Corruption. Soviet corruption was taking funds intended to buy x of y, priced at the cost of materials + labour + logistics for making x of y and delivering it to where it needs to be, but instead only buying (x - z) of y and pocketing the difference, but writing down that x were delivered, expecting that they’d just sit in storage anyways and by the time anyone figures it out, time, apathy, and incompetence will help avoid consequences.
Western corruption is starting a company to produce y and when a government orders x of them, x are delivered but are priced at the highest price the company can negotiate, possibly while the other side of the negotiation is feeding them info for a tiny portion of the money saved (or more likely less direct kickbacks, like the promise of a job offer after they finish their government position). All x of y get delivered but the price is significantly higher than what it costs to produce them.
Also R&D is priced in because it’s all done for the sake of making profit and must be recovered through the unit sales.
Increasingly, the US model for contracting is to take money, outsource the work to a bunch of bargain basement contractors, pocket the profits, and then fail to deliver the end product.
Also R&D is priced in because it’s all done for the sake of making profit and must be recovered through the unit sales.
Again, this is something of an open question. The engineering of a given retailed unit is priced in as part of the unit rate. But the bluesky R&D is, as often as not, performed at the university level and then arbitraged through the private sector or simply stolen from rival militaries / companies / individuals through espionage and laundered through the private sector.
The Octopus Murders, on Netflix, tackles the anatomy of this kind of government-backed swindle with regard to the development of early iteration database technology.
The real difference between more Socialist/Communist models of corruption and the Western Capitalist style tends to be in the legal canonization of the corrupt practices. You really got to see this in the post-Soviet liberalization of Eastern European economies, as mafia cartels were supercharged by western financialization and eventually subsumed the entire federal apparatus of ex-Soviet states. What was considered a criminal black market prior to 1991 became the standard for managing the economy a decade later.
A long time ago in my country there was a minor scandal with a mid-level government employee sending about $1 million dollars to an obviously fake firm to purchase equipment. The website was made earlier in the year. The site was a thin veneer, with a few incomplete product documents.
The money was never recovered. Nobody was ever held responsible. A million dollars of tax payer money disappeared into somebody’s pocket just like that.
Corruption. Soviet corruption was taking funds intended to buy x of y, priced at the cost of materials + labour + logistics for making x of y and delivering it to where it needs to be, but instead only buying (x - z) of y and pocketing the difference, but writing down that x were delivered, expecting that they’d just sit in storage anyways and by the time anyone figures it out, time, apathy, and incompetence will help avoid consequences.
Western corruption is starting a company to produce y and when a government orders x of them, x are delivered but are priced at the highest price the company can negotiate, possibly while the other side of the negotiation is feeding them info for a tiny portion of the money saved (or more likely less direct kickbacks, like the promise of a job offer after they finish their government position). All x of y get delivered but the price is significantly higher than what it costs to produce them.
Also R&D is priced in because it’s all done for the sake of making profit and must be recovered through the unit sales.
Well… not always.
and
Increasingly, the US model for contracting is to take money, outsource the work to a bunch of bargain basement contractors, pocket the profits, and then fail to deliver the end product.
Again, this is something of an open question. The engineering of a given retailed unit is priced in as part of the unit rate. But the bluesky R&D is, as often as not, performed at the university level and then arbitraged through the private sector or simply stolen from rival militaries / companies / individuals through espionage and laundered through the private sector.
The Octopus Murders, on Netflix, tackles the anatomy of this kind of government-backed swindle with regard to the development of early iteration database technology.
The real difference between more Socialist/Communist models of corruption and the Western Capitalist style tends to be in the legal canonization of the corrupt practices. You really got to see this in the post-Soviet liberalization of Eastern European economies, as mafia cartels were supercharged by western financialization and eventually subsumed the entire federal apparatus of ex-Soviet states. What was considered a criminal black market prior to 1991 became the standard for managing the economy a decade later.
A long time ago in my country there was a minor scandal with a mid-level government employee sending about $1 million dollars to an obviously fake firm to purchase equipment. The website was made earlier in the year. The site was a thin veneer, with a few incomplete product documents.
The money was never recovered. Nobody was ever held responsible. A million dollars of tax payer money disappeared into somebody’s pocket just like that.