This is, sadly, the main reason why even if I wanted to, I wouldn’t do business in today’s “modern” Russia…
“He was a very successful businessman,” Yelena Denisova, a member of the company’s board of directors, told The Moscow Times in a telephone interview Monday. “The company has produced the best wine in Russia. I don’t think he had any enemies. It could be only a robbery.”
I hope, I am not the only one who cannot believe that this was a case of a simple robbery, but rather a case of “normal” way to “compete” on the Russian market, as in if your business becomes attractive, and there is no way you would give up the gains earned through honest hard work, you will eventually be “stepped aside”, forever…
So what happened with the belief that bilateral arrangements between private individuals could solve all of the World’s ills?
I wouldn’t say mutual agreements solve the world, but just that they would make it more prosperous if allowed to take place. Before implying the role of impersonal transactions, we have to take a look at the institutional setting of a specific market and how well these allow for a both easy, and secure way to use of contracts .
In an unstable environment as the Russian market which is pretty messed up on all institutional levels, how would you expect different?
Yes, but isn’t “private enforcement of property rights” a big libertarian theme?
Or are property rights only a viable option if they are infringed by the presence of an aggressor state?
Private enforcement of property rights develop and work very well in small communities, small societies with something more then rules for property ownership bounding them together.
The market-based approach would be, thus, for “the top” to observe and consider precisely these local interactions, at the bottom, which if desirable would then be formally institutionalized and extended with the stipulation of keeping up with their dynamic nature, implement necessary changes, etc.