From the journal of our French sister organisation: Lutte de classe n°234 – September-October 2023.
This summer’s rebellion by Prigozhin and his mercenaries, and the circumstances surrounding it, bear witness to the fact that the Kremlin’s “special military intervention” in Ukraine has not only tested Russia’s economic, human and military capabilities, but the regime itself. It also revealed the widening fractures in the Russian bureaucracy, which forms its base and which is the more or less direct descendent of the Stalinist bureaucracy in alliance with that layer of wealthy businessmen, Russia’s post-Soviet oligarchs. This bourgeois stratum, which itself came out of bureaucracy, has prospered under its wing through Russia’s increasing integration into world markets - up until now. Today, however, the oligarchs are more or less openly demanding to be spared the repercussions of the Kremlin’s policies, as Western sanctions have affected their business interests, as well as their personal interests, by blocking their assets and accounts in Europe and America and prohibiting them from travelling and enjoying their yachts, villas, etc. , abroad. Some have taken their case to the American courts, arguing that they had no involvement in Putin’s war. This is in line with the anti-war stance of other oligarchs and their more general desire to free themselves completely from the tutelage of the bureaucracy and its system.
Like other wars before it, the current war acts as a catalyst for social tensions and, ultimately, as an “accelerator” of the class struggle. It impinges not only on the relations between the bureaucracy and the oligarchs, but Kremlin policy, which in the context of this war is aggravating an already difficult situation for the working classes.
A multifaceted catastrophe
The war ravaging Ukraine was never meant to be a “short” war. Ever since the Russian army was ordered to invade on February 22, 2022 the strategists of the imperialist powers have repeatedly said that it was going to be a long haul. And they have been doing their utmost, delivering ever more weapons to Kiev, to keep it going.
Although the leaders of both sides treat their losses as a state secret, Russia and Ukraine are said to have between them, a total death toll of 500,000 civilians and soldiers, according to the UN. For Russia, it’s no longer just a question of casualties among its professional army, or the “volunteers” recruited from among the poor in the deprived regions - or from prisons - as was the case at the start of the conflict. Today Ukrainian drones are striking targets in Russian provinces bordering Ukraine, if not further from the front and killing and injuring civilians. Added to this are all the civilian victims of four provinces in the south and east of Ukraine, annexed by Russia in 2022, as Crimea was in 2014.
Indeed, this figure of half-million dead and wounded announced by the UN will be quickly surpassed, in what commentators call “a war of attrition”, devouring ever more human beings and annihilating everything which is necessary for social life.
NATO has never fought its wars with tanks and missiles alone, and as Putin has acknowledged, Western sanctions are taking their toll on the Russian economy. But to claim, as some in the media do, that Russia is so exhausted that it is asking weak North Korea for weapons, is far from reality. The same is true when they and their governments present Ukraine as necessarily democratic because it is pro-Western, when Zelensky’s regime is just as corrupt as Putin’s, and when there is little to choose between them when it comes to attacks on the basic rights of workers and the national minorities on their soil.
Nor should we be surprised that the Western media and leaders remain silent on the real causes of this war: the imperialists’ drive, uninterrupted for over thirty years, to push Russia out of its zone of influence in Europe, and therefore out of Ukraine, by making the Ukrainian state a pawn of their policy, and its population the weaponised arm and the victim of this policy.
While fighting each other by proxy, the leaders of the Russian side and those of the opposing side, including their Western sponsors, seem to fear that, as the confl ict settles in over time, its drastic consequences for the populations will eventually turn their passive acceptance of the war and those who bear responsibility for it, into opposition to both. Hence the preventive and highly visible measures taken by Zelensky and the repeated purges within a state apparatus made up of predators who want to enrich themselves even faster than in peacetime. Does this give the impression that the population is prepared to give up their lives for the sake of people who accumulate fortunes through racketeering, sheltered far from the front line? Definitely not.
In Russia, Putin also plays this game. But, since Wagner’s revolt, he has had to navigate between opposing poles: not to ignore the muted discontent of the population when it comes to the massive conscription and the human and social cost of the war in general; not to alienate the military hierarchy, which the Prigozhin affair has shown to be less and less unanimous in its support for the Kremlin; and, most seriously for the head of the Russian bureaucracy, there is the state apparatus itself, which we see torn between clans, which promote policies other than that of the Kremlin. In the period 1999-2002, Putin built his populist appeal because he had re-established a certain stability, by restoring “vertical power”, that is, the supreme authority of the state, after the decade of chaos and disintegration that had followed the end of the USSR. It is the stability of this regime which could be undermined, by the current situation.
Soaring prices and poverty
If, in Russia on the eve of the war, only 1% of the population already owned 60% of the wealth, the war has widened this gulf of social injustice even further. This is illustrated by the publication of the latest balance sheets provided by the banks. They show a yawning gap between the sectors that operate on behalf of the wealthiest and those which supply credit (loans) to ordinary people, from the petit bourgeois buying a home to workers struggling to make ends meet.
The Central Bank described Russian bank profits for the first half of the year as an “absolute record”: 1,700 billion roubles! The business daily, the Kommersant, noted that foreign exchange transactions, boosted by capital flight, contributed to this success, but that the volume of loans to individuals had plummeted.
In its own way, this contrast reflects the class opposition between the fortunes of the wealthy and those of working people. Working class people are less and less able to obtain credit, even for everyday consumption. On the other hand, companies, their owners and high-ranking bureaucrats have protected the part of their wealth that was in Russia: they have converted it into dollars or taken it out of the country with the help of some of the Russian banks, which have taken advantage of it.
This is certainly nothing new, but it is noteworthy that a large part of the value created in the country, the product of the exploitation of the working class, fl ows into the global circuits of capital, feeding the profi ts of the fi nancial sector of imperialist states and their tax havens. . .
Officially, capital flight quadrupled from the summer of 2021 to the summer of 2022 (so that includes the first 6 months of the war), reaching $253 billion, or 13% of Russia’s Gross Domestic Product. Media reports have recalled what happened in the 1990s, and again in 2008 during the last global financial crisis. But this time, the financial effects of the departure of certain western companies have been added to the mix, even if this is intended to be temporary, and even if more than half of the multinationals operating in Russia, not only American, but also French and German, have no intention of leaving. For them, war or not, profits come first.
That said, massive capital flight and western sanctions have caused inflation to soar and the rouble to plunge. Since January, it has lost almost 30% against the dollar and the euro, making imported goods more expensive, as well as other locally-produced necessities, which are already costing the working class dear.
What has been published of Putin’s meeting with the head of the federal bailiffs’ service gives a more concrete idea of this impoverishment. Of some 140 million Russians, 13 million - almost 10% - can no longer pay their debts. Consumer credit, fi nes, taxes, housing costs. . . that’s $20 billion in accumulated debts. This represents just 8% of all the money the rich and super-rich have taken out of the country in a year, yet Putin has declared that these debts cannot be forgiven, as “the economy would collapse”. To avoid this, the chief bailiff points out that although “there’s practically nothing to take from these people, we’re trying anyway. . . ”. This makes it abundantly clear what the poor are facing and the methods the owners and rulers use against them.
Unsurprisingly, some strikes have been breaking out: for higher wages on the Moscow metro, among healthcare workers in Novokuznetsk. But more often the stoppages are over non-payment of wages, over several months, something which used to occur in the 1990s and is now happening again, against the backdrop of slowed or halted production in factories which can no longer get supplies and technology from the West, or due to the disengagement of Western firms, as in the automotive industry. It should be noted, however, that the authorities tread carefully when it comes to strikes in major industrial sectors. Especially if there is a tradition of workers’ resistance that could feed popular discontent. At the end of August, this is what the authorities tried to avoid in the Kuzbass, Siberia’s main coal basin, when the workers from three mining companies which were closing down threatened
to strike over non-payment of back-wages. The deputy governor of the Kemerovo region immediately promised that the state would pay them, but added that they needed to look for another job. . .
flourishing military-industrial complex
The Russian population was already shrinking before the war, with a resulting shortage of labour. The list of causes - both social and demographic - is long: repeated crises, lower living standards, falling birth rates and rising death rates, fears for the future, young graduates leaving for abroad and the retirement of the baby-boom generation. However with the advent of the war, the shortage of workers has become more critical. In response, the state has turned more and more to the former Soviet republics for recruitment. Tajiks are invited to come and work in construction, Uzbeks in the services sector, Ukrainians and Moldovans just about everywhere. . .
Wages in Russia might be low, but they are higher than back home, enabling these workers to send money to their families. However, with the fall in the rouble’s value, even against the somoni (Tajikistan’s currency), a Tajik worker for instance, is able to send home only half the amount that he or she could, before the war. As a result, between 2019 and 2022, the number of workers from the former USSR has fallen by 15%, and all the signs are that this trend is set to increase.
This means that economy will be short of millions of hands and brains. All the more so, as the army has taken hundreds of thousands of men out of the industrial workforce, transport and commerce, where today, almost all the workers who remain are women. Some workers joined the army against their will, others signed a contract - not always respected, hence the sometimes collective protests - promising pay three times higher than their salaries. But a million men disappeared from the job market, having fled Russia to escape being sent to the army and most of them are qualified young people, engineers and computer specialists, whom companies are unable to replace. The intensification of the war is exacerbating this situation.
To replace the armoured vehicles, helicopters and cannons destroyed en masse in Ukraine, and simply to produce the shells and bullets the army needs, military factories have to work at full capacity. According to former Prime Minister and Deputy Chairman of the Security Council, Dmitry Medvedev, from now on “the assembly lines will work on continuous shifts (3 x 8 hours). And the military-industrial complex will produce as many armaments as necessary”.
Russia has the means, inherited from the former Soviet Union, to produce these armaments. Its military-industrial complex (the VPK) is a high-performance, highly concentrated and state and para- state public network of factories. A colossal share of the government’s budget has been redirected to the VPK. Before the war, these factories employed 2. 5 to 3 million workers. With the war and the famous 3 x 8-hour shifts, they probably need twice as many.
To find workers, job search services are full of tempting offers. For example, one factory is offering 100,000 roubles (£830 per month) for a shell-mounting machine operator, even without experience or training - a non-skilled worker’s wage previously reserved for Moscow or St Petersburg. The need is such that companies are offering to pay for training, relocation and accommodation if you come from elsewhere, even far from a major centre, as long as you come to assemble shells.
If, as in any war, the armaments sector attracts manpower with its guaranteed jobs, if it monopolises a growing share of the budget, this can only be to the detriment of the rest of the economy. In Russia, the militarisation of society is disrupting tried-and-tested economic circuits. This is what managers of other sectors and factories, whose production directly concerns the needs of the population, are saying. They are complaining of staff shortages in all their professions, and some are pointing out that in the agri-food sector, this will result in disruptions to food supplies for the population.
To avoid this, at least for a while, and to prevent the population from saying that it lacks everything, while the war industry lacks nothing, the government will probably resort to imports. But with the outflow of foreign currency that this implies - and it won’t be long before the BRICS, including Russia, agree that local currencies can replace the dollar in their exchanges - the rouble will continue to weaken, and inflation to swell. Ordinary people, pensioners and workers will pay a high price.
Putin and the other leaders of the bureaucracy, who pride themselves in defending the interests of the “Russian people”, only have cannons or coffins, to offer them instead of butter. They are waging war, both on the Ukrainian front and on the domestic front, against the working classes of Ukraine - and Russia.
Between putsch and crash
At the end of June, Wagner’s mutiny was able only to mobilise a miserable 25,000 mercenaries. Compared with the 1. 15 million men of the regular army, these paramilitaries have only a marginal role in the Kremlin’s war. Could this mini-putsch, which aborted after 48 hours, have spread to other parts of the army? Maybe, maybe not. In any case, this did not happen. Despite this, Prigozhin and his raggle-taggle “army” worried the Kremlin enough for it to send Putin to distant Valdai and for ministers to flee the capital, where security forces set up barricades.
Certainly the Russian army did not follow Prigozhin’s lead, and even less so the National Guard, a numerous and over-armed body that Putin created separately to protect himself. But it is a fact that, as Prigozhin’s armoured convoy advanced towards Moscow, he was able to occupy large cities without firing a shot. The same senior officers who gave no orders to stop Wagner remained silent during the putsch, with the exception of one general who had just been arrested for having sympathised with Prigozhin, and who was forced to urge him to appear in front of television cameras.
In view of the side-lining of senior army personnel and the arrests that followed, it seems that several officers at the top of the army were, alongside Prigozhin, accused of sabotaging the war, “betraying the homeland”, and of using soldiers as cannon fodder; accusations which Prigozhin himself had been launching for weeks against the Minister of Defence and the Chief of Staff - and eventually against Putin himself. In fact supporters of the ultranationalist and war-mongering right had been echoing Prigozhin with impunity for months, including some belonging to the top layers of the civil bureaucracy.
One should remember the links that this thug had established with Putin in the early 1990s, when bureaucrats, Mafiosi and members of the KGB were carving up the country. He owed his rise to the man who became president at the end of 1999, and who would give him carte blanche to put his mercenaries at the service of the Russian state, in Syria to rescue the dictator Assad, in Africa alongside putschists wanting to emancipate themselves from “Françafrique”, in Bakhmut where, at the cost of thousands of Russian and Ukrainian deaths, Prigozhin gave Putin a victory, the likes of which he had not had since the capture of Mariupol. But it should also be remembered that Prigozhin only managed to replenish the army’s numbers in Ukraine, by recruiting thousands of “volunteer” conscripts from prisons, with the Kremlin’s authorisation.
All this propelled the Wagner boss to the forefront of the scene. He must have felt he was untouchable, given that he took the risk of attacking by name the civilian and military leaders of the army who Putin himself had appointed. Putin denounced him as a traitor. And it justified a death sentence, apparently: just two months later, Prigozhin and his lieutenants were liquidated when their plane exploded.
But if settling the score with Prigozhin serves as a warning to those at the top who might be tempted by such an adventure, it has in no way resolved the basic problem: the crisis of the regime that this event has further exposed. Whatever Prigozhin’s real aim (he denied he was targeting Putin), it was those who run Russia that he was putting into question, and therefore he was threatening the whole regime.
This raises a question mark over the sustainability of a system which ensures the domination and privileges of millions of bureaucrats, a hundred billionaires, the oligarchs, and tens of thousands of lesser bourgeois, in fact, the very existence of the Russian state which, despite everything, remains the guarantor of the world order in a vast region of Eurasia. A world order that the imperialist powers, first and foremost the United States, would prefer not to see disrupted, at least at the current stage of the militarisation of the world. For instance, it would not suit imperialism if today’s Russia broke up into smaller entities pitted against each other - as happened under Yeltsin when the USSR imploded - or if the Russian state was weakening so much that it no longer had the capacity to maintain public order, especially against an uprising of the people. In fact a month before the war in Ukraine, Putin was already called upon to save the interests of local bureaucrats and those of the oil trusts against the proletariat of Kazakhstan.
The American government, although it constantly makes statements against “Putin and his war”, refrained from commenting on this mutiny. Of course, there is plenty of time yet. . .
Oligarchs and bureaucrats
Mikhail Khodorkovsky, the oligarch who received ten years in prison and confiscation of “his” oil empire for wanting to dispose of it without first asking Putin, now lives in London, more than comfortably. It was from there, during the putsch, that he called on the Russians to “help” Wagner’s leader, explaining that this could help get rid of Putin, if not his regime. He also specified that “we” would then have to get rid of the “criminal” Prigozhin.
Even if this gentleman is perhaps not, as he presents himself, one of the spokespersons for the pro-Western opposition to Putin, the fact that he advocates the establishment of Western-style capitalism in Russia is public knowledge. And, coming from the former most powerful oligarch in the country, his words resonate with many Russian billionaires. In the early days of the war, many high-profile oligarchs such as Deripaska and Fridman, clearly declared their opposition to it. Others, such as Roman Abramovich, refused to support it openly. Six other oligarchs publicly renounced their Russian citizenship, deeming it more prudent, and rightly so, to seek shelter abroad. Indeed, the gazettes take great pleasure in listing all the cases (around thirty) of “Russian sudden death syndrome” which have affected Russian businessmen and senior officials who, having disapproved of, or criticised this war, had the crazy idea of jumping from the 15th floor of a hotel or of “committing suicide” at home. As a former member of the Yeltsin and Putin teams interviewed by Le Monde commented: “In the business world, no one supports this madness. But expressing this view is to take too great a risk”.
The real risk for Putin and his regime is that such a situation endangers the pact that he had made with the oligarchs after he had barely come to power. He had said: “Don’t worry about politics, pay your taxes and the State will protect your assets”. Everyone except Khodorkovsky respected this pact willingly or unwillingly and it was on this basis that the high bureaucracy and the world of Russian style capitalists prospered, if not in symbiosis with the state, at least in close collaboration.
This agreement ensured a certain prosperity for both parties, and stability for the regime as a whole, but that was in peacetime. The war, into which the Kremlin was forced by pressure from the imperialist powers, has reshuffled the cards. The oligarchs, at least some of them, no longer have what they want: they can no longer lead the lifestyle of big capitalists between New York, London, the Côte d’Azur, Courchevel, etc. , some of their assets have been frozen, the businesses of their groups in Russia have lost their lustre. The number of Russian billionaires and their average financial resources has, for the fi rst time, declined in the global fortune charts.
Certainly, for the moment, this discontent has not found expression in any organised force. But, given the overlap between the interests of bureaucrats and those of the new Russian bourgeoisie, it could be that what is still only discontent, also affects sectors of a bureaucracy which Putin has headed for almost a quarter of century. And these sectors could make common cause with the oligarchs; with the program of establishing a capitalist regime that Navalny, hero of the Russian small and middle bourgeoisie, calls “clean and honest, and without thieving officials”.
We are not there yet and Russian law, such as it is, practically guarantees that Putin will remain president for life. For his regime to continue its rule, it is necessary that his social base does not crack further. The tensions that the war generates are pushing in this direction: a crisis is brewing, which the war is maturing. For Putin it is therefore crucial that the wealthy and the privileged of Russia present a common front alongside him, against the working class and poor. Especially if the war, by worsening their lot, leads them to fight their oppressors.
September 2023