Darkness at Dawn: The Rise of the Russian Criminal State by David s> Satter (review)

Abstract

REVIEWS 39I you join in the intellectual ducking and diving of the ongoing debates about the Russian economy. Department ofPoliticsandPublic Administration NEIL ROBINSON University ofLimerick Satter, David. Darkness at Dawn. TheRise of theRussianCriminal State.Yale University Press, New Haven, CT, and London, 2003. xii + 3I4 pp. Illustrations. Notes.Bibliography. Index.$22.95: /22.50. ACCORDING to a recent poII77 per cent of Russiansbelieve that the resultsof privatization should be revised, fully or partially, and 57 per cent would not objectto seeingthe stateprosecutebusinessleaders.How arewe to understand the contemporary popular desire for 'class retribution'in Russia?What are outside observersto make of the 'war against the oligarchs',evidenced in the recent arrestof Yukos'smost senior figure,Mikhail Khodorkovskii?Here is a timely book that takes us deep into the mass psychology that lies behind poll results and may go some way towards understandingthe complexities of the complicit relationshipbetween criminalizedRussianbusinessand the state. The line between good journalism and good social science is a fine one. David Satter is a good journalist and, as former Moscow correspondent for the WallStreet Journaland theJNfew York Times, he has the credentialsto prove it. His new book,Darkness atDawnisa sharpevocation ofthepervasivecriminality of post-Communist society, powerfully illustrated with disturbing social vignettes. It presents, in unvarnished detail, a picture of corporate and organized crime (both state-sponsoredand private)in Russia today. Here we see the almost limitlessforms of degradationvisited upon ordinarypeople in the transitionto a marketeconomy. Satter provides us with a sociography which, while theorization is in the background,is crowded with the voices of real actorsin real situations the unwitting victims and the perpetrators. We hear the anguished voices of victims of billion-rouble rip-off investment banks and pryamid schemes, the trail of bodies left by routine extortion and gangsterism, the everyday corruption which eats at the fabric of normal life, and on and on. But it is Satter'saccounts of the intimidation and humiliation of ordinaryworkers,on strikesimply for unpaid wages, which touches the core of the new economy. No friendof the previoussystem,Satterconcedes thatprivatizationwhich was supposed to make workers'co-owners' but which put 8o per cent of Russian enterprisesin privatehands by I996, 'made it possible to exploit workersin a manner that, in some respects, was worse than the exploitation that had existed under the Soviet Union' (p. 95). The stripping of assets, insiderdealing , the creation of 'daughter firms', organized theft and nepotism has produced, in Satter'swords, 'a class of criminalizedfactorydirectors'(p. 97). Political reformers actively sanctioned the growth of this criminality as a means of speeding the transformationof the economy. In so doing, they may well have created a permanent legacy. Currently, one of the largest foreign investors in the Russian economy is Cyprus the reverse flow of those billions pillaged in the process of 392 SEER, 82, 2, 2004 privatization.Even the recent returnof BP to the Russianoil industryscene in co-partnershipwith TNK, having previouslyhad its fingersseverely burned, is merely the exception that proves the rule. The current 'buoyancy' in the Russian economy is fuelled by oil. Taking the longer view, BP knows that the eventualprize of accessto substantialRussianoil reservesjustifiesthe financial risksof doing business in Russia. Talk by BP of improving the governance of Russian business by its new adventure is therefore absurd. While the first Russiancompanymay have achievedlistingon theNew YorkStockExchange, satisfyingUS accounting standards,informed observers speak optimistically of fifty years before the deeply criminalized character of Russian business undergoes significant change. At the very least, the ongoing dilemma for Westerninvestorsis routine complicity. All this makes the current, if temporary, 'war on the oligarchs' difficultto comprehend. Yetin a sense, it is almostirrelevantto the prospectsforcleaning out Russian business crime. Putin's 'amnesty' suggests the results of the privatization grab of the I990S are unlikely to be reversed, even if there is some symbolic cutting down to size for electoral or other reasons. Contrite oligarchs may publicly apologize for previous excesses, but criminality has comprehensivelypenetrated Russian business. While the IMF may threaten, and the EU may huffand puffabout the need for good corporategovernance, Russiatoday revealsthe truecriminogenicface of a capitalismwhich no codes of conduct can alter, and nojudiciary can match. Sattershows us that face in floridand forensicdetail. Faculty ofSocialSciences CHARLES WOOLFSON University ofGlasgow Cronberg...