Do Criminal Profit Seeking Organizations Influence the Processes of Building Democracy and Capitalism and Generate Socially Desirable Outcomes in Post Socialist Bulgarian Community?

Term Paper

Do criminal profit seeking organizations influence the processes of building democracy and capitalism and generate socially desirable outcomes in post socialist Bulgarian community?

By

Borislav Borisov

2011

INDEX

Introduction page 3

Equal pay for equal prey page 4

The Law and Economics page 5

Conclusion page 8

INTRODUCTION

I base my work on the idea of an article called "THE INVISIBLE HOOK: THE LAW AND ECONOMICS OF PIRATE TOLERANCE" by Peter T. Leeson.

He investigates this question by examining the economics of pirate tolerance. At a time when British merchant ships treated blacks as slaves, some pirate ships integrated black bondsmen into their crews as full-fledged and free members. This racial tolerance was not the product of enlightened notions of equality. Rather, it was forged in the self-interested context of the criminally-determined costs and benefits of pirate slavery. Analogous to Adam Smith's invisible hand, whereby lawful commercial self-interest seeking can generate socially desirable outcomes, among pirates there was an "invisible hook," whereby criminal self-interest seeking produced a socially desirable outcome in the form of racial tolerance. My paper will examine "public benefits" of organized criminal activity in Bulgaria post-socialist community.

What is Bulgaria today?!

Unlike the crime in "normal society" in post-communist countries like Bulgaria, organized crime is not as deviant phenomenon as characteristic of largely criminal transition from state to private ownership and monopoly statist economy to the emerging chaotic private relations in the terms of failed states and institutional vacuum after 1989. Thus organized crime itself reflects the process of disintegration of the totalitarian state and economy by supporting the initial growth of the informal and shadow economy, followed by delicate synthesis between legal and illegal business in the period of legalized post-communist elites (see annex 1).

The Center for the Study of Democracy made analysis, "Organized Crime in Bulgaria: Markets and Trends". According to it the country is among the victims of a crime wave in the ex-socialist countries. The analysis is an attempt to answer the question of origins, specificity and regularities in the evolution of the underworld in the context of Bulgarian transition, the authors write. They outline the picture of organized crime trends and report the analysis is based on nationally representative opinion polls. The sociologists have done over 200 interviews with representatives of law enforcement and judicial institutions and representatives of organized crime in the period 2005-2007.

Equal pay for equal prey – Organized crime and its status

The problems of rising crime since the beginning of transition, however, remain in the shadow of formally successful democratic reform and because of political reasons underestimated by the local experts community, party elites and the foreign partners of the post-communist Bulgaria. Only at the end of the past and the beginning of this decade when the prevailing ideologies lose their influence and are noticed signs of increasing public confidence in the democratic institutions and the political class of the early transition, the problems of organized crime and corruption acquire paramount meaning and their monitoring and evaluation are required and become a main criteria in the relation to Bulgaria for partners like the European Union and the USA.

The political leaders experienced and the initial temptation this problem to be treated exclusively with the political tools of the traditional anti-communism. However more and more politicians and analysts realize that organized crime is more a beneficiary of the destruction of a totalitarian state and can not be understood and explained only with the "communist heritage". Moreover – the organized crime successfully legitimized itself through identification with