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Economic Crime and the Necessity of Morality

At present an alarming crime wave is engulfing Russia and is threatening to spiral out of control. Professor Mikhail Gelvanovsky of Moscow’s Orthodox Charity Center of Social Protection reflects a widespread fear when he points out, “In the past we had the Iron Curtain; now people need iron doors to protect themselves against the growing number of thieves.” Three to five thousand gangs now control some 40,000 businesses. Post-Soviet organized crime is rapidly commandeering an entire nation’s assets: factories, businesses, real estate, and exportable natural resources. Never before have criminal elements had such ready access to natural resources remotely approaching the wealth of a prostrate Russia. Investigative reporter Claire Sterling has noted, “There are fifty ways of saying ‘to steal’ in Russian, and the Russian Mafia uses them all.” President Boris Yeltsin admits the problem is huge: “Organized crime has Russia by the throat, squeezing the life out of the fledgling private sector and holding the government itself hostage.”

Prior to the fall of Communism many members of the Soviet intelligentsia came to regard the sickened state of their own society as a product of lost faith and abandoned morals. In May 1986, writer Viktor Astafyev penned a corporate confession for a nation gone awry: “What happened to us? Who hurled us into the depths of misfortune, and why? Who extinguished the light of goodness in our soul? Who blew out the lamp of our conscience, toppled it into a dark, deep pit in which we are groping, trying to find the bottom?...[In the past] we lived with a light in our soul...so that we would not wander in the darkness,...scratch out each other’s eyes, or break our neighbor’s bones....They stole it from us and did not give anything in return, giving rise to unbelief, an all-encompassing unbelief....To whom should we pray? From whom should we ask for forgiveness?”

Viktor Astafyev is himself proof that honesty is not dead. It can be argued 1) that man, mired down as he is, has a moral sense; 2) that encouraging this moral understanding makes sense, even from a purely pragmatic point of view; and 3) that, accepting the above premises, there is hope for Russia.

Today, most anthropologists and philosophers deny the existence of moral absolutes, calling into question any rational basis for ethical judgments. According to philosopher Richard Rorty, “What counts as a decent human being is relative to historical circumstance, a matter of transient consensus.”

Challenging this academic consensus, political scientist James Q. Wilson argues for an innate, universal moral impulse. He maintains in The Moral Sense, no matter how frequently “selfish desires” may prevail over “moral capacities,” “we are almost always able, in our calm and disinterested moments, to feel the tug of our better nature. In those moments we know the difference between being human and being inhuman.” Alexander Solzhenitsyn made much the same point when he argued that the line between good and evil cannot be drawn through states, classes, or parties, “but right through every human heart.”

A desperate Gorbachev told reporters in December 1989, the day before his historic meeting with Pope John Paul II, “We need spiritual values. The moral values which religion generated and embodied for centuries can help in the work of renewal in our country.” Such utilitarian, crowd control arguments for faith and morality have emanated from pragmatic heads of state from time immemorial. Yet even if politicos employ religion and morality for their own self-serving ends, the predictable results of a better ordered and more humane society still accrue to the benefit of many.

But an enormous economic advantage follows as well. It is only logical, James Wilson explains, that “Someone who can be counted on is likely to attract more opportunities for profitable transactions than is someone who, by his past waffling on commitments, seems a poor risk. Most economists understand the monetary value of investing in a good reputation.”

Even if we grant the existence of a moral sense and its necessity for an efficient and humane economy, of what value are such principles in a sea of Russian lawlessness and gangland greed? No one questions the enormity of the country’s present, crime-infested time of troubles. The debate, rather, centers on whether or not the situation is hopeless. The likelihood of Russia’s escape from the Mafia’s stranglehold and endemic bureaucratic corruption appears slim on paper. But there is, and there must be, hope, because humankind cannot live without it–whatever the empirical realities and prospects. To that end Russians need to 1) take heart in, and take further instruction from, the moral genius of their own rich literature, and 2) cherish and cultivate the scattered parcels of moral high ground that have survived both Marxist and Mafia depredations. Great works of Russian literature penned by Gogol, Dostoevsky, Leskov, Chekhov, Tolstoy, Pasternak, and Solzhenitsyn are replete with deep and profound moral reflection. Czech theologian Jacub Trojan’s entreaty for his countrymen applies equally for Russians: “we must pay careful attention to the sources for our moral and spiritual tradition.“

At an April, 1994 Wheaton College conference on economic crime in the former Soviet Union, two and a half days of bleak reporting prompted a question from the audience: “Could anything positive be said about Russia?” Berkeley’s Gregory Grossman and Duke’s Vladimir Treml both cited the family circle as a remaining harbor of civility and good intentions. One of the strengths of Hedrick Smith’s popular entre to the last years of Soviet life, The Russians, is his insightful treatment of the dichotomy between the exasperating, cold, officious public face, and the very loving, honorable, and winsome private self, proffered only to family and a few intimate friends. But bluntly put, what bearing does the survival of a modicum of private decency have to do with the prospects for a rational market economy in the former Soviet Union?

At the Wheaton conference Harvard economist Marshall Goldman referred to a minimalist solution–an option at least for Western businesses–that is, to get out, to go somewhere else where the graft and violence are less endemic. On the other hand, the maximalist option of succumbing to the Mafia and bureaucratic malfeasance is much in evidence, even if its repugnance is a given. Perhaps a middle ground somewhere between business flight and business surrender might be carved out, a middle ground that would take as a starting point Grossman’s, Treml’s, and Smith’s family circle. The concept is not the diplomats’ “spheres of influence,” but rather, proposed “spheres of integrity.” In March 1994 ethically sensitive entrepreneurs from Slovakia, Hungary, and Romania met for a business ethics seminar near Bratislava to wrestle with their moral dilemma. They already had expanded their sphere of honest dealings beyond their family and half-dozen close friends to include a fairly substantial coterie of business associates. Their goal was to expand these modest spheres of ethical business relationships over years or even decades. It also was their means of coping with the agonizing predicament of trying simultaneously to preserve a conscience and a profit.

Only time will tell if Russia can heal its wounds. Moscow reporter Alexander Kan figures his “only hope is remembering that Chicago of the 1920s didn’t last forever.” Father Alexander Borisov of Moscow’s Orthodox parish of Saints Cosmas and Damian prefers an older and more sacred analogy as he likens Russia’s present disorientation to that of the Jews in the Old Testament Exodus. Just as the Hebrew children, after their liberation from Egyptian bondage, sojourned forty years in the wilderness, likewise Russia may require forty years to produce a generation born free, which does not, like the ancient Hebrews, “look back with nostalgia to the security of slavery.” Lothar de Maiziere, East Germany’s first and last non-Communist prime minister, recently used the exact same analogy to explain “the psychological gap between Eastern and Western Germany” that could endure “until the last person born under Communism passes away.”

In the interim, what Russia needs, if it is ever to realize a just social order, is the rule of law and a civil society. To capitalize on the country’s human potential, citizens and foreign investors need to be able to count on a legal system that is predictable and impartial. For economic reform to succeed it has to have reliable contracts, secure property rights, and a justice system capable of defending both. In turn, the indispensable foundation for a rule of law is a society with the moral scruples to appreciate it and abide by it. In addition, Russia needs the benefit of civil society with its thousands of private initiatives for human betterment replacing the ingrained tsarist and Communist assumption that the state will or should tend to everything of consequence.

When all is said and done, Russia’s institutions cannot be expected to be any more humane, equitable, and free of vice than are its citizens. Human rights activist and Russian Orthodox priest, Father Georgi Edelstein, speaking at the Wheaton conference on economic crime, made that point clear.

In the wake of Gorbachev’s and Yeltsin’s failed perestroika, and in the face of rampant criminality, the only form of restructuring that is capable of sparing Russia additional incalculable grief ahead, he argued, is a perestroika of the human heart. May it be so.