Russian Entrepreneurship and Violence in the Late 1990s

By Radaev, Vadim | Alternatives: Global, Local, Political, August-October 2003 | Go to article overview

Russian Entrepreneurship and Violence in the Late 1990s


Radaev, Vadim, Alternatives: Global, Local, Political


According to a widespread view, Russia is coming through the age of "wild markets," with entrepreneurs having no well-established, shared rules and conventions. This view is certainly too simplistic. Both advanced and emerging markets are never able to exist without trust and commitment among economic agents. However, economic actions are based upon different institutional arrangements. These arrangements are described by three types of ethical theories that treat the motives of economic agents; namely, egoistic ethics; utilitarian ethics; and deontological ethics.

When following the logic of egoism, the agents are pursuing their own perceived economic self-interests, disregarding the moral codes and future consequences of their actions. In this sense, they are constrained mainly by external sanctions, including coercive pressures. Utilitarian modes of action seek to maximize the good. At the same time, they take care of future consequences and pay respect to business reputations ("organization capital"), following the norm "honesty pays." Deontological modes of action presume that the moral dimension is independent of economic interests and that moral codes are not necessarily backed by external sanctions. Actors are driven by their duties and commitments, which in turn are based upon customs and values. "Honesty is, in fact, primarily a moral choice.... We keep promises because we believe it is right to do so, not because it is good business." (1)

I believe that all these analytical frames are applicable--that three modes of action normally coexist in business relationships, even though their combination may vary. In societies that are more or less stable, there is more ground for deontological motivations. In a time of rapid social change, when long-standing norms and customs are eroded, the relative significance of egoism increases. When following egoistic behavioral patterns, agents pursue their own perceived economic self-interests, disregarding the moral codes and future consequences of their actions. In this sense, they are constrained mainly by external sanctions, including coercive pressures. A certain shift toward egoism in business can be seen in the case of today's post-Communist Russia. Still, it does not lead to the absence of business ethics, but rather to specific forms of business in which moral codes are established. Using fragments from the most recent empirical data available, this article will consider the spread of violence in Russian business and the specific relationships that have been established in the field of business protection.

This analysis is based on data collected in the course of two main surveys of nonstate enterprise managers and entrepreneurs (henceforth referred to simply as entrepreneurs) conducted in 1997 and 1998. These surveys have been specifically focused on the issues under consideration and include a standardized survey (in which 227 questionnaires of entrepreneurs from twenty-one regions of Russia were collected) and a semistandardized survey (in which ninety-six in-depth interviews with the entrepreneurs were recorded). These surveys were conducted by the author and a research team from the Center for Political Technologies, Moscow, headed by I. Bunin. The U.S. Center for International Private Enterprise (CIPE) funded the research. The most recent data is supplemented by the outcomes of some previous surveys: a survey of 277 Moscow entrepreneurs conducted in 1993 by the author and a research team from the Institute of Economics in Moscow; and a survey of the heads of 887 small enterprises and 210 medium and large enterprises conducted with the participation of the author at the First Russian Congress of SME representatives (supported by the Russian Federation Chamber for Commerce and Industry). (2)

Violence in Russian Business

The Spread of Threats and Violence

The use of informal means of persuasion, threats, and demonstrations of force are reported to play an important part in present-day Russian entrepreneurship. …

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