Jun 15, 2018
The following text is the translation of a presentation given at the Leon Trotsky Circle by the French revolutionary group, Lutte Ouvrière, in Paris, France on June 15, 2018.
According to the pundits, Russia will not make waves during the World Cup, while hosting the games. Putin has reverted to expressions taken from sports since his most recent election campaign, telling the Russian people,“We are a team!” and obviously wanting to be its captain. Reelected President of the Russian Federation for the fourth time last March, Putin will have led the country for 24 years by the end of his term, counting the 4 years from 2008 to 2012 when he swapped roles with his Prime Minister Medvedev, following the law spelled out in the constitution, while remaining the true master.
Since the polls predicted that he would win the election by a wide margin, Putin only held a single campaign rally in Moscow. He stood before a crowd of tens of thousands of people and spoke for only three minutes. But the media campaigned for him 24/7, churning out flattering stories and fawning interviews. Coverage was so over-the-top, a photo showing a shirtless Putin riding a bear over a riverbed began circulating on social media. As for the other candidates, they did not put forward a program of any sort and they had very little coverage on the news media.
For the Russian political class, the trick was to get the highest possible number of people to vote. Over the years, the political class has figured out how to hide behind a controlled multi-party election and the verdict of the ballot boxes. Their choice of an election day was not random: on March 18, the government celebrated the fourth anniversary of Russia’s annexation of Crimea. Putin wanted a high voter turnout to show the country’s patriotic spirit.
The central election commission sent out millions of texts telling people to cast their ballots. Similar appeals were displayed on public signs, printed on public transportation tickets and receipts, and posted all over the Internet. Companies even pressured their workers and chartered buses to take them to vote — on a Sunday — and sometimes demanded proof of their participation. There was also even more direct encouragement, such as the contests organized around polling places. In Krasnoyarsk, Siberia, for example, the first prize in a selfie contest called, “I Vote with My Friends”, was a car.
Putin was reelected with 76.69% of the vote, his highest score. It was clearly a parody of a democratic election, with organized fraud as the rule in Russia. Nevertheless, it cannot be denied that the president benefits from a certain consensus among the population. Seen at a distance, one is led to ask why, since his regime is considerably marked by authoritarianism. The Kremlin carries out visible censorship, compromises political leaders who have fallen into disgrace, bans most demonstrations, and detains members of the opposition in prison for many years. Certain artists, directors, and film producers are silenced. The repression also strikes down active feminists and homosexuals whom discriminatory laws make into public scapegoats.
And of course, Russia is particularly criticized in the West because of its role in Ukraine, its annexation of Crimea in 2014, and its support for the Syrian dictator Bashar al-Assad. In this way, the Russian regime ends up as being one of the pariahs, while Washington, Berlin, and Paris accept other regimes that are just as authoritarian. The U.S. and Europe target Russia with sanctions which they have renewed and intensified since 2014.
Putin takes advantage of this situation to rally around him the population which fails to understand why the West blames Russia for everything. The pervasive nationalism in Russian society relies on this feeling, which it constantly nourishes.
Besides, Russians remain deeply marked by the collapse of their former country, the Soviet Union. In the decade that followed this collapse, the 1990s, they were told that capitalism would improve their lives. But it brutally worsened conditions for most Russians. By comparison, Putin’s rise to power was associated with the government taking the situation back under control, with a relative increase in the standard of living during the 2000s.
That said, one should not imagine that the population wholeheartedly supports the regime, nor that it is satisfied with living conditions or with the evolution of society in general.
Every year, Putin indulges in a TV program called Direct Line with Vladimir Putin, during which he responds to questions and grievances from Russian citizens for several hours. The program is of course meant to show Putin in his best light. But the questions are also quite revealing. During the broadcast on June 7, 2018, many questions had to do with tax increases, the cost of fuel, the price of goods in Crimea, the exorbitant interest charged on loans, the low salaries of teachers, the deplorable conditions of hospitals and roads, the raising of the age of retirement, and even the scandal of open-air toxic emissions that are literally poisoning the inhabitants of the Moscow region.
And so, we must ask ourselves to what extent and for what reason a part of the population supports Putin’s personality and his policies. However, it is also especially important to understand how this regime and the man who embodies it are necessary to the wealthy and privileged classes who rule Russia today. And, first of all, who are they?
These questions cannot be understood without keeping in mind that an original society was constructed during the seventy years that the Soviet Union existed and that it is this society which Russia has inherited. What traces has the past left behind in this country which was the first and only country where, one century ago, the working class took power and began to build a society on new foundations? And how has Russia evolved in the decades since its rulers officially turned their backs on that past?
In December 1922, several states born out of the October Revolution formed the Union of Soviet Socialist Republics, the USSR. In a territory that constituted one-sixth of the Earth’s land surface, the existence of a workers’ state could have been a point of reference in the struggle of the worldwide proletariat, their fates being intimately linked. But the imperialist powers succeeded in isolating the power of the Soviets by wiping out the revolutions that had broken out in Europe during the upsurge of October. The history of the USSR, which continued to exist until December 1991, would follow a course that no one had predicted.
The new society began at a very low level. At the end of the 19th century, the czarist empire remained a backward state under the imperialist domination of the capitalist trusts over the planet. Certainly, foreign capitalists had developed industrialized pockets in Russia, and this created a working class that would go on to take power. But in the countryside, the immense majority of the peasantry was miserable and illiterate when the revolution broke out.
In addition to the weight of this backwardness, the workers’ state inherited an economy that had been destroyed by seven years of war, including World War I and the Russian Civil War.
Moreover, for its entire existence, the USSR faced a de facto economic blockade by the imperialist countries, cutting it off from the global economy and the international division of labor. Capitalism had already globalized the economy for a long time. In 1848, Marx and Engels had already pointed this out in the Manifesto of the Communist Party. The idea of socialism in one country which Stalin began promoting in 1924 would have seemed absurd to them.
The isolation of the USSR brought about the development of a sprawling administrative apparatus in place of the workers’ soviets, the fusion of the Bolshevik Party with this apparatus, and ultimately the installation of a layer of government professionals in control of the state: the Soviet bureaucracy. This caste rapidly became conscious of its own particular privileges and interests that it had to defend.
Within the Bolshevik Party, a struggle broke out against the bureaucratic degeneration of the workers’ state. Among the October revolutionaries and those who waged the civil war and took upon themselves the construction of the Soviet state. A tendency rallied around Trotsky calling itself the Bolshevik-Leninist Left Opposition. It fought against Stalinism over the course of about 15 years under increasingly difficult conditions. At the end of the 1930s, Stalin had not succeeded in reducing the Trotskyists to silence. After confining them to prison camps, he had thousands of them shot. He then had Trotsky assassinated.
Beginning in the 1920s, Stalinism thus played a deeply reactionary political role, not only in the USSR, but in the entire international working-class and communist movement. Stalinism contributed to the defeat of the Chinese Revolution of 1925-1927. It then went on to deliberately sacrifice the struggles of German, French, Spanish, as well as other workers. Since everything was connected, with the relationship of forces between the proletariat and the bourgeoisie definitively measured at a global scale, each defeat that Stalinism provoked brought about negative repercussions in the USSR. Each defeat reinforced the bureaucracy and its dictatorship over the society.
In 1936, when Trotsky wrote The Revolution Betrayed, he emphasized the immense progress that the revolution had brought about. But he also evaluated the process that had carried the Stalinist bureaucracy to power. He classified the Soviet state as a degenerated workers’ state.
Based on the expropriation of the capitalists and big landowners, the economy had been nationalized and reorganized according to a plan over the entire country. Trotsky hailed the emergence of industrialization. It was certainly carried out under the constraints of the Stalinist regime. But it was also made possible by the mobilization of the working class and the impulse given by the social revolution. Contrary to the blather of Stalinist propaganda, the Soviet economy did not overtake capitalism. But its results had no precedent in history, even as capitalism was mired in crisis after the crash of 1929.
Despite the ravages of the conflict and the parasitism of the bureaucracy, after World War II the USSR’s industrial development earned it the rank of the second most powerful country in the world after the United States. However, the usual portrayal of the Cold War as the clash of two great “superpowers” hid enormous disparities. On one side, the United States and its European allies had colossal resources and the most modern technologies at their disposal, while on the other, the USSR was no more than a giant with feet of clay.
All those who rejoiced at the end of the USSR have repeatedly said over the past thirty years that its economy was on its last legs and that it lost the competition with capitalism. This is false. The effectiveness of the planned economy was not at fault. On the contrary, it allowed the USSR to avoid imperialist domination for 70 years. Or, in any case, not directly, since it did not completely escape imperialism. Ultimately, the USSR, left isolated and cut off from the international division of labor, fell victim to the repercussions of the defeats of the proletariat in other countries. This is what hindered its development and was the cause of its collapse.
Yet, over the same period, capitalism proved incapable of developing any region in the world in a comparable manner, despite the immense resources and means at its disposal. A long time ago, the bourgeoisie stopped playing a progressive role. Meanwhile, the proletarian revolution carries tremendous possibilities of which the example of the USSR has only provided a small idea.
The Stalinist leaders began to copy the lifestyles and habits of their Western counterparts early on. But as opposed to the capitalists, the Stalinists could not accumulate capital from generation to generation because they did not own the means of production. They could only enrich themselves out of the wealth that their positions in the state apparatus allowed them to take from the nationalized economy. The bureaucracy was thus less stable and less powerful than the bourgeoisie — it had neither the bourgeoisie’s deep historic roots nor its social base. It was forced to hide the source and extent of its privileges that contradicted the egalitarian principles proclaimed by the regime. The bureaucracy was not a social class in the Marxist sense of having an existence that corresponded to a historic necessity emanating from the development of society. The bureaucracy was only the secondary product of a workers’ revolution that had degenerated because of its isolation.
From the beginning, the bureaucrats’ irresponsibility threatened the stability and survival of the young Soviet state. Their greed was only matched by their blindness. In order to guarantee their collective domination over the society, they needed the personal dictatorship of an unquestionable leader — Stalin. He took it upon himself not only to silence any criticism of the ruling caste, no matter where it came from, but also to rein in the bureaucracy itself. This prevented the bureaucrats’ rivalries and appetites from splintering the state apart. It was the price they had to pay for being able to plunder the country.
When the dictator died in 1953, there seemed to be no risk of a workers’ revolution and the situation of the USSR appeared stable. Since the ruling caste wanted to profit from its advantages more openly, the regime relaxed the dictatorship that had constrained it. This set off the process that would lead to the collapse of the USSR. At the head of the Soviet republics, and at the ruling heights of both the party and the state, the ruling cliques staked out increasing amounts of autonomy to systematically exploit their own fiefdoms.
Nevertheless, the generation of leaders who came out of the Stalin and Khrushchev eras managed to keep their hold on the central government for almost forty more years.
In the 1980s, this government was incarnated by old men who died one after the other, set against a backdrop of economic crisis, a war in Afghanistan which bogged down the USSR military, and the pressures of the arms race that U.S. imperialism used to strangle it. The young guard called upon to take the helm, which included a certain Gorbachev, would have a hard time imposing their authority.
The rivalries between the clans of the bureaucracy broke into the open in 1985. Gorbachev, whose peers had made him the Secretary General of the Communist Party of the Soviet Union (CPSU), launched perestroika. The goal of this policy was to get the economy and society back on its feet without changing the system. In order to do this, Gorbachev tried to go around his opponents by leaning on a part of the bureaucracy. But this was in vain. So he called on the petty bourgeoisie, especially the intelligentsia. Later on he called on increasingly wider parts of the population by promising changes. By doing so, he opened a Pandora’s Box that released a wave of protest which would overwhelm him.
Gorbachev hoped to rely on Boris Yeltsin, a high-ranking apparatchik and pure product of the regime, but Yeltsin overtook him in terms of demagogy when he encouraged all the republics and regions to “grab as much sovereignty as you can swallow”. Once Yeltsin got himself elected president of the Soviet Republic of Russia, he became the standard-bearer of most Russian clans of the bureaucracy and challenged the monopoly of the one-party state. Riding on the spreading wave of protest, Yeltsin signed onto the dissolution of the USSR with his counterparts in Ukraine and Belarus in December 1991. Gorbachev was forced to resign. But Yeltsin himself barely had any means to back up his authority, even at the scale of Russia alone.
Everywhere, the bureaucrats pounced on the state enterprises and wealth that was within their reach. Their greed led to open conflicts, often armed and fanned by separatist movements. War ravaged the Russian Caucasus, and many republics gained independence, from Azerbaijan to Georgia, including Moldavia and certain regions of Central Asia.
The breakup of the USSR was devastating, especially since its economy had been conceived as a whole and was hyper-centralized. Most of the newly independent states found themselves in an untenable situation that lasted a long time.
Today, for example, Tajikistan, a former Soviet republic in Central Asia, is one of the poorest countries in the world. Out of a population of around nine million inhabitants, nearly one million Tajiks now work in Russia, where they are treated like outcasts. At the end of the 2000s, the money that they sent back to their families represented half of Tajikistan’s GDP.
Armenia, a small republic in the Caucasus was left with almost no industry after the collapse of the USSR. It survives only thanks to the money sent by its diaspora and Russian aid. In Belarus, wages are declining, production is decreasing, and the solution being given to the unemployed is to sweep the streets and gather potatoes.
As for Ukraine, whose industry had developed considerably at the time of the USSR, the European Union and the United States had hoped to draw it within their sphere of influence. Today it is torn between the West and Russia, ruined and ravaged by civil war. This is a tragic reminder that salvation cannot come from imperialism.
In all of these case, poverty has skyrocketed. How could it be otherwise? Before, each Soviet republic had specialized in certain types of production as a function of its resources and workforce: textile, mining, metalworking, agricultural, and livestock industries were complementary. This took place even beyond the boundaries of the Soviet Union. For instance, East Germany and Hungary supplied medicine to the whole of what used to be called the Eastern Bloc, made up of the USSR and the People’s Democracies. No longer being able to get these medicines or to afford Western drugs at outrageous prices has contributed to a terrible decline in health and a drop in life expectancy.
At the time of the USSR, education was free and open to all. Of course, there were special schools and renowned university institutes where practically only the bureaucrats’ children could study. But everyone had access to a basic education and sometimes more. After 199, teachers were no longer paid regularly, and the public education system — the only one that existed at the time — collapsed.
On the political level, the erection of borders that cut across the immense territory of the ex-USSR prevented the free circulation of populations. Authoritarian regimes were established in all the former Soviet republics. Sometimes they had some trappings of being democratic. But usually, they didn’t even bother.
Finally, throughout the world, the breakup of the USSR was accompanied by a retreat at the level of ideas. Before, there was no need to explain that a society with no bourgeoisie was possible: it was an established fact. But since the USSR was ended without the working class independently intervening to defend its interests, this seemed to prove correct all the criticisms of the ideas of planning, state control, and, of course, the transformation of society. Why the idea of transforming society? Sure, society should be transformed. But how? What was it supposed to become? To go where? What then, if the Soviet population did not judge its society to be better than capitalist society?
On our part, we have no nostalgia for the USSR of the bureaucrats. But under the conditions where it took place, the evolution of the USSR could only go backward. The implosion of the Soviet Union brought nothing positive, neither at a material level, nor at the level of consciousness. Only the proletariat would have been able to propose another perspective: the overthrow of the bureaucratic regime in order to bring about the reestablishment of workers’ democracy, taking the planned and state-controlled economy that was the heritage of the October Revolution back into its own hands.
After the end of the USSR, Russian politicians and their Western advisors imposed what they called “shock therapy” in Russia, opening the way to the market and privatizations. In fact, it became a sort of Wild West. Under the cover of a division of the collective property among everyone, it became a generalized plunder of state wealth. In this gold rush, rackets, frauds, mafia-style seizures of property, and settling of scores became the rule. The bankers and bosses who emerged out of the bureaucracy, the petty bourgeoisie, and the criminal underworld, often engaged in shootouts in broad daylight.
There were many among those who believed it was their moment to finally become bourgeois, or simply to set up a small business or shop, who were deceived and were pushed to the side by others who had more support at their disposal. The best positioned were those who had always plundered the country: the bureaucrats linked to the ruling layers of the former ruling party and the secret police, as well as those who had built up relations with bosses of the criminal underworld. Legal procedures and property rights were worthless against Kalashnikovs, corrupt judges, and the mutual support of politicians and mafia, as Western businessmen who ventured into Russia discovered.
Those labeled “oligarchs” became billionaires in no time at all. Linked to different groups within the bureaucracy who pushed them forward as a kind of proxy, they accumulated colossal fortunes. The most visible oligarchs at the time — Berezovsky, Gusinsky, and Potanin — belonged to Yeltsin’s clan, which was nicknamed “The Family.”
One of these oligarchs, Potanin, who got his hands on Norilsk Nickel, the world’s largest nickel producer, was First Deputy Prime Minister for two years. In March 1995, he launched a program called “loans for shares” in which the government offered state firms to private banks in exchange for loans guaranteed by these banks. Everything was arranged in advance: the government would declare itself incapable of paying back these loans, and the firms would fall into the oligarchs’ clutches. In this way, they took over the most powerful trusts, such as the producers of raw materials, for paltry sums. Berezovsky spent $100 million to snatch up the oil company Sibneft. He quickly sold 8% of the company to French oil giant Total at market price, or $118 million. In order words, he acquired Sibneft for nothing.
All this did not make the new Russia into a viable economy — just the opposite. Billionaires can make their fortunes anywhere, and Russia is one of the countries with the highest number of them, but this did not set off the least economic development.
The oligarchs, bureaucrats, and mafia bosses who got hold of the state firms often rushed to sell them off bit by bit. Their main concern was to accumulate huge masses of dollars in foreign bank accounts as quickly as possible. Incidentally, the result of this was that the global financial system was one of the main beneficiaries of the plunder of the former USSR.
For the working classes, this was a disaster unlike any experienced by a developed country in peacetime. Between 1989 and 1998, Russia’s GDP fell by 55%. The rate of inflation reached 2,500% between 1991 and 1992. Those with any savings watched them go up in smoke. In 1993, the government distributed shares in state enterprises to the population, who resold them to gain a little money or held them for safekeeping. The majority of these shares quickly found their way into the hands of the most greedy monopolists.
Wages were no longer paid or came after months of delay. In order to survive, millions of families were forced to resort to their own resourcefulness, to grow their own food and to barter for what they needed. This also took place between businesses. Lines of elderly people could be seen at the entrances to metro stations selling their meager personal possessions. The already shabby pensions were no longer paid. Life expectancy collapsed: people died of malnutrition, hopelessness, and illness. And to top it off, the financial crisis that struck Russia in 1998 resulted in a terrible crash.
Even the petty bourgeoisie, who had believed that it could prosper like the Western middle classes once the “shock therapy” was over, had nothing left to do but wring its hands.
At the start of the 2000s, Russia had about 40 million people out of a population of 145 million below the poverty line. This decade was a nightmare for those who lived through it. Even today, it is still widely assumed that those who hold the country’s wealth are thieves. And the fear of falling back into chaos like that of the Yeltsin years still weighs on peoples’ consciousness.
In the 1990s, perestroika was accompanied by a breath of freedom and there was a proliferation of publications, meetings, and discussions, along with the creation of all sorts of political organizations. But the concrete form of the promised freedom turned out to be a caricature of the presidential regime: the rule of the mafia and the freedom for the bureaucracy to systematically bleed the country. As a result, democracy ended up with the derisive Russian nickname of dermokratia: shit-ocracy.
In this way, the democratic freedoms which a section of the petty bourgeoisie had hoped to champion very quickly ended up becoming a low priority for the population, given the degradation of living conditions. That is still the case today. More than Putin’s supposed popularity, this explains why the authoritarian aspects of his regime are often justified, or at least accepted.
Of course, it will be very different when the proletariat begins fighting again and has to confront repression. But what happened in Russia is an illustration of what happens if the working class does not give the words “freedom” and “democracy” a concrete content by defending their own interests. Those words only serve to deceive.
By the end of his presidency, Yeltsin, the alcoholic staggered in from of the cameras. Corrupt to the bone, he was deep in dealings that threatened to send him to prison, along with his associates. So his clan tried to find a way to pass the torch without creating too much damage.
But the decomposition of the Russian state was not yet complete. The military apparatus had seen its supply budget cut. Not only was the army in a piteous state, its top leadership had lost its prestige. It was an unheard of humiliation, aggravated by the fact that the army was forced to evacuate Eastern Europe, the non-Russian former USSR, and had just lost the first war in Chechnya, which had started with the refusal of Chechen leaders to become part of the Russian Federation. The Russian officers dreamed of revenge. It was the same in all of the ministries and all of the administrations where a mass of bureaucrats had seen their status and privileges deteriorate. In the halls of power, voices in increasing numbers were calling for the reestablishment of a strong state.
Putin appeared as the solution, for Yeltsin as well as for the apparatchiks looking for the man of destiny. He had made a career in the KGB and then as a deputy to the mayor of Saint Petersburg, who hired him to facilitate all sorts of trafficking. Having proved his worth, he became Director of the FSB, the successor to the KGB. He worked a miracle there, since he prevented the President from being punished for his corrupt acts. In August 1999,Yeltsin named him Prime Minister. On December 31st, Yeltsin appointed Putin Acting President. In May 2000, this man, a virtual unknown to the public, was elected president after a blitzkrieg media campaign financed by “the Family.”
Around Putin, there were several groups of men called siloviks in Russian, which can be translated as representatives of the ministries of the armed forces (Army, Police and FSB), the hard core around which the bureaucracy had based its dictatorship over society. These men took back the ministries and all the organs of power. The most well-known of these, Igor Sechin, had worked with Putin in Saint Petersburg and was also linked to the FSB. He was propelled to the head of the board of directors of Rosneft, the main Russian oil company, a position which he occupies to this day. Behind Putin, there is also Patrushev, who replaced him as the head of the FSB, as well as the Prosecutor General Ustinov, and other high functionaries of the same ilk.
While he was still only Prime Minister, Putin launched a second war in Chechnya. As a pretext, he used several bombings in Moscow. These bombings had been attributed to Chechen separatists, but the Russian secret services were suspected of being behind them. It was a matter of reestablishing the authority of the state by making the most striking example possible.
In ten years, this new war would cause more than 100,000 civilian deaths and more than 10,000 deaths of Russian soldiers. The army tortured, raped, and sowed terror. It razed entire cities and villages. The capital, Grozny, fell victim twice. The entire country was plunged into a climate of war. Several bombings and hostage takings struck Russia, causing hundreds of deaths each time. In 2006, the journalist Anna Politkovskaya, who denounced Putin’s policies, was assassinated.
To reestablish order in Chechnya, Putin had relied on Akhmad Kadyrov, a religious leader, arms dealer and former separatist warlord. He was killed in 2004. His son, Ramzan, head of the regime’s murderous and racketeering militias, succeeded him. With Putin’s support, Ramzan rules over Chechnya today. He only recognizes sharia law, justifies polygamy, forces women to wear the Islamic veil, and carries out purges against homosexuals, who are forced to flee to escape death. Putin washes his hands of all this. All that matters is that the Chechen Republic is held in an iron grip and that it does not make too many waves.
In his first presidential speech, Putin announced that he wanted to reestablish what he called the “power vertical.” In 2004, he ended the practice of electing regional governors. Instead, they were named by the Kremlin, which also divided the country into seven federal districts with direct representatives of the president at their head. These “Plenipotentiary Representatives” control the entirety of their territories, most notably in terms of taxes and federal allocations. In 2012, with his control assured, Putin allowed governors to be elected again, but this time on the basis of a list of candidates chosen by the president. In September 2017, Putin used this to replace 11 governors all at once.
Over the years, Putin removed from their positions some of those who had allowed him to establish his power. He now prefers to rely on younger men who owe him everything. These “Putin boys” are presented as good administrators, graduates of the best schools or stars from the world of finance and business. They serve to reinforce the power of the chief who promoted them, a practice recalling Stalin or his successors.
In a general sense, the vertical shift in power has meant the suppression of all of the margins of autonomy that the regions had taken from the central government under Yeltsin, as well as reinforced control over political life. In 2008, the number of legal parties was reduced by making the conditions for registering them more strict. And yet, unregistered parties and candidates without party affiliation cannot run in elections. On the other hand, the pro-Putin party, United Russia, is an apparatus that groups together the members of the administration and transmits presidential policy throughout the country.
This strait jacketing of political life has become stronger every year. Evidence of this can be seen in the elimination of universal suffrage in the mayoral elections of several big cities such as Yekaterinburg.
At the start of his first mandate, Putin summoned the oligarchs to set things straight: from then on, they would have to pay taxes, something which they had stopped doing; they would have to reinvest a part of their wealth in the economy; and they could no longer interfere in politics. In exchange for all this, the state would not challenge their fortunes, which were certainly acquired through suspicious means, but from which the new government also expected to profit.
Those who believed that they were strong enough not to have to play this game were crushed. The billionaires Berezovsky and Gusinsky were forced into exile. But the most revealing affair of the new relations of force was that of Khodorkovsky, who, although he had become one of the richest men on the planet, would spend 10 years in penal colonies for having believed that nothing could stop his ambitions.
Khodorkovsky had acquired the oil trust Yukos through the “loans for shares” program. According to the CEO of British Petroleum (BP) at the time, Khodorkovsky “began to talk about getting people elected to the Duma [Russia’s legislative body], about how he could make sure oil companies did not pay much tax, and about how he had many influential people under his control.” He carried out lobbying and subsidized NGOs, private cultural projects, and all of the opposition parties at once, from the liberals to the Communist Party. He then planned to sell a large part of his company to the U.S. oil giant Exxon. This was too much: accused of betraying Russian interests, he was arrested in May 2003 and his company was confiscated by the state. When Khodorkovsky was freed in 2014, his only option was to leave Russia.
Other oligarchs chose to keep a lower profile. Roman Abramovich became worried and had to sell his shares in companies deemed “strategic” back to the government in exchange for the ability to continue his dealings. However, he was subject to a certain level of control. Putin promised him the governorship of Chukotka, a sparsely populated region bordering Alaska, while strongly “encouraging” him to invest a part of his fortune there. Abramovich also ended up choosing exile.
It is remarkable that the oligarchs who agreed to cooperate with the government whether they liked it or not have remained subject to its goodwill. In no bourgeois state, no matter how little developed, is the relationship between the capitalists and their state like this. In other situations, the property of the big bourgeoisie is solidly rooted in an entire social layer built up over the course of several centuries of social, political, and economic evolution. In normal times, it is the state that obeys its wishes, not the other way around. It is hard to imagine Bill Gates being deprived of his fortune overnight by a court decision.
Putin, on the other hand, can publicly call to order a CEO who does not come to a meeting with the president: “Mr. Ziounine may be sick, but he would do well to recover more quickly. If not, we can send him a doctor to care for him.”
Recently, several affairs have reminded the oligarchs how fast this medicine can work. To give one example, in 2014, the arrest of the oligarch Yevtushenkov was a shock to the business world. Yevtushenkov was the head of a holding company active in cutting edge technology sectors and the owner of Bashneft, the country’s sixth largest oil company; he was the opposite of Khodorkovsky, staying away from politics and taking few risks. However, the courts forced him to cede Bashneft to Rosneft, which was run by Sechin, the head of security services. His case served as a reminder to his colleagues, just in case some of them had forgotten, who had the last word in business and politics. Since then, Yevtushenkov returned to business … until the next time.
A Russian political journalist, Mikhail Zygar, sums up the situation well: “Business leaders understand that some or all of their property could at some point be expropriated in the interests of the state. They have long since come to terms with that fact. It is often said that Russia’s top business people are not billionaires but simply work with billions of dollars in assets. They manage what Vladimir Putin allows them to manage.”
Thanks to Putin’s intervention, the current bureaucrats, who inherited their posts from those of the Soviet Union, have to a certain extent forced the oligarchs to recognize that their wealth can be taken away at any time. Certain pundits refer to this with the expression “velvet re-privatization.” Horrified pro-Western liberals often talk, incorrectly, of re-nationalizations. Not only does Putin allow his own entourage and the security forces who brought him to power to benefit from what appears to be a redistribution of state goods, but he also uses it to restore the positions, prestige, and advantages of the much larger circles of public servants, both major and minor.
For Putin, it was a happy coincidence that in the 2000s, there was a boom in raw material prices, such as for oil and gas, which are Russia’s main sources of revenue. Thanks to this revenue, the state could pay back its debts and run a budget surplus. The state even relaunched the productive apparatus inherited from the Soviet Union on the cheap, without major new investments. Putin thus left some crumbs to the population, who linked his rule to an improvement in their living conditions.
The state controlled the strategic sectors of the economy, strictly limiting the role of foreign capital. Putin placed one of his right-hand men, Miller, at the head of the natural gas giant Gazprom. At the head of Rosneft, Sechin. One of his close associates, Yakunin, took charge of the Russian Railways company. And so on. From this point on, there were senior officials in charge of state enterprises who were as rich as oligarchs. Unlike the oligarchs, they do not flaunt their wealth in broad daylight.
But no one is fooled, since the lifestyles of these senior officials have no relation to their salaries. The foremost among these is the Prime Minister Medvedev, who was recently the subject of a video that caused a certain buzz because it showed that he owned several luxury properties in Russia and Italy hidden behind shell corporations and foundations.
Putin himself is one of the world’s richest men. The Panama Papers revealed that one of his childhood friends manages his capital, which is placed in offshore accounts. Another of his friends, the oligarch Rotenberg, is nicknamed the King of State Contracts. In 2014, he won many of these within the framework of the Olympic Games in Sochi. In exchange, he took charge of the construction of the bridge linking Crimea to Russia, which Putin inaugurated in 2018. Thrilled with being able to swagger in front of the cameras, Putin recently ordered another bridge from Rotenberg, this time to connect the Russian island of Sakhalin north of the Sea of Japan to the mainland.
Even if not all of them are as well-placed to get rich, state administrators at all levels are in debt to Putin for reestablishing the “power vertical.” They make up the base of his support in society.
In 1936, Trotsky estimated that the bureaucracy, including its families, represented about 25 million individuals out of a total population of 170 million. How many are there in Russia at present? It is difficult to say. But there are a lot of them and Putin has saved their livelihoods. Beyond the wheeling and dealing ministers at the top of the state, there are the myriad of all those who have the power to deliver an official document, to grant an authorization, an exemption from military service, a construction permit, or a driver’s license, those who can provide access to a famous school or a hospital bed with no wait time, those who will give a favorable verdict at court, or those who let a truck pass through customs … in short, all those who can take bribes. And bribes must be given for everything.
Private companies, especially the smallest ones, do not escape the racket of the tax administration, the police, and the many organizations tasked with environmental protection, trade, and transport. They are supposed to follow thousands of regulations, at the risk of seeing their operations banned, which excites the bitterness of the petty bourgeoisie against Putin.
This generalized corruption is, to use the expression of Pascal Marchand, an expert on Russia, “a matter of general costs. One must know well to whom, how much, and when to give.”
In 2017, Marchand provided a revealing example of the weight and habits of the Russian bureaucracy: “In 2002, Putin succeeded in getting a law passed to legalize the ownership of land, a debate which had lasted for 12 years. But opposition in the ministries and Parliament forced a stipulation to be added that the transaction could only take place through the intermediary of the local administration. And … these administrations overwhelmingly got around the law. Instead of selling, they rented rural and urban land. The urban lands were the most sought after, most often without calling for bids and for short-term leases. This implied a frequent and lucrative form of remuneration.”
The weight of the Russian bureaucracy can be explained by history, but also by capital’s incapacity to make Russian society run on the basis of a market economy, starting from the level that it reached at the end of the Soviet era. Trotsky had already written in the 1930s that if capitalism had not been in such decline, it would have absorbed the USSR in one way or another, without even needing to overturn it militarily. He added that the ruling layers of the bureaucracy would have helped to do it. But then there was the economic crisis ushered in by 1929, followed by World War II….
At present, global capitalism has been in crisis for 40 years. Nowhere do big companies invest in production in a significant way, not even in the imperialist countries. Although capitalists seek ways to produce wherever the workforce is least expensive, it is increasingly in finance where they make their profits. The same is true in Russia.
The capitalists complain that 30 years after the break-up of the USSR, the investment climate in Russia remains deplorable. Property rights are not always guaranteed in court, corruption reigns, and wheeler-dealers scam their partners. In 2012, the French insurance giant AXA came into conflict with an oligarch close to the government, Malofeev, who, after having pushed it to invest in Russian companies, went about siphoning funds from it.
Not only has production not attracted capital, but since the 1990s, capital has been fleeing at a spectacular rate. Anyone who hoards money in Russia races to take it out of the country. No one can say exactly how many hundreds of billions of dollars have been extracted over the past 25 years, but some economists estimate it to be the equivalent of 2.5 years of Russia’s GDP.
The oligarch Suleyman Kerimov is one of those privileged elite who exports his fortune, while remaining on good terms with the government. In order to get in Putin’s good graces, he financed the construction of the Moscow Mosque in 2015. But he mainly invests abroad, in soccer clubs, insurance companies and airline companies. He is famous for the private concerts on his yacht in the Mediterranean resort of Cap d’Antibes with stars like Shakira and Beyoncé. The French government prosecuted him for tax evasion after using shell companies to conceal his properties in the south of France. In Russia, he claims to have an annual income of only about $200,000, as well as a 580-square-foot apartment. And he says he has no overseas wealth.
Although global capitalism has reintegrated Russia, there has been no economic development at all. The revenue from oil and natural gas sales hid the absence of perspectives for the Russian economy for several years. But the global crisis of 2008 put an end to this bright spot. Then, after 2014, U.S. and European sanctions aggravated the country’s situation, while the price of oil dropped by 75%.
All the same, the government tries to attract the highest possible amount of capital. It has no other choice, since the end of state planning forced Russia to see its international relations on a different basis. The more time passes, the less it can do without modern technology and production tools, which have received almost no investment, since the newly rich share a common preference for short-term profits over investments in the future.
In the 2000s, BP bought the Tyumen Oil Company. The French transport company Alstom bought shares in Russian nuclear power plants and rail equipment manufacturing. The French bank, Société Générale, bought the second-largest Russian private bank, Rosbank. Since the auto market more than doubled in the space of 15 years, the main Western auto companies, Ford, Volkswagen, PSA, and others, have opened factories in Russia.
In 2012, Renault-Nissan even became the main shareholder in the Russian auto manufacturer AvtoVAZ, which makes the series of Lada vehicles. Russian authorities had called on it to rescue AvtoVAZ since they did not want to see the company go bust, especially since this would have meant the closing of the main employer in the city of Togliatti, where its plants are located. The Russian state needed Renault’s capital and expertise. Over several years, about 50,000 jobs were eliminated, constituting most of the workforce. Incidentally, in 2016, worried about a possible explosion of workers’ anger on the level of a town of 700,000 inhabitants almost entirely dependent on a single production complex (of which there are many in the former USSR), the state pushed for the resignation of the CEO, who appeared to be the one responsible for these job cuts.
In manufacturing, foreign capital is especially prevalent in sectors such as automobile, aeronautics, and aerospace, with corporations like the French company Safran having a global influence. But it invests even more in the retail and service sectors.
Appearances can be deceiving for those who visit Russia’s major cities. There are the same brands found all over the world: Coca Cola, McDonald’s, Dannon, Nestlé, L’Oréal, Ikea, etc. The French supermarket chain Auchan has opened more than 200 stores and employs over 40,000 workers. But the majority of what is called foreign investment is concentrated in the Moscow metro area, with the remainder concentrated in only six or seven regions out of 85. And these investment flows must be placed in context, since they often involve funds of Russian origin making a detour through tax havens. First, this money came from Cyprus. Now, it is increasingly coming from Malta. These two tiny countries are supposed to be where the biggest foreign investments in Russia are supposed to come from .
Beyond the tycoons and bureaucrats, the market for consumer goods is limited to the petty bourgeoisie, which developed in their shadow during the boom of the 2000s. Numbering some tens of millions city-dwellers, the petty bourgeoisie buys apartments and cars and is able to consume and travel a little bit, although less so since 2008. The 60% drop in the value of the ruble between 2014 and 2016 has made things still worse. Indeed, according to certain journalists, many petty bourgeois have emigrated to other countries, especially young college graduates who no longer see any future for themselves in Russia.
As for the rest of the population, which consists of several tens of millions of urban and rural workers, they lack the means to have more than limited access to imported goods.
In this context, the state still handles a large part of production, or else it forces private companies to produce. Only the heritage of the Soviet era has prevented the Russian economy from declining to the level of a third-world country.
Entire cities are a part of this heritage, especially in the regions where climate conditions require big investments. In some cities, all of the social facilities that remain, from housing to schools and theaters, are subsidized by private or state enterprises. There is no more planning at the level of the central state, but production equipment and infrastructure dating from the Soviet era are still used.
Railroads are still what transport the majority of goods across the country. The public transportation networks function more or less well everywhere and are relatively affordable. Sometimes, in the big cities, they are modernized; more often, they are left to deteriorate or are privatized. A line is closed here or there, or a bus depot grows old, but at least they still exist. The same is true for heating systems. Starting in the 1930s, the USSR undertook the construction of collective urban heating plants to supply neighborhoods or even entire cities. In order to install individual furnaces everywhere and impose market prices on people, everything would need to be rebuilt. This has been partially carried out in Moscow, but it remains the exception.
This is not to idealize the former USSR, like those nostalgic for Stalinism. But despite everything, these aspects still mark a difference with third-world countries and their slums that never went through industrialization.
Since the sanctions in 2014, the state has found substitutes for imports. The Russian weekly newspaper Argumenty i Fakty announced in 2018 that the mines of the Donbass had reopened, that an industrial lamp factory was opening since lamps could no longer be imported from Italy and Germany, and that a fish processing plant was opening. The newspaper emphasized that in all of these cases, the government’s participation was indispensable. And the examples could go on.
As one U.S. academic study recently stated, what is taking place is a “fusing of the state and the economy”. Its author deplores that: “The state continues to aggressively intervene in markets, passing new regulations, expanding its share of GDP, and ultimately driving out private companies.”
In the most recent years, monopolies have taken on greater importance. The public sector, which is securely in the government’s hands, represents 70% of Russia’s GDP, with oil and gas making up much of this. The banking sector is following the same development. Sberbank, Russia’s main state-owned bank, has at its head a former minister under Yeltsin who, according to the newspaper, Vedomosti, was forced “to transform himself from a liberal economist into an authoritarian ruler”. In 2017, state banks distributed more than 65% of their loans to individuals and 71% to businesses.
In terms of international relations, Putin himself appeared as well disposed to the West at the beginning. But the attitude of the imperialists states had never truly changed since the fall of the USSR. Despite the end of the Cold War, they sought to expand their spheres of influence into the former Soviet republics while distancing them from Russia. In 25 years, NATO added 13 new member states in Eastern Europe. At present, it is carrying out increasing numbers of military exercises and shows of force at the Russian borders.
In an interview in June 2018 by Izvestia, former Austrian chancellor Wolfgang Schüssel recalled, “[In 2001] we discussed the integration of Russia into Europe [with Putin] a great deal. At the time, I had the feeling that Russia, and Putin personally, demonstrated a great openness. But afterwards, I felt on several occasions that we had missed the boat. To begin with, there was the first ‘Orange Revolution’ in 2004, Georgia, …, then the financial crisis of [of 2008] and a new ‘Orange Revolution’ [in Ukraine in 2014]. At present, Putin is a major player on the international scene, but in 2001, he had not yet become one. In 1998 … Russia was afraid, and the country was in total bankruptcy. Putin resolved this problem, and this was such a historic success that this changed things a lot, notably in the morale of the Russian elite.”
In order not to remain isolated, Russia looked around for economic, political, and military partners. Although several attempts to ally with the former Soviet republics were hardly conclusive, a Eurasian economic union with Belarus, Kazakhstan, Armenia, and Kyrgyzstan was finally created in 2015. Russia is also a member of the BRICS group of so-called developing countries that hope to hold their own against the big powers. Along with Russia, they also include Brazil, India, China, and South Africa.
However, it is primarily in Asia, and especially in China, that Moscow is now looking for openings, even though this is really a choice by default. Important investments were made in the Russian regions of the Middle East. In the far north, the new natural gas complex of Yamal allows methane tanker ships to reach Asia through the Arctic Ocean in 15 days, between June and November, as opposed to one month through Europe and the Suez Canal. But again, because of the country’s technological backwardness, the Russian state had to rely on Total, the French oil company. China, which just signed an agreement to purchase natural gas for 400 billion dollars over 30 years, has also become an essential supplier of capital goods for Russian industry.
Russia was forced to fiercely negotiate with the World Trade Organization for 18 years before it was finally allowed to join in 2012. Whatever benefits it was supposed to get out of this deal were negated by the sanctions that were imposed after the Russo-Ukrainian crisis. In the same way, Russia was excluded from the G8 after the annexation of Crimea in 2014. The Russo-Ukrainian conflict aggravated Russia’s already difficult relations with imperialism.
In 2014, the new Ukrainian government led by Petro Poroshenko, financed and armed by the United States and containing fascist groups, tried to break with Moscow. Poroshenko declared that he wanted to join the European Union and become a member of NATO. But Moscow did not want to lose its naval base in Sebastopol, Crimea, which was the main port of the Russian fleet. Russia leased the base from Ukraine, and the lease didn’t expire until 2043. Russia also did not want to run the risk of having NATO install yet another base on its border.
Under the pretext of protecting the Russian-speaking inhabitants of Crimea from the nationalist Ukrainian government, the Kremlin orchestrated a surge of chauvinist propaganda in the media, using the slogan “Crimea is ours!” It sent soldiers to take control of the peninsula and to organize a referendum there. With 96.77% of votes in favor, this referendum served to justify the annexation of Crimea into the Russian Federation, which was celebrated with great ceremony on March 18, 2014. On the same day, the first U.S. and European sanctions fell on Russian politicians, oligarchs, and companies. These sanctions have since been broadened several times.
Immediately afterwards, war broke out in eastern Ukraine, where Russia supported the formation of the separatist republics of Donetsk and Luhansk. Putin did not intend to annex eastern Ukraine, but he wanted to pressure the Ukrainian government in Kiev by depriving it of its mines and a part of its heavy industry. However, with Western support, Kiev did not concede anything, and a devastating conflict ensued, despite the Minsk Protocol, which was supposed to lead to a cease-fire. More than 10,000 deaths and hundreds of thousands of refugees have been counted so far.
As for the inhabitants of Crimea, although they have escaped from a direct war, they are forced to reckon with a depressed economy and price hikes. Over the past 6 months, the average monthly salary in Crimea has fallen to about $225, which is less than half of the average salary in Russia.
When Russia intervened in Syria in the autumn of 2015, it did so with the approval of the United States. The Syrian opposition, backed by the U.S. was incapable of overthrowing Bashar al-Assad, and ISIS had profited from the chaos that imperialism had created in the region to proclaim a new state there. By coming to the rescue of the Syrian dictator, Putin made Russia an indispensable partner of the imperialist powers. But as soon as the Islamic State in Syria was defeated, the U.S. tried to retake control of the situation, and it began to pour criticism on Russia’s support for al-Assad’s regime.
In this murderous war, all of the combatants openly disregard the lives of the Syrian people. Putin’s disdain for the Russian people was shown in another sense. The Kremlin copied what the United States did in Iraq and Afghanistan by recruiting thousands of mercenaries through private companies, which allows it to avoid responsibility for the losses incurred by the regular army, which comes to more than 300 combat deaths.
Putin goes before the Russian people to denounce the U.S. drive for domination and “a unipolar world” where “the bloc of brute force is gaining ground.” He uses this to justify an increasingly belligerent nationalism, as well as how he defends the interests of the Russian state using the methods of the imperialists themselves, showing contempt and cynicism for populations, by every means possible.
The Kremlin’s nationalism is in line with the nationalism of the Soviet era, starting when Stalin broke with the internationalism of the Bolsheviks. Invoking the supposed historic continuity of the Russian state, Putin blends the symbols of the Czarist era with those of the Stalinist period. On the one hand, he uses the czarist double-headed imperial eagle on the state coat of arms. On the other hand, he recently reintroduced the medal for “Heroes of Labor of the Russian Federation,” which recalls Stalinism and the Stakhanovite movement.
Each year on May 9, Victory Day celebrates the victory over Germany during World War II, which is called the Great Patriotic War in Russia. This war, which is the occasion to glorify the greatness of Russia and the unity of its people in the face of aggression, is also the pretext for a certain rehabilitation of Stalin.
In 2005, Putin caused a sensation by declaring that the collapse of the USSR had been the “greatest geopolitical tragedy of the 20th century”. He immediately clarified this by saying that if you don’t regret the end of the USSR, “you don’t have a heart”, but if you wanted to go back to it, “you don’t have a brain”. This is the only sense in which he finds favor with the USSR, given that he openly condemns the October Revolution.
There was only a small commemoration of the 100-year anniversary of the 1917 revolution. The official message was that the revolution played into the hands of foreign powers and brought about a great deal of misfortune. A strong government would be better! On the day of the anniversary of the October Revolution, Putin preferred to celebrate a Russian military victory over Poland which took place three centuries earlier, on November 7, 1612.
In 2005, the presidential administration orchestrated the creation of a pro-government youth movement called Nashi (Ours), which was tasked with organizing public demonstrations in support of the regime. There are also the patriotic clubs with sponsors in high places, such as the Night Wolves biker gang. Over the years, Putin has increasingly displayed his closeness with European ultra-conservative nationalist movements like Marine Le Pen’s National Front in France. He provides them with support, if not a model to follow.
And there is not only nationalism. After having gotten Czar Nicholas II canonized in 2000, Putin has helped the Orthodox Church to return to the fore. He gave back monasteries and other buildings that had been confiscated from the Church. The Church has its own television channel. It has won the introduction of religion in public school curriculums and the adoption of a law punishing “offenses of religious believers’ feelings” with prison. Orthodox priests are a part of all public celebrations and inaugurations. Putin and Medvedev never miss an occasion to be seen with Patriarch Kirill, who is incidentally known for his luxurious lifestyle.
When the USSR was under the rule of Stalin and his successors, the so-called communist party was the ideological pillar of the state, controlling and surveilling the domains of ideology and morality. Today, Putin wants the Church to replace it in this role, since the bureaucracy and the oligarchs know that they cannot count on the spontaneous support of the population.
At the same time, the condition of women is moving backward. The Bolshevik government established the right to an abortion in 1920. Prohibited by Stalin in 1936, it was reintroduced in 1955. The Church today is waging a campaign against this right. The Church has already gotten a law passed mandating that women must listen to the heartbeats of a fetus before any abortion. And in 2016, certain deputies attempted to get abortions taken off the list of health care procedures that are reimbursed. In the same vein, in 2017, a law reduced the punishment for domestic violence to a simple fine. After the Weinstein affair made it easier to speak out, several women, including the spokeswoman of the Ministry of Foreign Affairs, accused a deputy of sexual harassment. But the Duma cleared his name. The presidential spokesman declared that Weinstein’s accusers were prostitutes.
In 1918, the Russian Revolution also decriminalized homosexuality, but Stalin had made it a crime again in 1934. Eighty years later, homosexuals continue to suffer from discrimination and are made the targets of prejudices encouraged from above. In 2013, the Duma enacted a law prohibiting what it called “the propaganda of non-traditional sexual relationships among minors.”
Finally, in this country that of