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Is Putin pulling all the strings?

Does the drive for a new Russian empire simply reflect the needs of a single ruler? Sarah Bates looks at the state machine behind Vladimir Putin
Issue 2798
Putin in Russia getting into a car

Russian leader Vladimir Putin at the G20 conference in Argentina in 2018

Mainstream media outlets paint the Russian regime’s brutality as being down to one man. They take great pains to say Vladimir Putin’s bad temper, a god complex, or some kind of mental ill health lies behind his decision to invade Ukraine. 

If only it were that simple. The Putin story began during the era of the Soviet Union, which was made up of Russia and 14 other republics. It was a “state ­capitalist” society where the ruling class—the state ­bureaucracy—sought to accumulate capital on the back ­working-class people’s labour. This had allowed it to become a world military power. But by the 1980s, it was in a deep economic and political crisis.

Sensing which way the wind was blowing, sections of the bureaucracy realised it would have to integrate into global capitalism and bring in free market reforms. KGB secret policeman Putin was one such figure. By 1990, he worked under St Petersburg’s new mayor Anatoly Sobchack. The two fought to set up a new free market order, ­bringing in global investment and privatisation. 

In August 1991, ­conservative sections of the Soviet ­bureaucracy and KGB units launched a coup in a last-ditch effort to save the old order. In the capital Moscow, Boris Yeltsin—then president of the Russian part of the Soviet Union—put himself at the head of popular opposition to the coup. 

In St Petersburg, Sobchak and Putin played a pivotal role in helping to defeat it. The old order’s failure ­precipitated the break-up of the Soviet Union. Although hailed as the installation of a new dawn for Russia, it wasn’t exactly a changing of the guard. 

Former Communist politicians simply morphed into “democratic” ones. And figures from the old Soviet ­bureaucracy had already positioned themselves to profit from the collapse. A period of intense ­privatisation forged a group known as the “oligarchs”—super-rich, politically-connected businessmen.

This “wild west” capitalism, seemingly without rules, made this small group obscenely wealthy. But it also fuelled an intense social crisis—­production collapsed by 50 percent, living standards plummeted and wages went unpaid. And it weakened the state and the military-industrial complex, limiting Russia’s ability to project its imperialist interests abroad. By 1993, Yeltsin and MPs were at loggerheads about how to manage the transition to free market capitalism. 

The president sent in tanks to shell the parliament. He then pushed through a new constitution—written by Putin’s mentor Sobchak—that ­concentrated power in the hands of the presidency. This authoritarian political set up was designed to ­protect the new model of private profit‑making of the 1990s. 

Putin has built on it since then, representing the ­interests of the wider Russian ruling class. By 1999, Yeltsin was seen as a liability.  He stood aside and his by then prime minister, Putin, took over. 

Putin has since been ­portrayed as a “strongman” who brought the newly-minted capitalist class to heel. But the reality is closer to a mutually beneficial dynamic between the Russian state and the oligarchs. He did curtail some of the excesses of the oligarchs—such as enforcing limited taxation—but they, on the whole, have been willing to agree to his terms.  In return, they have received many of the benefits of a well organised state.

Their method of profit making has been secured and entrenched. The Russian state plays an important role within the economy. Once the ­oligarchs looted state assets, they made sure to protect their market share from newcomers.

This meant that old state‑owned industries and those which were privatised ­continued to dominate the economy, rather than new ­private ones.But even the state-controlled oil and gas companies, Rosneft and Gazprom, are run on commercial lines with private shareholders.

Right up until the Russian invasion, British oil and gas giant BP continued to have a 20 percent stake in Rosneft with directors on its board. The Russian state has ­continued to sell its stakes in private companies. In 2011 it began a privatisation ­programme of £29 billion worth of assets, including in oil, to combat the state’s “excessive presence” in the economy. 

This trend could, of course, reverse as foreign companies pull out of the country. More broadly, the Russian state has followed many of the free market policies pushed by the US, Britain and European Union. In 2001 it brought a regressive flat tax—which hits the poorest hardest—and has used private finance type initiatives in schools. 

No wonder then that Putin was given a warm welcome by Western politicians during his early years in office.Then there was much talk about how Western and Russian interests could work together to enrich their respective ruling classes. 

A state visit to Britain in 2003 saw Putin escorted to Buckingham Palace by cavalry, where a fancy banquet was laid on. It was all in aid of a key oil deal that saw BP solidify its interests in Russian oil. “It fitted the geopolitical moment,” said Tony Hayward, then-boss of the fossil fuel firm. 

“Through the 2000s there was definitely a sense in the West that Russia could be brought ever closer into the fold.” That sense was relatively short-lived. Since 1991, Russia has tried to reassert itself in its ­neighbouring countries that were formerly of the Soviet Union, known as the “near abroad”.

In Russia’s weakened state, Yeltsin had relied on stirring up a series of separatist and ethnic conflicts to destabilise neighbours. But it took two brutal wars to subdue Chechnya when it declared independence. Yeltsin lost the first war in 1994‑96 amid opposition in Chechnya and on the streets of Russia. But from a position of strength in 1999-2000, Putin overwhelmed the Chechen resistance. 

His military victory, and the spike in the oil prices in the 2000s, underpinned the regime’s stability. It allowed Putin to build up the armed forces and use the country’s oil and gas resources to grow in strength. 

Meanwhile, the US, Nato and the EU had been trying to extend their influence in the “near abroad”, which became an area of growing rivalries. The first significant ­flashpoint came in Georgia in 2008 when Russia invaded two separatist regions to stop them from ­joining Nato. 

In 2014 when Ukraine seemed like it would pivot toward the West, Russia annexed the Crimea and backed separatist insurgencies in Donetsk and Luhansk in the south east. This aggression wasn’t simply down to Putin and a small clique of generals and spooks around him. It was the Russian state pursuing its interests within imperialism, a global system of competing capitalist states. The same is true of Russia’s full-scale invasion of Ukraine today. 

Russia is a major ­international player in exporting oil, gas and coal. It’s also one of the world’s biggest producers of several grains and raw materials necessary for production. It’s a country of 146 million people and is crammed full of nuclear weapons. Yet Italy, a nation with half the people and fewer natural resources to boast of, has an economy almost twice the size of Russia.

“Russia is incredibly ­unimportant in the global economy except for oil and gas,” said Jason Furman, former economic advisor to Barack Obama. “It’s basically a big gas station.” The invasion flows from the competitive pressures the Russian state was under.

The Minsk “peace process” in 2015 froze the Ukraine conflict, but the competition between the West and Russia continued. And Russia was losing in the face of the West’s superior weight. At the same time, the “near abroad” has seen a series of uprisings in recent years—Belarus, Kyrgyzstan and Kazakhstan. While they’re popular revolts, Western powers hope to gain from them.

The Russian state—not just Putin—hopes to send a signal to its neighbours that it can still dominate. Losing the war in Ukraine would be disastrous for the Russian state and its ruling class as a whole. So what next for Putin? It’s fair to say his campaign in Ukraine isn’t going as well as he hoped. 

Putin has built up ­support through Greater Russian Chauvinism—and is ­ramping it up now. But anger has broken through—for example, in 2011‑12 amid election fraud, in 2018 over pensions and most recently in 2021. These built on a broader ­feeling of resistance among workers. As the war in Ukraine drags on, there’s nothing to say similar anti-government anger couldn’t break through again.

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