On Dec. 25, 1991, the hammer and sickle flew over Moscow’s Kremlin for the last time. By January, the Soviet Union had dissolved into a series of free market economies. Over decades, a black market for goods in short supply had developed, meeting consumer needs and propping up a floundering economy. The relationships necessary to make sure a factory had the rubber it needed, or that a senior Communist Party official could get a color TV, were known as blat, and they would form the basis of the new post-Soviet economies. Virtually everybody participated, and some prospered, transforming the gaps of the planned economy into criminal power.
For this sprawling underworld, the new normal presented a spectacular chance to expand and to consolidate real power. The fall of the Communist government meant these groups could corner not only the market but also the dismantling functions of the state. First and foremost was security: As state assets were privatized en masse—often into the hands of those same criminals—individual business owners needed protection. As government-run industries, institutions, and services melted away, citizens left out in the cold needed income they could rely on. By the end of the 1990s, the mafia had infiltrated not only big business but just about every mechanism of the state.
