1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen

http://www.bbc.co.uk/news/business-13546177

by srgseg • 15 years ago

268 230 15 years ago

bbc.co.uk

hartror2• 15 years ago

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• 15 years ago

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)

khafra3• 15 years ago

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?

hartror2• 15 years ago

Eh? I thought we were talking about corrupt government officials?

ilitirit• 15 years ago

> 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• 15 years ago

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-terra14• 15 years ago

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.

andrest4• 15 years ago

How did they come up with the estimate? http://www.youtube.com/watch?v=1eixjRLlvtk (full documentary can be found on YouTube)

Having had some business interests in the same region I can tell you from first-hand experience that people like the Russian gentleman living in France are VERY common.

Lots of criminals with business interests are considered to be businessmen.

vvpan• 15 years ago

That sounds like complete BS. I grew up in Russia and no way that statistic could be remotely true.

rbanffy• 15 years ago

They must consider criminal enterprise a business.

And that gives me pause... Who are the other five Russians in jail?

guard-of-terra14• 15 years ago

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.

rms3• 15 years ago

Grain of salt, sure, but it's enough for me as a foreigner to never want to invest in Russia or do business with Russia (or similar states like China). The rule of law is sublimely important in having a functioning business economy.

Maybe Russia is worse than China in that China everyone knows the rule is that you have to sell out to the government when they ask, and in Russia naive entrepreneurs are going to jail en masse.

FlowerPower• 15 years ago

Maybe somebody wants you to not consider investing in Russia or China, so these kind of "news" are told.

The corruption exists, and it may be more so than in other countries comparativly, that does not mean it is not safe to do business in Russia, it just means that the corruption is open enough so we know about it, unlike the highly advanced countries where the corruption is a similary advanced skill.

dchest• 15 years ago

Have you read Yandex's SEC filing? If not, I encourage you to read the "Risks related to doing business and investing in Russia and the other countries in which we operate" section. http://www.scribd.com/doc/54292357/Yandex-F-1-Filing-With-SE... page 22.

(Easier link: http://constructive-project.org/en/articles/25.htm)

VladRussian4• 15 years ago

>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-terra14• 15 years ago

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

guard-of-terra14• 15 years ago

Care to provide quotes? No, you don't.

Слив засчитан.

adaml_6233• 15 years ago

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-terra14• 15 years ago

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_6233• 15 years ago

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.

adaml_6233• 15 years ago

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/...

radu_floricica2• 15 years ago

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...

iwwr3• 15 years ago

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.

Fice2• 15 years ago

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

The title is pure FUD.

vog• 15 years ago

> The title is pure FUD.

Would you care to elaborate?

Fice2• 15 years ago

That is from the definition: «Fear, uncertainty and doubt, frequently abbreviated as FUD, is a tactic used in sales, marketing, public relations, politics and propaganda. FUD is generally a strategic attempt to influence public perception by disseminating negative and dubious/false information designed to undermine the credibility of their beliefs.» (Wikipedia)

And I am not talking about the whole article, only the dubious "1 in 6, 1 in 3" statement.

kds6• 15 years ago

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...)

kds6• 15 years ago

One Possible Elaboration, Part II (and final): (without claims for the absolute truth attached to it)

(... continuation from above or below in this thread ...)

Why is Gorbachev today so rudely harsh towards modern China - the possible future N:1 economy in the world - when expressing his opinion about this country?

What's the purpose of NATO today - fighting terrorism? Who trained and armed the dead-officially-now Bin Laden in the first place in the 80s, and against whom?

How come Turkey is considered a country worthy of pondering about if and when to invite for EU-membership, while the same idea and attitude towards Russia - historically a truly European country with undeniable historic and cultural influence on Europe and the world - countless world-renown writers, poets, composers, scientists... you name it... plus a huge territorial span till the Pacific with all the resources, people, and real economic potential - is something highly exotic? (And this put in best possible terms.)

P.S.

I do not deny that Russia has a corruption problem and also, in the years ahead, huge-impact policy decisions and measures are needed in the economic sphere.

But this is something skillfully used in the practice of the western variety of propaganda called PR, the part of it that serves governmental strategy goals of US and UK. (BTW, A pair of most powerful countries in a "special relationship" as Her Majesty the Queen so rightly stated during the recent Obama's visit in the Buckingham Palace, London).

P.P.S.

" - But isn't the media really free and independent in the western world? How come ever such a FUD possible - serving international state policy strategic goals and forming popular western mass perceptions? "

" - Well, this is really a Hacker-News after all... I have a suggestion for you - you do your own homework research on the topic and report back if you're really intrigued. For starters - check topdocumentaryfilms.com."

stygianguest• 15 years ago

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.

ulvund• 15 years ago

And it doesn't stop at selling

Imagine if everyone who used Google to expand their horizon was imprisoned

wisty2• 15 years ago

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_floricica2• 15 years ago

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.

mike_esspe• 15 years ago

In that sense, you can't run a legal business in Russia. You are always breaking some law.

Duff2• 15 years ago

I don't think that you can really draw a valid comparison between a business that produces milk and cottage cheese to a drug peddler.

A drug dealer is a criminal because he sells contraband, typically doesn't pay taxes on his profit, launders the money and hires others to perform other illegal acts.

This guy sells milk.

askar_yu2• 15 years ago

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

bgarbiak2• 15 years ago

Actually, you're wrong. Unless you don't count Czech Republic, Slovakia, Poland, Latvia, Lithuania, Estonia and some others as Post-Soviet countries. You could, eventually, be right about Ukraine and Belarus though.

guard-of-terra14• 15 years ago

Czech Republic, Slovakia and Poland were never Soviet countries.

k7d• 15 years ago

Indeed, there's a corruption problem in Latvia, but nothing like this. And it looks like it's improving rapidly as oligarchs are loosing power.

andrest4• 15 years ago

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/... 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.

olalonde6• 15 years ago

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

askar_yu2• 15 years ago

I buy your argument, but only for for Estonia, Lithuania and Latvia (of which I was skeptical while writing my first post) Let's add Goergia there also; cause I am not really sure about there either. But now, you still have 11 out of 15 Post Soviet states where the kind of attitude from government as it's described in the article widely prevails.

spenvo• 15 years ago

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.

I-RIGHT-I2• 15 years ago

"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.

SkimThat2• 15 years ago

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.

colanderman2• 15 years ago

Wait... is this a novelty account on HN? I feel like I've just seen the first horseman of the apocalypse.

rms3• 15 years ago

But... it's useful. :o

pilom• 15 years ago

It was a short article, why do you even bother with the summary?

SkimThat2• 15 years ago

The summary is still much shorter than the article. It's 13% the size.

kjw• 15 years ago

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.

startupstella• 15 years ago

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.

veyron2• 15 years ago

if this is the extent of the problem, i dare say India and China are more corrupt

alexro• 15 years ago

you can't really compare corruption, can you?

Simon_M• 15 years ago

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• 15 years ago

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

asciilifeform26• 15 years ago

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.

sili2• 15 years ago

On the other side of the coin, there was little guaranty that most state run businesses would survive any way. Yes, some were bought up by by shady characters, dismantled and sold of by parts for profit. However, others were bought by the likes of the protagonist of the story who invested in them and made them profitable businesses. The alternative would have been for those companies to become abandoned, which means they would have been picked apart by the locals anyway.

asciilifeform26• 15 years ago

there was little guaranty that most state run businesses would survive any way.

Why? Oh, because their immune system, that keeps parasites down (the State in question) was murdered. That's right, murdered.

The alternative would have been for those companies to become abandoned

Why?

As long as the natural resources to run the farms continue to be available (and why should they not?) and Russians still want to drink milk and eat cheese (they do), the farms would keep going happily ever after.

made them profitable businesses

It is possible to get high-quality milk and cheese into peoples' stomachs without American notions of "profit" being in the mix at all.

Is the sewer system in the town where you live profitable?

zeteo• 15 years ago

You seem to be issuing a wholesale approval of the Soviet economic system as just and moral. Are you actually serious? There's a very big difference between the Washington Monument and a dairy farm. A dairy farm is supposed to be an economic, well-administered business. You may wax poetic with Marx all you want, but history has shown conclusively that state ownership is terribly wasteful and inefficient.

Yes, there were lots of difficulties implementing privatization in Eastern Europe, and it's hard to find a perfectly fair system for it. That doesn't make it a theft. If you want an analogy think of a bankruptcy - except the whole economic system was bankrupt in those cases. Without a switch to private property all those economies would be much, much further down the economic drain right now; when instead, some of them have recovered quite nicely.

asciilifeform26• 15 years ago

history has shown conclusively that state ownership is terribly wasteful and inefficient.

If history is teaching us anything here, it is that ownership by an absentee-lord (whether elected by Communist bureaucrats or stockholders, it matters little) is wasteful and inefficient.

And let's not forget that efficiency is a false god. An economy that leaves the masses starving or mired in lawlessness might still be "efficient" from some theoretical standpoint (efficient in feeding those who are fed, in protecting the lives of those who are in the designated protected class, etc.)

The USA is dying the death of the USSR:

http://docs.google.com/Doc?id=dtxqwqr_20dc52sm

And it will be remembered in the same way, as a brutal dinosaur of an empire, run by sociopaths, riddled by economic delusions worthy of the wackiest religious cult.

Without a switch to private property all those economies would be much, much further down the economic drain

On what evidence, on whose word, should we believe this?

some of them have recovered quite nicely

Financiers, mafiosi, and their lackeys riding yachts is not a "recovery."

mbateman2• 15 years ago

> It is highly doubtful that fair compensation for the privatization of public property is possible even in principle.

What? The state-owned dairy farms had a cost, covered by the citizens, presumably in the form of taxation. And they had a product: dairy.

After privatization, tax revenue ceases to be collected for the dairy farm. People instead pay for the same products directly.

Of course the criminal and the corrupt can interfere with this, and continue to impose the tax burden or some such, but exactly what compensation is incalculable here? The farm had a value to the citizens in proportion to how much value it generated for how much cost. And it still does.

asciilifeform26• 15 years ago

Taxation in the Western sense was not key to the Soviet economy. You are thinking using the concepts of a world where money is the main unit of exchange. The USSR was not such a world.

That country was run quite a bit like a non-profit version of a giant American corporation. Does upper management at IBM levy taxes on the Shipping Department or Human Resources?

SwellJoe7• 15 years ago

Are you Russian? Still living in Russia?

I ask, because I don't know any Russians (or citizens of former Soviet-controlled states) who want Russia to return to the way it was, though I think everyone can agree the current state of things is still frighteningly corrupt. But, my exposure is limited. Perhaps the people I know represent an extremist bent; the kind of people who escaped to the US when doing so was extremely difficult, and sometimes dangerous. Just like not all Cubans hate Castros regime, but nearly all the ones who live in the US do.

asciilifeform26• 15 years ago

Still living in Russia?

Moved to the USA as a child.

I highly recommend exploring outside of one's ideological echo-chamber (all of us sit inside such chambers.) You will learn many interesting things! Many of my own political bits have flipped as a result of such exploration.

theoj4• 15 years ago

"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."

There's also the original theft that enabled the existence of the Soviet state -- the theft of land and wealth from the former land holding class starting in 1917. The collectives were created from their lands, and they received no compensation -- in fact in many cases they were persecuted and murdered. Some excuse this breach of property rights by saying that the aristocracy was corrupt, evil, etc., just like today's elites are. It's only the communes and collectives who were "good" and whose property rights should be respected.

Should everyone be equal economically regardless of merit? The guy who does nothing all day long, and the guy who works hard to build a successful dairy firm -- they all should receive the same salary? It is this type of economic thinking that ruined the USSR - when there's no reward for doing good work, then there's no reason to do good work. Why should I work hard when I can rest and get my guaranteed salary?

EDIT: Please attack the arguments not the messenger. I've edited my comment to do the same.

asciilifeform26• 15 years ago

you seem to believe that everyone should be equal economically regardless of merit.

Interesting implication. It says a fair bit about you, actually. That, like most people on this site, you place every person whose thoughts you read into one of a small number of mental "boxes." I, for instance, am apparently a "Looter" from Ayn Rand's novels.

Not everyone is a character from a morality play. Please try to remember this. Not everyone is an uncritical defender or mindless opponent of this or that fashionable doctrine.

the guy who works hard to build a successful dairy firm

How about the guy who works others hard to build a successful dairy firm? And his grand-children? What should they receive? This is the real issue regarding the aristocrats of any nation.

According to some, the USSR began to perish (through widespread cynicism of its own foundational myths) when it finally built a fresh aristocracy of inherited privilege - the Brezhnevian "nomenclature."

jlangenauer• 15 years ago

And from where did the land-owning class obtain the land appropriated from them in 1917, pray tell?

lionhearted3• 15 years ago

> 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.

tokenadult2• 15 years ago

Hear. Hear. I am very familiar with the PRC and Taiwan comparison, as a speaker and reader of Chinese (since the Cultural Revolution) who has been to both countries, and your point is quite correct that it is by no means easy to wind down a communist system. Russia had a communist dictatorship for a whole human lifetime, and less challenge from an alternative model across a border with free flow of information, so that task is especially hard in Russia.

jarek6• 15 years ago

I was born in a communist country (which ceased to be communist ~2 years later) and I downvoted you for gross generalizations and incendiary statements that have little to do with communism as an economic system. Thanks for assuming.

sedachv3• 15 years ago

I downvoted you because your post has nothing to do with the parent's original assertion (that privatization is viewed by many people as unfair - what does privatization in the UK have to do with communism?), and your constant use of the word "seriously." It's seriously annoying.

iwwr3• 15 years ago

Just one caveat that the clusterfuck in the mortgage market is not a product of 'capitalism', but rather perverse state incentives.

grigory• 15 years ago

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.

Andrew_Quentin2• 15 years ago

This is the weirdest thread I have read in a long while. Some guy gets jailed because he does not want to sell his business and you call him a thief?

And what did you make of the 1 in 3 prisoners are businessmen. Do you actually hate business per se? How are we to live if not by trading? Shall we all go back to farming and villages?

I am furthermore amazed that you are the most voted. Did you forget that the Russians were starving in 1989? Whatever public property they might have had, it did not produce. So the bottles of milk were, back then, left empty, there were cues in the line for bread.

You must have also forgotten that Russia went banckrupt. Ideology does that to you. But, you see, Russia had no money! If America goes to the point where it has no money at all, it too will sell the Washington Momentum and the public parks. They are public today, because of prosperity through trade, which allows them to afford such amenities.

Now, what do you do when you do not have food, but have assets? You sell them right? Because assets without food are of no use. Especially if these very assets are meant to create food but are not creating it. So how does, turning a bankrupt society, into what now appears to be with food on the table, amount to theft?

Oh, and have you spoken to your father? Has he told you about the public hangings? The hush hush neighbour informer, the gota go to the party rally.

We do not do things for no reason. Man needs incentives. For more than 5,000 years other system have, and probably will be tried, but they have vanished to the footnotes of history. Have you seen the great civilisations? They all were centres of trade. We are not and we shall never again be, farmers.

Now, try some philosophy. Information can be exciting, but dangerous too without some ability to absorb it by critically, practically, as well as theoretically, evaluating it.

asciilifeform26• 15 years ago

starving in 1989

1) Some privatization and other social experiments were already underway 2) Some Americans (and hell, someone in just about every country in the world) are starving now.

have you spoken to your father? Has he told you about the public hangings? The hush hush neighbour informer, the gota go to the party rally.

I recommend reading about life in the real-life, post-Stalin USSR, as opposed to the Hollywood dystopia you are describing. You are in for some major surprises.

Have you spoken to your father? Did he tell you about midnight War on Drugs arrests, of stoolies and plea bargains, and of prisons where HIV-positive anal rape is an expected part of a sentence? What, he never mentioned those things? Are they not "as American as apple pie"?

Who is to say what the USA will be remembered for? The dead (empires or people) cannot speak, cannot defend themselves.

Have you seen the great civilisations? They all were centres of trade.

Who said anything about dispensing with trade as a whole?

olalonde6• 15 years ago

Nationalization:

    Government takes X$ from your pocket to buy asset A of X$ value.

Privatization:

    Government sells asset A for X$ and gives you back X$ (in the form of 
    cutting taxes or spending it somewhere else).

How is this theft? If I had to pick, nationalization fits the definition of theft better than privatization.

waqf• 15 years ago

You took as axiomatic that if government makes a profit of $X then an equal value will be returned to the people through lower taxes or higher spending. If you believe that, then a government can never steal [from its own people].

dlitwak• 15 years ago

Most of what was "Soviet" was taken from individual owners in the first place. My family fled Estonia from invading Soviets, giving up several businesses. I visited a couple years ago and 4 families now live on the plot of land that was once rightfully ours. It's part of life, deal with it, we did. The making public of private land was also theft in the first place so I guess I don't quite get your point, he rightfully bought the land according to the laws at that point in time, he doesn't deserve to go to prison.

asciilifeform26• 15 years ago

The USSR nationalized plenty of formerly-private land and natural resources, but it built its industrial capacity almost entirely from scratch. (At enormous human cost - which is the only way to uplift an agrarian backwater to modernity in decades instead of centuries.)

The factories which were sold as scrap metal to the West for pennies on the dollar were fully public property.

philwelch7• 15 years ago

There's privatization, and then there's privatization via selling businesses to gangsters.

Personally, I live in a country that went the opposite direction and nationalized formerly private corporations. I don't feel any better now that the American people own AIG and General Motors, and will celebrate the day that these firms return to private ownership.

wnight13• 15 years ago

Why? These firms needed money badly and someone stepped up to offer it. What do you care if it's a public or private fund?

Of course we'd all be better off if loser companies were allowed to fail, especially banks. Bailouts should go to cheated customers, not the cheaters.

ObTopic: Renting the resource to the gangsters wouldn't be half so bad as the outright sale. That's just ludicrous.

olegious3• 15 years ago

"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."

known2• 15 years ago

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

known2• 15 years ago

Hope http://www.fairtrials.net/ can help them out.

1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen

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