's like how the tax breaks on mortgage interest screw up
American housing prices, making it so high earners have more of an incentive
to buy housing, thus locking younger people, lower earning people, and senior
citizens out of housing, or making them pay inflated prices.

It's screwed up. It's a bad system. But unwinding it now would cause a
cascading set of problems in the housing market. Thankfully, that poor system
of incentives is limited to one sector of the American economy, whereas
communism pretty much systematically destroys innovation, free thought,
invention, and any semblance of sanity and order.

Seriously, go compare equivalent communist and non-communist countries. West
Germany and East Germany, Taiwan and PRC, Cambodia/Vietnam and
Thailand/Malaysia/Singapore (not perfect comprables, but close-ish). Hong Kong
and PRC.

Oh yeah, and North Korea and South Korea.

Communism sucks. Unwinding a broken system is hard to do, but thank god
they're trying to move past communism.

Edit: Lots of upvotes and lots of downvotes. To the people downvoting, look -
Hacker News is, what, 80%+ Western Europe, USA, and Australia?

If you're sitting at your computer in San Francisco, you've never been further
out of the States than Cancun, and you've gotten your worldview from some
professor of Postcolonial Studies that also has never gotten outside of San
Francisco, then I don't know what to tell you. Seriously, stop and reflect for
a moment. Communism actually fails in real life. And I don't mean fails the
way AT&T's customer service fails. I know it's not a realistic short term
suggestion, but if you get the opportunity, check out Cambodia, the Killing
Fields, and Security Center 21. Check out Saigon, and note that much of the
infrastructure hasn't been replaced since the Fall of Saigon in 1975 (the fire
hydrants are still almost all American-made - when they've occasionally
failed, they're just removed and not replaced). Compare West Berlin and East
Berlin for a stark contrast.

Seriously. I don't know what to tell you. Communism is really, really bad. If
you're in the West and have never left the West, you don't understand and
can't understand. Go through a few of these countries critically, yes on
paper, but also in the real world and see how bad things were, and how much
better they are in sane places with private property and rule of law. I'm not
writing this for my health - if you currently are sympathetic to forced-
collectivism, I'd really encourage you to look at how it's turned out
historically. If you're sympathetic to communism, I'd like you to stop that,
because I think it's destructive the same way that believing in religious
violence is destructive.

~~~
grigory
No offense, but you sound like a broken western propaganda record. Having been
born in USSR, I know a lot of highly educated people that grew up, went to
universities, and built various careers in the USSR. While none think
communism is perfect, or even worked in that particular case, it has a lot of
merits and these people recognize them.

As Putin said, (paraphrased) "anyone who doesn't miss Soviet Union doesn't
have a heart; anyone who wants to bring it back doesn't have a brain." I think
this reflects well people's feelings towards the regime. It didn't work in the
long run, but it wasn't all bad - far from it.

~~~
ido
I'm surprised Putin paraphrased Mussolini (anyone who isn't a socialist as a
teenager doesn't have a heart, anyone who is still a socialist as an adult
doesn't have a brain)...

------
olegious
"1 in 3 prisoners are businessmen." Bullshit. The reporter probably misquoted
his source or "Business Solidarity" is simply pulling numbers out of their ass
for shock value- BBC has never been a friend of Russia so is happy to report
non-sensical numbers without further elaboration.

While it is true that corruption is Russia's biggest problem, the numbers
quoted make no sense. I know people on both sides of the coin- small and large
businessmen, tech entrepreneurs and high ranking FSB/military officials, so I
know a little bit about what's happening.

edit: Another piece of the article that screams of embellishment- "small
flat"- no Russian businessman that owns a 300+ employee enterprise would be
living in a "small flat."

------
ilitirit
> Business Solidarity, an organisation that works to protect small
> businessmen, estimates that one in six Russian entrepreneurs is in jail, and
> that one in three prisoners in Russia is a businessman.

How on Earth did they come up with that estimate?

~~~
mathrawka
No idea, but after reading that article... I don't think the numbers really
matter. If all the facts in the story are right, then one man will be away
from his children for 5 years, just because he didn't want to be strong-armed
out of his business.

That is enough for me to realize that something is very wrong with Russia.

~~~
guard-of-terra
We have to look at numbers (and look at how these numbers are calculated)
because else we're the are hand-waving and permanently-shocked.

It's obvious that you can find some atrociously bad things happening in any
place on earth. The interesting question is the general quality of life.

------
stygianguest
In a way, the same could probably be said of American entrepeneurs. Drugs is a
business, an illegal one, but still business. Imagine the (potential) talent
wasted, although perhaps the talented ones don't get caught.

~~~
wisty
Bullshit semantics. Drugs are not legal. They are in jail for breaking the
law, and possibly destroying the lives of addicts. Not creating jobs, and
resisting a corrupt shakedown.

You can run a legal business in the US with only a tiny chance of being
imprisoned for it.

~~~
radu_floricica
I'm not flirting with the "true Scotsman" here, but the problem is the
definition of what is legal. I'm positive Dmitry Malov did break a number of
laws - as an entrepreneur in an ex-communist country I understand very well
that this is unavoidable. The problem is that the law is designed to be
broken, in order to facilitate corruption - something no country is completely
immune to.

This is not very different from drugs, either. I still have to see a clear
study that marijuana is more harmful then either tobacco or alcohol, and that
it's not merely an accident of history supported by commercial and political
interests that it is now illegal and the other two aren't. Not as bad as
blatant corruption, true, but not semantics either.

~~~
wisty
OK. But you do know that selling pot is illegal, right? As do other drug
dealers. Businessmen in every country know they will inadvertently break a few
rules, but try to avoid it.

As for the legality of drugs, while I'm anti-drug, I think they should be
legal. At least then they can be controlled. Besides, enforcement is often too
spotty. The last three Presidents most likely used drugs, but nobody seems to
care. Just don't apply for a government job if you want to be honest about it
:)

And then there's the difference between manufactured drugs, imports, and home
grown; and the type of criminal organizations they support. I don't really
care about some dropout growing herbs for college kids, but other drugs funnel
large amounts of money to criminal organizations, who spend it on turf wars.

That's the question, isn't it? Are these "businessmen" just growing illegal
plants in a greenhouse, or are they also shooting their rivals outside
schools? I guess it depends on the case.

~~~
Jach
> That's the question, isn't it? Are these "businessmen" just growing illegal
> plants in a greenhouse, or are they also shooting their rivals outside
> schools? I guess it depends on the case.

Are Cartier et al. just selling pretty rocks to vain women, or do their blood
diamonds help fund militants in foreign countries? Pretty much any business,
legal or illegal, can be construed to contribute or possibly contribute to
some undesirable event. Most people don't care about Windows being used to
look up cat pictures, but should we care about Windows being used to power
nuclear submarines? How about all those "Wall Street folk"? Why are some
businessmen in jail and others aren't, even for exactly the same crimes? etc.
etc.

------
startupstella
it's always interesting to see non-Russians comment on this kind of news. for
Russians well aware of rampant corruption in post-Soviet countries, it's more
of an eye roll than anything else. Russia is infamously corrupt as a result of
the legacy of Soviet mentalities that made free market enterprise inherently
black market. until the justice system is cleaned up and held accountable,
russian will remain a corrupt 3rd world country unable to compete in the
global business rena.

~~~
Simon_M
So are 1 in 3 prisoners corrupt businessmen who have been jailed for their
'corruptness'.

Or are 1 in 3 prisoners businessmen unjustly jailed due to corrupt officials?

~~~
jeffool
Can't there be a mix? Maybe each is 1 in 6?

------
adaml_623
The Transparency International reports on corruption are an interesting
insight into how widespread these issues are. A lot of corruption grows on the
'everybody does it' mentality.

[http://transparency.org/policy_research/surveys_indices/cpi/...](http://transparency.org/policy_research/surveys_indices/cpi/2010/results)

~~~
radu_floricica
Please, please don't suggest it's the fault of the people paying the money.
It's a system problem, and it's clearly encouraged from the top. I've seen it
happen in many contexts...

~~~
iwwr
In many instances, it's the cost of doing business or securing an otherwise
legitimate service.

Of course, there are those paying bribes to trip up the competition or to
secure protection from obvious crimes (like theft, murder etc). But for
ordinary citizens, paying a bribe is an escape valve from an otherwise rigid
bureaucratic dictatorship.

The solution is not to crack down on corruption (except perhaps those 'obvious
crimes'), but to eliminate the bureaucracy fostering it.

Normally, bureaucracy was invented to ensure continuity of government even
with changing political leaders. You need something to keep track of expenses
and procedures on how to make decisions. But that creature grew like an
octopus, engulfing ever greater portions of society. This stranglehold must be
eliminated and not just reformed or offloaded into big web portals.

------
guard-of-terra
Does that mean that Russia has twice as much enterpreneurs as prisoners?

It's interesting how this article seem to already raise much more interest on
news.yc that the recent russian IT IPO with 8B valuation.

I'd take it with a grain of salt if I were you. My mother owns a small cloth
store in a town near Moscow and I'm positive that: \- She's not afraid \- She
doesn't "share her profits with the police and people from the tax
authorities" \- Still she blames the amount of paper she have to submit
(taxes, pension funds etc) and how careless then they interpret those papers.

~~~
VladRussian
>She's not afraid - She doesn't "share her profits with the police and people
from the tax authorities"

to say what you don't know what you're talking about would be underestimation.
You don't _want_ to know, and as result you don't know. Like ostrich you like
to keep your head in the sand and afraid to look around.

Several weeks ago you was claiming till foam in your mouth that your employer
- Yandex - doesn't share personal email and other users' information with FSB.
You called it "conspirology". Moron. A few days after that Yandex officially
reported doing it so.

<http://www.bbc.co.uk/news/business-13274443>

You're brainwashed by current Putin's regime, and as result your credibility
about Russia is below 0, as i already told you so.

~~~
guard-of-terra
First, you're doing an ad hominem attack right now against me - right now.
This is sad.

"Several weeks ago you was claiming till foam in your mouth that your employer
- Yandex - doesn't share personal email and other users' information with
FSB."

Care to provide a link? Because if you don't, you have an acute case of lying,
you should see a doctor for that.

I would even be so kind to provide a link to our previous discussion:
<http://news.ycombinator.com/item?id=2452184> Quotes are welcome.

Overall, you're behaving like a bitter and unpleasant person. You know
everything even when not been exposed to the subject for several years; I know
nothing and is an ostrich and my experience does not really matter; And I am
also a moron.

There is a word for your behavior, and it is "butthurt".
<http://www.urbandictionary.com/define.php?term=butthurt>

------
adaml_623
British understatement: "Doing business in Russia is notoriously difficult".

It will be interesting to see Russia's progress over the next couple of
decades and see whether the problems with corruption get worse before they get
better.

~~~
guard-of-terra
Isn't it equally interesting to look at the two decades just passed? Nobody
does. Of course, future is always more interesting because you can theorize
instead of analyze, but in the next couple of decades it would turn boring
past, too.

~~~
adaml_623
Of course we look at the past. But how would you summarise the last 2 decades
in the ex-USSR region from the point of view of 'Business Friendliness'. Is it
getting better or worse? Are our standards changing, I certainly hope they
are.

~~~
guard-of-terra
\- There is an actual economy (there wasn't after the collapse of USSR)

\- It is possible to run a "white" business paying taxes and social securities
(During the 199x it was possible to add up all taxes on profit and get e. g.
102%, meaning that you have to pay 102 roubles in taxes for every 100 you
earn:)

\- There were all sorts of organized crime. They are no longer. (At least they
never intervene with the normal leagal business these days. Because I
understand how "There is no longer any organized crime" would be seen as
overstatement).

There are surely still many problems, but you just can't compare.

------
hartror
Corruption is the scourge of the developing world, there is a significant
drive in India to try to stamp out the practice but they have a long way to
go. Organizers of the Indian Commonwealth games are embroiled in corruption
scandals that have greatly embarrassed the country.

~~~
dimmuborgir
Apples and oranges. We're talking about corporate entrepreneurs and you're
talking about games organisers who are/were on government payroll. Corporate
scandals in India are almost unheard of. (Satyam fiasco is an exception
though)

~~~
khafra
What about the rumors that Monsanto bought its way into a near-monopoly there,
with the consequent small farmers committing suicide in droves as they lose
everything?

------
spenvo
If there's no safe harbor for legitimate businesses, then it makes sense
Russia would be one of the world's leaders in cyber-crime.

------
kjw
Funny conversation in the office:

"A combination of excessive bureaucracy and corrupt officials makes it a
hazardous enterprise."

Isn't that the same in the US?

Yes, except - in America, the government bribes business; in Soviet Russia,
you bribe the government.

------
I-RIGHT-I
"How on Earth did they come up with that estimate?"

What does it matter when the "interesting thing is the quality of life" and
when “the same could be said of American entrepreneurs" who deal drugs? The
truth of the matter and the logical conclusions drawn from the example are
lost on the all to willing ignorant. Too many Americans are contemptuous of
their own freedoms.

------
known
In India entrepreneurs face similar harassment if you're not from
<http://en.wikipedia.org/wiki/Forward_caste> community

------
known
Hope <http://www.fairtrials.net/> can help them out.

------
askar_yu
actually it's the same situation in most (if not all) Post-Soviet countries.

~~~
andrest
With all due respect, if you truly believe what you're saying you don't know
what you're talking about.

A good counter example would be Estonia. But what's a good argument without
data, right?

<http://www.heritage.org/index/country/estonia> Ranks 14th on the Economic
Freedom Index? Well, what about other European countries: Italy 87th (ALL the
figures are more negative for Italy, including corruption, property rights,
business freedom), Japan 20th, Austria 21th, Portugal 69th.

[http://www.transparency.org/policy_research/surveys_indices/...](http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results)
The Corruption Perception Index puts Estonia above Portugal and Spain. Just
for comparison, Russia has a score 2.1 out of 10, Estonia has 6.5.

I would've thought that on HN people give their arguments more thought,
especially if it makes such strong accusations. These countries are advancing
rapidly, the Post-Soviet countries have been independent for under 20 years.
Yet they already surpass older EU members.

~~~
olalonde
Estonia and Italy are indeed the exceptions that confirm the rule.

~~~
pnathan
Italy was never a Soviet country....?

~~~
olalonde
Exactly, they are both an exception in their respective group.

------
Fice
> 1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen

The title is pure FUD.

~~~
vog
_> The title is pure FUD._

Would you care to elaborate?

~~~
kds
One Possible Elaboration, Part I: (without claims for the _absolute_ truth
attached to it)

The biggest nightmare in the minds of the ruling class in the anlgo-saxon
world (chief US and UK political and business powers) is that Russia might
create an Eurasian political and economic union with Germany and France (and
EU generally), with high mutual economic, political, military and cultural
benefits.

That would mean huge loss of markets, power and influence for Washington and
London. There are such tendencies, no matter how improbable in the short-term
they look to the casual political observer who doesn't follow closely what's
really going on.

So in a certain way the Cold War is needed (if not required) to continue, even
after pretending it is something of the past.

One PR-related _nasty_ form of this war - only _bad_ news or _no_ news allowed
from Russia in the _mainstream_ western media. The less people think Russia,
Russian, (or even just Russians) are notions you could attach nice, friendly,
good-minded connotations, the better!

The president Putin really pissed-off the western state and big-business
powers that in a period of rising petrol/gas prices in 2000s they couldn't
extract the tens of billions $ they used to do easily in the 90s - back then
with the help of the local oligarchs enriched overnight by criminally grabbing
ownership of state economic base and infrastructure they themselves had not
built in the preceding decades.

Putin even had the temerity to use the extra-profits for increasing the
country's living standard and modernizing the armed forces - one of the 3 to 5
really formidable military organizations in the world.

And he started doing the really unthinkable - gently probing EU, Asian and
African (think Libya) countries for this disgusting idea of selling energy
resources for currencies other than the $. (And this in times of this self-
inflicted financial crisis.)

On the [re]New[ed] Cold War - just a few points of thought or questions for
someone to ponder over, if really interested:

How come NATO still exists when its mirror-antagonist military organization of
the former socialist EE-countries from the soviet block has gone to history,
dissolved peacefully and voluntarily?

Why are there still US military bases (old and new) across the EU-countries
today since Gorbachev retreated back the Russian/Soviet armed forces from East
Germany and Eastern Europe?

Why was the Gorbachev's 80-year jubilee held in London? If he was uniformly
acknowledged as such a good doer to humanity and democracy why wasn't that an
event held in his home country and among his own people proud of him?

What does the average ordinary Russian think of Gorbachev? Actually who was
robbed and who profited from the neo-liberal economic policies he had been
instrumental to be installed in Russia?

(continues...)

~~~
phishphood
russian army is not formidable military organizations and hasn't been since
1970s, may be earlier. the only thing formidable is the level of corruption.
There was an article few days ago that they feed dog food to their conscripts.
The only thing that keeps them being taken seriously is the nuclear threat,
which they parade (literally) every single opportunity they get

~~~
olegious
the not formidable Russian army made mincemeat out of the US backed Georgian
army a few years ago.

------
SkimThat
TL;DR - According to Business Solidarity, one in six Russian entrepreneurs is
in prison, with one in three total prisoners being classed as a businessman.

One example is a dairy farmer who refused to sell his thriving business to an
unknown buyer at the request of Russia’s interior security service. After
repeated threats, he was accused of fraudulently using a bank loan and
sentenced to five years in prison.

Not all businessmen end up in jail, as an estimated 60-80% don’t complain,
share their profits and bribe officials.

~~~
colanderman
Wait... is this a _novelty account_ on HN? I feel like I've just seen the
first horseman of the apocalypse.

~~~
rms
But... it's useful. :o

~~~
bh42222
But there's a high cost to this kind of "usefulness".

~~~
rms
I don't even know anymore.

