Translated from the journal of our French sister organisation: "Lutte de Classe" #223, April 2022
Everyone was shocked by the invasion of Ukraine by Putin's army on February 24. Who could even have imagined the possibility of a war between Russians and Ukrainians let alone the horrifying massacre of civilians when, until recently, most Russians and Ukrainians considered themselves as one people, despite the border that has separated them for three decades.
Today however, as the leaders on each side try to intoxicate "their" populations with nationalist fervour against the other, that perception could change radically, if it has not changed already.
It came as no surprise
For months, American leaders were announcing a Russian attack on Ukraine as imminent. Whether or not it was a prediction, it was certainly a propaganda tool. Indeed, before turning into an open confrontation, the tug-of-war between the two sides gave rise to a series of large-scale military manoeuvres: on the border of Ukraine for the Russian army, in the Black Sea and the Baltic states for NATO forces. These armed manoeuvres were there to support the arguments that diplomats and statesmen from both sides exchanged during repeated meetings where the main topic was the possibility of Ukraine joining NATO.
For Russia, this was out of the question. It would have meant that Ukraine, a country with which Russia shares a common past and language, as well as countless family and cultural ties, would have gone over to the other side. NATO's military encirclement of Russia would have been complete and its troops and missiles in direct contact with Russian borders. NATO, a Cold War military bloc created against the Soviet Union in 1949 by the United States and its allies, did not disappear with the collapse of the USSR. And this, despite the disappearance at the end of 1991 of the official justification for NATO's existence, i.e. a super-powered and threatening USSR. Yet this military alliance has continued to expand and strengthen over the past three decades, positioning itself almost exclusively against Russia.
When several months of international discussions about NATO's aims in Ukraine came to nothing, Putin decided, on February 21, to recognise the independence of the Luhansk and Donetsk Republics, secessionist entities in Ukraine's Donbas. In the great Russian chauvinist (and Tsarist!) language that he favours, Putin presented modern Ukraine disparagingly, as "a creation of Bolshevik Russia", denying any legitimacy to a Ukrainian state. He even proposed scornfully, that it should really be called "Vladimir Lenin's Ukraine" because, during the 1917 revolution, it was Lenin who recognised the Ukrainian nation's right to self-determination. In fact the Bolsheviks had accorded this right to all the national minorities oppressed by the Tsar, knowing they could rely on the mobilization and the class consciousness of the exploited (of Russian, Ukrainian or other nationality). But, as Putin admiringly pointed out, Stalin had proceeded to deny it, holding the USSR under his iron fist. Putin represents perfectly the reactionary, chauvinistic and anti-working-class Russian bureaucracy. He is a declared enemy of Bolshevism and of the rights of peoples and an advocate of national oppression in all of its Tsarist or Stalinist variants.
The recent origins of the present conflict
Ukraine has for years been at the heart of a confrontation between, on the one hand, imperialism the advanced bourgeois states that dominate the world for the benefit of their big capitalist groups and on the other, the Russian bureaucracy. Pro-Western Ukrainian politicians gained access to power for a time with the "Orange Revolution" in 2004. But it was the "Maidan events" in central Kiev a decade later that marked a turning point. Following demonstrations that the repression failed to quell, President Yanukovych, hated by the population who associated him with the looting oligarchs and bureaucrats, had to flee. For years he had hesitated between the West and the East. But in 2014, Washington, which wanted to prevent him from asking Moscow for the financial means to cope with the pressures of Western banks and institutions, facilitated his overthrow, seemingly by popular protest, although it was in fact the ultranationalist far-right which achieved it, against a backdrop of mass discontent.
The Kremlin responded to this power grab with a power grab of its own. It annexed Crimea, a territory of Soviet Russia that Khrushchev had ceded to Ukraine in 1954, but which was still a base for its Black Sea Fleet. It also provoked the secession of the eastern Donbas, the Russian-speaking mining and industrial region of the utmost importance to Kiev. Kiev did not have the strength to retake Crimea so it launched its army into Donbas, obtaining the more or less discreet support of NATO, which sent military advisers and modern weapons to the region, and the open support of far-right paramilitary groups <nbspl/>the very same ones which played a central role in Maidan and who today share command of Zelensky’s territorial defence. For the past eight years, the imperialist camp and Russia have been confronting each other in the Donbas by proxy through their respective allies: the troops of successive Ukrainian governments and the pro-Russian forces in Luhansk and Donetsk. It would be wrong to call the war in eastern Ukraine "limited", since so much destruction has taken place on both sides of the frontline. The conflict has been devastating for the population, with 15,000 people killed and two million forced to move.
The whole of Ukraine plunged into war
Since the Russian army entered Ukraine this February, it has ravaged the major cities, caused thousands of deaths among inhabitants and has forced a quarter of the population onto the roads of exile. Putin may bomb Ukrainian civilians as mercilessly as NATO bombed Serbian civilians in Belgrade in 1999, and he may beprepared to raze Ukrainian cities to the ground as he did Grozny, the capital of "Russian" Chechnya, in 1999, but the fast victory he had hoped for is not going to happen.
We are not going to discuss here how military operations have gone wrong, or the insufficiencies of military and political intelligence (the FSB) as alleged by the Kremlin. Two Russian generals have been arrested after being accused of having delivered strategic information that was closer to the Kremlin’s expectations than to reality. This has the advantage of "explaining" the failures of Putin’s "special military operation" and, above all of exonerating him. But for the regime it has the disadvantage of underlining the price that an ultra-authoritarian leadership has to pay for relying on the all-powerful FSB <nbspl/>both a political police force and an intelligence agency<nbspr/> and for having, at the top of its power hierarchy, a leader who does not like to be crossed.
No one knows when and how the war may end. But it has already shown that Putin's contempt for the Ukrainian people has succeeded where years of agitation by Ukrainian nationalists had failed: he has united the population, both Ukrainian- and Russian-speaking, behind "their" state, " their" rapacious oligarchs and "defence of their homeland".
One example among many is that of the iron and uranium miners in the Russian- and Ukrainian-speaking regions. In December 2020 they went on strike together for wages, against the private owners of the mines and against the Zelensky government. Fifteen months later, the bellicose nationalism of the Russian state has changed the situation. The invasion has strengthened Ukrainian nationalism, so that the Ukrainian state is now in a position to hold "its" workers in the clutches of this notion of "sacred national unity". It is no surprise that the Ukrainian government has entrusted extreme right-wing nationalist groups with the task of enlisting, training and sending members of the territorial defence into combat, whether they volunteer, or are conscripted.
From there, to claiming that the defence of Ukraine is based on a mobilised population, is, however, the difference between reality and propaganda. Before even thinking about going to fight, the majority of the population has been trying to survive, to protect itself from bombs, to get food when stores are empty or destroyed, to find a bus or a train leaving for somewhere far from the combat zones.
But it is a fact that Russian soldiers are seen everywhere as invaders. The Kremlin had led them to believe that they would be welcomed as liberators. Perhaps that is the reason why some Russian units who saw unarmed civilians in front of them and understood what was being cried out in their own language, stopped their tank columns or reversed their trucks; others showed very little eagerness to fight. Whereas Ukrainian soldiers, galvanised by the strong national feelings the invasion has provoked, are convinced they are defending their families, their cities, their country.
Even if the Western media concealed it at the beginning, the resistance encountered by the Russian army owes much to the support, both in military and in personnel terms, that NATO has been providing to Kiev for years. They have sent instructors and conventional weapons, set up training camps, carried out joint manoeuvres, transmitted military intelligence, equipped airports for large carriers delivering the latest weapons... The United States and the European Union have just doubled their military aid to the Ukrainian government. Or, to put it another way, they have doubled the subsidies they provide to their respective arms manufacturers! For the latter, it is a blessing. They can probably even claim a seat in paradise for their "good deeds", since western statesmen keep justifying their war profits with incessant speeches on the moral necessity of helping an attacked people to defend itself! Their speeches are also intended to align western public opinion behind them in present and future wars.
This conditioning could be considered a rehearsal at a time when tensions are being exacerbated everywhere around the world. Against a background of a worsening global crisis, the sound of jackboots is getting louder.
What the Russia-NATO confrontation reveals
As the saying goes, war is the continuation of politics by other means. The fact that the ruling classes resort to such extremes highlights internal and external tensions that they are no longer able to resolve by resorting to the usual methods of government. The current crisis reveals these contradictions, and at the same time amplifies and exacerbates some of their manifestations.
The accumulation of unresolved economic, social, political and strategic problems since the USSR disappeared, is at the root of this war that opposes the two main states that emerged from the break-up of the USSR.
Commentators present Putin as a dangerous madman. As if focusing on the personality of this or that leader could explain everything! But for the opinion makers, this has a great advantage: it hides the real causes of the war, not only on the Russian side, but also on the side of the imperialist states.
The roles being played by the Russian and Ukrainian leaders are clear. The role of head of the Russian bureaucracy (played by Putin for the last two decades) is sinister: bellicose abroad and more and more repressive on the home front. On the Ukrainian side the role (played by Zelensky) is one of ignorance of the realities: an actor turned businessman whose oligarch sponsors have put him at the head of a fragmented Ukrainian state, plagued with corruption and colonised by the far-right. His western supporters have made him an icon of democracy! But beyond the staging of the respective roles of Putin and Zelensky their actions fit into a frame in which many forces beyond their control are entangled. And we can only understand the range and the nature of those forces, which have been at work for many years, if we link them to their source: the processes that led to the breakup of the Soviet Union at the end of 1991.
The rush of bureaucrats to the West
The partition of the USSR into fifteen states, which were themselves often threatened with breaking up, was the result of the will of millions of bureaucrats and of their uninhibited predatory activity.
Soviet bureaucracy was a social stratum composed of administrators, of managers great and small, which came to power only a few years after the victorious workers' revolution of October 1917. It was able to escape the control that the working class and its party, the Bolshevik Party, had at first exercised over its administrative apparatus due to the physical, moral and political exhaustion of the Russian working class. Over the course of several years, Russian workers had successively led a victorious revolution, won a civil war and started to build their own state, against a background of the ebb of the revolutionary tide that had led to Europe-wide uprisings of oppressed masses who aspired to sweep away the system that had driven humanity to the butchery of the First World War.
Stalin represented the interests of the bureaucracy at the top of the state and the party. Having eliminated the staunch opposition led by the followers of Lenin and Trotsky, the bureaucracy was able to assert its privileges as a growing parasitic group living off the state-run and planned economy. The social position of each bureaucrat, and the privileges attached to it, depended on their place in the ruling apparatus, and on the fact that state power did not question their right to profit materially from the collective parasitism of society by the bureaucrats.
The USSR was killed off by the desire of an overabundant privileged social stratum to free itself from any central control over its plundering of the economy. Stalin had established this control in the 1920s, to stop the most rapacious and irresponsible bureaucrats from jeopardizing their own system. To keep the bureaucrats in line, he had to resort to extreme means, and the members of the privileged caste had no way of escaping the bloody terror of their own regime.
After Stalin’s death in 1953, the state power lightened its control over the bureaucracy just enough to ensure that the bureaucracy’s economic gains, theft and social parasitism could continue to proliferate and to send the Soviet economy into a deepening slump. But since the bureaucrats’ parasitism was not officially recognised by the law, weaker state control was not enough to guarantee that their legal and illegal advantages and revenue would not be questioned or threatened by the system itself, a system which had secured the bureaucracy’s collective interests against those of the population. Their individual status and revenues could only be guaranteed through a completely different social and economic structure, one that could only be built on the private ownership of the means of production and trade with the race for individual profit as its driving force. An economic structure that would be similar to the one that forms the basis of Western European and North American societies with the type of class domination that is specific to the bourgeoisie, that is to say a capitalist-like economy based on private ownership recognised and legitimized by society and protected by the law, the state and its repressive forces.
By the turn of the 1980s, the clique that had been leading the USSR since Khrushchev and even since Stalin, had grown old and its members died within months of each other. Struggles to determine who would take over at the head of the single party and state broke out which weakened then neutralised the means available to the central power to impose collective discipline over the ruling caste. This gave them a glimpse of the possibility of trading their unstable situation for a position as rightful property owners in the same way the ruling class exerts its domination in advanced capitalist countries.
The "everything must go" period
Under Gorbachev, who came to power in 1985 in the circumstances described above, millions of bureaucrats were able to see their aspirations partly fulfilled and their wish for more eventually overpowered the existence of a unified Soviet state. This was accompanied by a desire to do away with state ownership at the top and throughout all levels of the state apparatus. It was time to break up the economy along with anything else of value. Each bureaucrat wanted to get his "own" share, like a swarm of Mafiosi and all kinds of ambitious social climbers in a mad rush. As for the planned economy, while bureaucratised and therefore already much less efficient than it should have been, it was still an obstacle in the bureaucrats’ way. It would, however, die in the turmoil.
In August 1990, certain leading bureaucrats, claiming that they wanted to save the USSR from the crisis into which their system had plunged, proposed a plan to "return to the free market". They promised that once state ownership had been liquidated, the bulk of the economy privatized and the economy connected to the world market, the country could land on the shores of the capitalist El Dorado. All this was to be done in "500 days" the name that Gorbachev and Yeltsin had demagogically given to their plan.
It took a similar amount of time not for the USSR to be turned into a paradise for bureaucrats dreaming of becoming capitalists but for it to disintegrate and die out. The USSR was handed over to packs of predators while its inhabitants, its economy and the whole of society plunged into dreadful chaos.
America, not the country conjured up in the bureaucrats’ imagination but the one with the most powerful bourgeoisie in the world, tried to avoid a total collapse of the Soviet state not out of generosity, but because of the looming threat that a good part of the world would become unstable. On August 1, 1991, the former head of the CIA, George HW Bush, who later became president, went to Kiev to warn the deputies of the Rada, and through them the Soviet leaders, against "suicidal nationalism" and to advise them to remain in the Soviet Union that Gorbachev promised to transform. There is nothing paradoxical about this even if, today, Biden comes across as the lead advocate for the separation between Kiev and Moscow. In fact, during the whole period leading up to the final collapse of the USSR, from Stalin all the way to to Gorbachev, the American leaders had plenty of time to verify not only that the USSR was no threat to imperialist rule, but that it was very much a pillar, helping to uphold the world order.
But even with Bush’s approval and even more so with the approval of more than 60% of those who had participated in Gorbachev’s referendum on the question, the idea of maintaining a unified Soviet state did not count for much compared to the weight of the large numbers of bureaucrats, profiteers and aspiring bourgeois eager to break away from the Soviet structure and become real bourgeois.
Promises and reality
Everything seemed to be going well: more and more of their leaders praised this idea. Western countries applauded as their ideologues celebrated the end of "communism" and announced the victory of capitalism once and for all and, no joke, the "end of history" itself! With the fall of the Berlin Wall in 1989, American academics and bankers posing as experts in the transition to the free market had already rushed to Moscow, Saint Petersburg and Kiev to advise the authorities in the same way they did in Eastern Europe. "Shock therapies" were now implemented across the USSR: whole sectors of the economy were privatised, as was housing, healthcare and education; prices were unregulated, social aid was torn apart, thousands of companies went bankrupt, workers were laid off en massec, wages went unpaid, pensions decreased drastically, inflation soared up to 2000%! All this plunged society into chaos and millions of people into deep poverty.
Soon after the collapse, imperialist leaders promised Gorbachev, and then Yeltsin, that they would establish "a new world order" (Bush) and a "partnership for peace" (Clinton). So that Gorbachev would not oppose the reunification of Germany, President Bush, German Chancellor Kohl and British Prime Minister Thatcher told him that neither would NATO "take advantage of the situation". The following year, Gorbachev allowed the Soviet Baltic Republican States their independence. And to reassure Gorbachev, the American Secretary of State at the time, James Baker, promised him that NATO would not "budge an inch" towards the east.
It was not until 1999 that Poland, the Czech Republic and Hungary were integrated into NATO, but others were to follow: the Baltic States in 2002; Slovakia, Romania, Slovenia and Bulgaria in 2004; Croatia and Albania in 2009; Montenegro in 2017; Northern Macedonia in 2020...
Various texts and official reports indicate however, that the White House had been planning this as early as 1992, just after the collapse of the USSR. Secretary of Defence Paul Wolfowitz stated in his Defence Planning Guidance, "Our policy must now focus on how to prevent the re-emergence of any potential global rival" emphasising that "Russia will remain the strongest military power in Eurasia". Henry Kissinger and Zbigniew Brzezinski, the security and foreign policy advisors to several American presidents, pushed in the same direction. In his book The Grand Chessboard, published in 1997, Brzezinski insisted on the fact that Ukraine was the "geopolitical pivot" in the "black hole" left after the fall of the USSR and that cutting it off from Russia would weaken the latter permanently. He also maintained that if Ukraine were to be integrated into NATO it would be a "dagger pointed" at Moscow.
In other words, during the decade following the collapse of the USSR, the imperialist countries of the West seemed well-disposed towards a weakened Russia that swore by the free market. And even when Putin, after just coming to power after Yeltsin, said he was considering, yes, that Russia join NATO, the imperialist states nevertheless continued to polish their weapons. They were not opposed to participating in the plundering of what was left of the Soviet economy, to taking over companies or to entering into contracts without their capitalists taking too many risks. But, for them, there was no question of accepting Russia, let alone Ukraine or any other former Soviet Republic, into their alliance of nations. They would have had to be under their complete economic and political domination without any inclination to, or means of, undermining the domination of imperialism over the world.
Is Russia becoming capitalist again?
Shortly before his assassination by one of Stalin’s agents, Trotsky expressed the notion that, if the bourgeoisie had been as dynamic in the late 1930s as it had been in its youth, it would have been able to reintegrate the bureaucrats’ USSR and turn them into capitalists just like themselves. That was what the bourgeoisie did at the end of the 19th century when it integrated newly industrialised countries such as Japan and Germany despite a large part of these societies, their functioning and their institutions still being very marked by feudalism.
A century later, when the USSR disappeared, capitalism had already been senescent for some time. Moreover, the capitalist world was once again in a systemic crisis which has simply worsened since. What we basically said at the time and which has proved to be true, is that the capitalist system cannot offer the Soviet Union and its peoples any other future than a multifaceted social regression.
In his 1936 work, The Revolution Betrayed, Trotsky discussed the nature of the Stalinist USSR and wrote "The fall of the present bureaucratic dictatorship, if it were not replaced by a new socialist power, would thus mean a return to capitalist relations with a catastrophic decline of industry and culture".
Catastrophes across the board were immediate and nobody knew at the time what would happen next. Trotsky had refused to predict how or how fast the return to capitalism would happen, because his objective was to do everything in his power to prevent it. Three quarters of a century later it is still… coming. Even if state-owned property and the planned economy no longer exist – and the same goes for most of what was gained in the October revolution – and even if private ownership of the means of production has been voted into law, capitalism has not yet really been re-established in Russia.
In any case, not as it was in the former People's Democracies of Eastern Europe. Nor in the forms envisaged by the scenarios for the reintroduction of the market concocted by the Russian and Western " doctors " claiming to cure the ex-USSR of its collectivist evil.
The unpleasant surprises of "Russian-style" private property
Thirty years on, it is quite easy to have a clear picture. At the time, some people, even on the far left, confused words with deeds and thought that intentions expressed were equal to things done. They were quick to conclude that the former USSR was back in capitalism’s fold. This is true to some extent. But it really does not mean that bureaucracy had changed, or that it was about to change into a bourgeoisie in the capitalist sense of the word.
The bureaucracy itself took some time to realise this. For millions of ex-Soviet bureaucrats, losing their illusions was a profoundly painful process.
The plundering of the Soviet economy in 1991-1992-1993 was a get-rich-quick (very quick!) period which applied to the individuals who became the "New Russians" or oligarchs for those who got the richest. This was thanks to their personal situation, their relationship with members of the leading authority, their links to mafia clans and a great deal of good luck. The term "oligarch" derives from the ancient Greek word meaning "government by a small minority" and this is a very apt way to describe how some unscrupulous businessmen managed to stay afloat, dodge their rivals’ bullets and prosper to the point of grabbing entire sectors of industry oil, media, banking, etc. To the point that, in record time, they accumulated so much money and influence that they could boast about how much power they had or even that they were the ones in power. Berezovsky, for example, boasted of having orchestrated Yeltsin’s presidential re-election; Yeltsin then being in no position to refuse his accomplices anything. In the same way, Berezovsky and six others like him, including Gusinsky, Potanin and Khodorkovsky, were able to snatch the better part of the industrial companies privatised by Yeltsin, by now in charge of an impoverished Russia. They acquired shares of all the major companies that had until then remained state owned. The "loans for shares" scheme meant that they then "lent" back to the Kremlin the money they had stolen from a Russian state that was too weak to stop them.
At the time, the oligarchs were sometimes compared to America's robber barons of the 1870s when the US was being industrialised due, no doubt to their methods and their greed. But the comparison ends there. Unlike in Russia 120 years later, in America there were not millions of candidates trying to get rich quick, at the risk of losing everything in the process – social status, privileges and sometimes even their lives. For decades in the USSR, there had been no bourgeoisie: the revolution and civil war had even dug out the roots. The only privileged social stratum was the bureaucracy. They derived their privileges from their position in the single party apparatus and Soviet institutions, not from ownership of a company or shares in it, or even a share in the capital of the whole of society. Their status, their incomes, they owed to the state, which was the collective holder of the wealth, the surplus labour stolen from the workers, and its distributor among the bureaucrats.
Admittedly, there was nothing in common in terms of privileges, between a director, for example, of the giant Uralmash machine-building plant in Sverdlovsk (now Yekaterinburg), capital of the Soviet military-industrial complex, and a lesser manager, responsible for allocating holiday vouchers to the workmen of this factory. But both, in their own way, were part of the bureaucracy, and had a position that allowed them to " render services ", even if these were at very different levels of importance, but always in exchange for various benefits. In 1990, there were 30,000 workers at Uralmash and the plant provided a livelihood for hundreds of bureaucrats, big and small within the plant (management, official trade unions, social work, housing, polyclinic, party authorities, etc.) and many more in the town and the region. As early as 1990, the sons of some of the directors privatised the IT services within Uralmash on their own behalf and then mafia-like groups linked to the regional authorities fought over ownership of the plant its machines, stocks, warehouses and numerous buildings, industrial or otherwise and what it produced. However, only a few dozen individuals finally benefited from this, because they could show title deeds – and rely on protection in high places. On the other hand, there were, at the very least, thousands of other bureaucrats at all levels who had held a position and received guaranteed benefits in the previous system, but who lost everything when state ownership of this immense plant came to an end.
And we can imagine the anger of many army officers members of one of the major bodies of the bureaucracy, previously the darlings of the regime with enviable status, who had access to well stocked special stores who, at the beginning of the 1990s, were forced to live in run down huts on pay that was eaten away by inflation. Or the thoughts of the marine officers who were crowded together with their families on board "requisitioned" warships in the port of Vladivostok because they had nowhere else to live. Meanwhile, "their" minister, the very corrupt Pavel Grachev, a crony of the equally corrupt president Yeltsin, was developing business with the oligarchs, embezzling money from salaries and military equipment, among other things, so that he could buy himself luxury cars, hence his nickname, Pacha Mercedes (Pacha being the shortened version of Pavel).
There were multiple examples of such outcomes, so much so that many big and small bureaucrats ended up convincing themselves that if this was capitalism, they had nothing to gain from it, and everything to lose.
Bringing the oligarchs to heel and taking control
At the end of the 1990s, this awareness, which millions of bureaucratic outcasts had ended up acquiring, was above all expressed by the person at the head of the FSB under Yeltsin, and who was to succeed him in the presidency: Putin. Ex-KGB men like him were in a good position to know that the oligarchs, products of the market, were literally emptying Russia of its wealth in order to accumulate their own private fortunes. This had to stop or Russia would be on its knees along with millions of privileged people. In order to avoid this, it was necessary for Putin, the FSB men and the "St Petersburg clan" who themselves had not exactly held back in the plundering of the 1990s to tame the oligarchs.
Putin suggested that they should keep out of politics, pay their taxes and give "their" major companies back to the state. This would allow the Russian state to create or consolidate immense trust companies in energy, armaments, aerospace, foreign trade, often with a single company for the entire nation. Such companies, the best example of which is the worldwide energy corporation Gazprom, implemented their own interpretation of the Soviet tradition of concentrating the economic resources in the hands of the state and within one structure. They were and still are, without doubt, a powerful tool for the authorities. It allows them to react quickly to the developments and repercussions of the worldwide crisis and more efficiently than, say, the United States where the energy sector is spread among half a dozen big conglomerates, each with their own shareholders and therefore their own strategy according to their own interests.
Some oligarchs resented the state taking over the economy again from 2000 onwards. Those who did not comply were thrown into prison, lost some of the companies they controlled and then had the right to move abroad to benefit from what they had left. Having had a taste of the FSB’s "arguments", some of them got the message. Others lost their lives. Still others, having been named governor of a poor region, for instance, were ordered to pay for major infrastructure spending out of their own money, i.e., what they had stolen. Roman Abramovich found himself in that situation and preferred to become a British resident and owner of Chelsea football club, rather than become the forced benefactor of a region. His friend Alisher Usmanov, a close associate of Putin, set his sights on Arsenal.
The most well known fallen oligarch is Khodorkovsky. Possessor of the largest fortune in the country, CEO of the oil company Yukos, he was arrested in 2003 for large-scale fraud and tax evasion. But the real reason was that he was planning to sell Yukos to American giants Chevron and Exxon Mobil without the Kremlin’s green light. His company and other assets were confiscated and he spent ten years in prison. He now lives in London, near the City which, with its tax haven specialists, attracts a number of tycoons who may or may not be in the regime’s good books, but who prefer to do business in grand capital’s West rather than in their native East.
Putin’s oligarchs
When Putin took up the reins on behalf of the bureaucracy to establish what he termed "vertical power", he forced the oligarchs to do as they were told or emigrate. But not all of them disappeared. Many are still there today and their number has grown (to several hundred) and they are even richer than they were under Yeltsin. There are the oligarchs of the para-public sector such as Alexei Miller, a member of Putin’s close circle, boss of Gazprom and a media empire, and Igor Setchin, who runs the oil conglomerate Rosneft. There are those in private groups, some of whom are survivors from the first period: Aven (5.3 billion dollars in oil, banking and telecommunications), Potanin (27 billion in mining and metallurgy), Fridman (15.5 billion in energy and banking), Oleg Deripaska, the aluminium king (3.8 billion)…
Beyond differences in scale, wealth, sector of activity, capital links with foreign companies links which have been reinforced and show that Western sanctions can be quite selective the position and status of these typically Russian "big bosses" has evolved. With a few exceptions, the period when arguments were settled by Kalashnikov is now over. And while court of justice rulings remain pretty dependent on the orders of the political authority and on the appetite of this or that high level bureaucratic clan (clans which are not necessarily directly linked to the world of business), it is true that rights of ownership are now more stable within the oligarchy. But in the world of small and medium sized firms, racketeering by bureaucratic bodies (tax authorities, the police, civil security, local and regional authorities, etc.) remains frequent. And this encourages the petty bourgeoisie’s support for a politician like Navalny, who accuses the bureaucracy and its regime of stifling any possibility of developing what he calls honest capitalism.
Putin has been in power for twenty years and it was looking as if the Berezovky-Khodorkovsky lesson had paid off. Even if Putin bullied the oligarchs publicly in his role of the good tzar rushing to help the people against the dreadful "boyars" [noblemen] they were careful to appear loyal to him: a comprehensive insurance policy for the health of their business.
A wedge coming between the Kremlin and ‘its’ oligarchs?
At the outbreak of the current war, Putin wanted everyone to toe the line. But discordant voices were heard in the Russian business world. On February 28, the high-profile Deripaska tweeted that it was "necessary to end all this state capitalism" and "if this is a real crisis, we need real managers". And, when the West extended sanctions to hundreds of oligarchs and to those close to the Kremlin it froze overseas accounts, sequestered assets, banned travel to the West some tycoons reacted. One made it known that he did not consider himself an oligarch, another claimed never to have set foot in the Kremlin. However discreet their intentions, these were gestures of defiance towards the master of the Kremlin. Especially as he had been keen to meet with the top brass of the business world to reassure them about the sanctions one of their objectives was to push the tycoons to disassociate themselves from the Kremlin which have increased steadily since 2014, curbing their jet-setting lifestyle and hindering their business operations.
By slowing down the world economy, the pandemic has certainly had an effect on the Russian economy, which relies on exporting raw materials. But that is not enough to explain why in 2021, when the fortunes of the billionaires in developed countries skyrocketed, despite or due to the crisis, their Russian counterparts saw their fortunes reduced by $57 billion, according to a Forbes estimate.
On March 18, Putin attended the celebrations in Moscow’s Luzhniki stadium for the eighth anniversary of the annexation of Crimea. Speaking of the situation in Ukraine, he quoted a military leader from the past who asserted that <i>"those storms will contribute to Russia’s glory". But this may not be to the liking of those who most resemble, at least personally, the grand bourgeoisie.
Some have demonstrated this by making a hasty departure from Russia these last few weeks. This provoked Putin, who gave vent to his fury in a speech aimed at those people who believe they are of "a higher caste" because they "have villas in Miami or the French Riviera" where they live the good life and are ready to "sell their own mother" as long as they may continue to consume "oysters and foie gras"the height of luxury for Russians.
Putin berated these "traitors" as opposed to those whom he called "true patriots" who support him and are, according to him, the majority. He called for the country to be "purged" of the "fifth column". His principal objective is, of course, to unite the population behind him particularly now that they are starting to suffer from the effects of the war, without the Kremlin being able to boast of any real success in the field.
But this speech can also be interpreted as a warning to those oligarchs who might be tempted to distance themselves from the regime.
In their day, Berezovsky and Gusinsky and later Khodorkovsky, had already challenged how the bureaucracy and its peers ruled over the business world. Property relations are now stronger and they no longer depend solely on being in favour with authority. Even so, or perhaps precisely because of this, we may see a more marked and increasing dissociation between the bureaucracy and the oligarchy that has grown under its wing. The oligarchy is in fact a by product in many monstrous ways of a monstrous product of history: the Stalinist regime and its aftermath, with a working class that was permanently separated from the running of the state that it had set up. Moreover, the bourgeoisie worldwide was incapable of integrating the regime despite it being profoundly reactionary, counter revolutionary and anti worker. The bureaucracy was a runt of history, a parasitic caste with no past and no future, or rather one that had nothing more to offer Soviet society than a return to capitalism.
It is hardly surprising that the Ukrainian conflict should highlight the impasse into which post-Soviet society has been led by the Soviet and then the Russian bureaucracy. It is a grotesque manifestation of that impasse.
While Putin obviously wants the regime to survive, he cannot of course allow oligarchs to appeal for a break from "state capitalism". What the oligarchs mean by this, is a form of government and an organisation of society in which the bureaucrats, as managers of the state, can impose a number of constraints.
How and when will Putin react? It will probably take a lot more than the possible rebellion of a few oligarchs to destabilise the regime, even if it is badly affected by the world crisis. Putin’s position has been weakened by his launching of the "special operation" and, if the war drags on and has ever more disastrous consequences for the regime, it is entirely possible that the bureaucracy may use his weakened position to make him pay. After all, they have not signed a never-ending work contract with him. And should he forget that fact, the example of Khrushchev, overthrown in 1964 for having misled the Kremlin in the Cuban missile crisis, will always be there to remind him
But his current fear, apart from the Ukrainian population who are resisting him despite a deluge of bombs, appears to be that his own population might challenge him, his war and his affluent cronies. This is obvious from the intensified repression against all those who have defied him since the beginning of the war, particularly in the streets.
Each and every bureaucrat, all the imperialist forces, oligarchs and every type of nationalist have driven the ex USSR into a minefield, a bloody impasse. And any hope of extricating it lies in it reconnecting with the revolutionary, internationalist, socialist and communist policies of the Bolsheviks. It depends on proletarians whether Russian, Ukrainian or any other being conscious that they are not only brothers by origin, by language, or because of a shared past, but also that they are class brothers, with the same fundamental interests and the same enemies: those who oppress them and those who claim to be leaders "in the name of the fatherland", but who are leaders in the name of the exploiters, the oligarchs, the bureaucrats and the capitalists whether home grown, or from the countries of the great imperialist powers.
March 22, 2022