Wednesday, December 10, 2025

When you become so communist you become capitalist again

 One of my hobbies is studying how corruption works in different countries. The reason for studying this is that every political system has both a formal structure and an informal structure. The formal structure gets recorded by history books and teaches you almost nothing since the informal structure is what's actually governing a country. In the US, for example, instead of giving bribes to cops, the law itself is the product of bribery. In many countries it does not work this way, with most corruption being extra-judicial (giving some plausible deniability to the politicians in charge). The laws will be reasonable or (morally rationalized but stifling for business) while pervasive bribery and insider dealing happens under the table. Doing it this way gives the people in charge my parents of moral legitimacy while allowing them to remove uncooperative subordinates whenever they want using charges of corruption. I find it fascinating how Russia has an entire pyramid structure to its bribery. In essence they have reinvented feudalism as a workaround to a failed communism. In ancient British feudalism everything was a property right and even a job like tax collector could be purchased from the king. In Russia you get a government job so that you can stifle the ability of anyone to get anything done without paying you a bribe. Every position from the lowest clerk to the highest senior official is collecting bribes from subordinates. In fact you MUST collect or you will not have the money you need to pay off your bosses and keep your job. Your boss will fire you and replace you with somebody who generates more revenue if you don't pay him enough in money or favors.


I have talked in the past about legislative accumulation and how it can destroy a nation's ability to get anything done. Once it is impossible to get anything done one might imagine that the bribery mechanism would become much more important, as a way of lubricating transactions and getting bureaucrats out of the way. This informal structure then becomes the new structure. And this process by which the functionality of a system is destroyed by an inherent flaw that no one bothers correcting might just be the engine of change that causes nations to cycle through the various constitutional forms described by the Greek philosopher Polybius: (Monarchy, Tyranny, Aristocracy, Oligarchy, Democracy, and Ochlocracy). But many nations do not cycle through these forms in any fixed sequence and discovering the exact cause for a change of form would be really interesting, and might explain why cycling between forms is so irregular from one country to the next. 


But it is interesting that a nation could become so stifled by its own regulations and past communism (laws they never bothered to repeal) that everything would require permission from a bureaucrat, and the bureaucrats would all wind up taking bribes, and so a form of feudal capitalism would re-emerge.





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