Talked with a jaded Russian ex-pat last night about the current state of life in Russia. To start off, he introduced the concept of a крыша ( literally, a roof ).

When it rains, you need a roof to protect you. Likewise in Russia, you need a крыша to protect you from the depredations of others.

When Yeltsin chose a relatively unknown Putin as successor, Yeltsin created a problem for Russia because Putin brought his FSB friends into power. These were people who are not averse to using every force available to get what they want.

The apartment bombings were FSB operations to swing public opinion.

The Kursk sinking was a US - Russian incident which resulted in payment to Russia to keep it quiet.

You have to pay rent for your roof, e.g. purchase a Mercedes 600 for a well-connected person's daughter's boyfriend. People talk about this, and it becomes known that you should either be left alone.

-- received Russian world view

The social currency of protection acts as a tax system with seemingly large differentials in tax rates. Defense costs more than offensive power, so a roof with a credible second strike capability will cost less in protection money than a defense-oriented one.

Since first strikes can be stealthy, the second striker needs to have good knowledge of local conditions, so the local roof has an advantage over the remote who has a higher chance of striking the wrong person.

This yields a trade-off between extracting local rents and the possibility of a non-local building an information network and offering protection for less. Also, too high rent without a credible second strike means the local roof has higher odds of being deposed.

How much choice you have in terms of protection?