[Analytics] Vladimir Putin and the “Putin’s State”

Vladimir Putin during his speach to the nation on the Victory Day, May 9, 2020. Image: Rossiya 24 TV Channel. Sketched by the Pan Pacific Agency.

In cooperation with the FEFU Center of Expertise and Analysis (CES)

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There is a number of countries around the world whose military, geographical, and economic standing draws attention to the person in the position of the national leader regardless of his/her personal and professional qualities. The Russian Federation and its incumbent president Vladimir Putin are the obvious example of such a perspective. Dmitry Shelest specially for the Pan Pacific Agency.

He is framed either with the demonic or the sacred features, which depends on the points of view of particular para-political daydreamers. However, one should not forget that even a monarch with absolute powers cannot to change the nation and its subjects by waving a magic wand of governance. Historical inertia of the nation, existing state of affairs in its domestic and foreign policies, its economic foundations, and cultural traditions are the preconditions of governance that any leader would be forced to accept.

Thus, I propose to speak not so much about the figure of the incumbent Russian President but rather about the genesis of the Russian Federation where Vladimir Putin by a twist of a fate has become a highest-ranking public figure in a certain moment of the Russian history. In this vein it is worth mentioning an opinion of Leo Tolstoy on the insignificance of the role of an individual in history, and Karl Marx’ views on the significance of deep-rooted socio-economic phenomena that occur outside of the scope of influence of any given person. Both Russian and German geniuses saw a process that either this or that historical figure have taken and became a winner or refused to accept the obvious reality and therefore missed the chances to achieve something significant. Hence, it is a better idea to start with the processes.

The Counter-Revolution of 1991-1999

The preposition that modern Russia has begun to take its current shape since the collapse of the Soviet Union is quite understandable. However, the opposite is also true: the Russian Federation is a result of a counter-revolutionary coup where the Soviet state was replaced by the restoration of the quasi-capitalist regime. The Soviet state has been turning into its own opposite starting with the signing of the Belovezha Accords, which buried the USSR in 1991, and finishing with the dissolution, besieging, and execution of the Russian Parliament in 1993.

If we should discuss the collapse of the Soviet Union, it сcould be unreasonable to try to zealously find external operators of this process. The world’s first state of workers and peasants was thoroughly undermined by an erosion of mistrust on the part of Soviet citizens and the absence of the vision of the future and the ways to attain this future by the Soviet bureaucracy. The privileged bureaucratic class did not attempt to repair and to renovate the state. It was slightly shaken and pushed, and the Soviet people all of a sudden have found themselves in a completely different world. However, the bureaucratic core of the state whose members were the main beneficiaries of the previous system generally speaking was pushed away from the new opportunities by more impetuous, brutal, unprincipled, and more far-sighted rivals. Those were the oligarchs who reigned Russia both on small and large scales. The new political system was titled as the reign of “Seven bankers.” Russian people appealed to the historical analogy of the 17th century referring to corruption regime of “Seven boyars” or Seven Noblemen who ruled the country in a very un-noble manner. The Seven-bankers system was entrenched as a stable structure both at the federal level and at the regional level in a more miniaturized form. This could be called capitalist society only with significant reservations. Such kind of a polity was more similar to the early capitalism of the city-states o the Middle Ages rather than the polities of Western Europe at the end of the 20th century.

A definite advantage of this period was that while the emerging capitalist tycoons hastily grabbed the former Soviet assets, small and medium-sized businesses unrelated to privatization began to take shape at a lower level. At the initial stage, the formalization of the oligarchic state was somewhat delayed, which for some time allowed the country to exist under a relatively liberal regime while democratic procedures were introduced and carried out before the monopolization of power by the large capital. At the same time, the collapse of the USSR, which Vladimir Putin described as “the greatest geopolitical catastrophe” of the 20th century, has directly or indirectly led to the premature deaths, according to various estimates, of one and a half to two million people. The country has reached unemployment levels unknown in the Soviet Union; non-payment of wages, increased crime, destroyed culture, science, and education became a new reality of the nation. All of this has also slowed down the final division of the country by financial and industrial groups by several years.

By the end of the 1990s, the weakness of the first Russian President Boris Yeltsin against the backdrop of the growing power of the emerging oligarchs, led to a logical result. Psychopathic pride and greed are not the best advisers for creating alliances and for forging compromises, and even more so for shaping the state agenda. All these people, or rather oligarchic groups, needed an arbiter who would at least somehow balance their exorbitant appetites. In addition, it turned out that the people who live in Russia are also able to have their own opinions that they could express not always in the most pleasant ways for the new elites. The counter-terrorism operation in the Chechnya (also known as the Chechen War) that was taking place against this background, the lack of weight and respect for the national leadership on the international stage have also exacerbated the situation. Naturally, there was needed for a mediator who would take into account the opinions of self-proclaimed elites and who could prevent the occurrence of the new revolutions. From this perspective, the Yeltsin era ended a little earlier before the first President uttered notorious phrase leaving the Kremlin for good in December 1999: “I’m tired, I’m leaving.”

Bureaucratic Revenge of 2000-2018

For some reason, both Putin’s supporters and his critics often focus on his service in the USSR State Security Committee (KGB) as some kind of a reason of belonging to some secret order. Of course, the endowment of the KGB with omniscience and a mysterious haze could hardly surprise anyone, however what needs to be considered is fact that the “bureau” (a slang name, which KGB is known for) was just a government-run bureaucratic organization. Vladimir Putin was a regular government employee, or a bureaucrat (without a negative or positive context) in addition to being a member of this secret service who was just more informed as compared to his fellow countrymen. His upward career development from the deputy mayor of St. Petersburg to the President of the largest country in the world with intermediate stops at the positions of Deputy Chief of Directorate of the President, Deputy Chief of Staff of the Presidential Administration, Director of the FSB, and finally the Prime Minister of Russia. Putin’s career has become an amazing kind of bureaucratic revenge of both the new officials and the remaining Soviet bureaucratic officialdom.

Essentially, the second longest stage in the development of post-Soviet Russia and the creation of the notorious “Putin’s State” has begun with the assumption of the position Prime Minister by Vladimir Putin in 1999. In its own way bureaucratic revenge was a revolutionary and advantageous tool for the state. First of all, Putin really was able to become an arbiter between the main owners of financial and industrial groups in a short period of time. A peculiar oligarchic consensus ended with the “equidistance” of significant oligarchic figures from the 1990s as Putin has become a Russian President at the turn of the century. Vladimir Putin has adopted a package of completely liberal economic laws during the first term of his presidency (2000-2004). Steps were taken to maintain the integrity of the Russian Federation including the second counter-terrorism operation in Chechnya and other adjacent North Caucasus provinces of Russia. A single economic space was restored in the country which had brought financial advantages primarily to the large businesses. Putin’s second presidential term (2004-2008) has completed the process of strengthening of the power vertical. This was the time of the first attempts to upgrade the Russian Armed Forces. The ruins of the Soviet Union now acquired the features of another new state. The Russian Federation of the early 21st century no longer looked like an ugly duckling compared to its history in the previous century. Whether outsiders liked it or not, Russia was able to avoid disintegration in a form of Balkanization and to avoid the model of development of colonial India.

The instruments of a complex consensus were becoming more apparent and they included manual control of governance, removal of oligarchs from policy-making, strengthening of the bureaucratic leadership, increasing dependence of the provincial governments of the federal government, avoidance of the political activities of the masses along with the absence of direct opposition to the legislative and executive branches of government. All of the above mentioned was neither “evil” nor “good” will of the President – this was the political expediency of the historical moment. Moreover, a narrow circle of a couple of hundred of the richest people in the country with a direct or indirect impact on the politics which would manifest itself in supporting of the public leaders or in having an agreement with the bureaucracy, was also interested in this state of affairs.

Obviously, the holders of huge fortunes were not completely and irrevocably removed from the corridors of power. It is also obvious that the imbalance of the state as a system has negatively affected the operational management of the privatized Soviet legacy. Accordingly, the oligarchic elite was the beneficiary of the emergence of a new Russia to a greater extent as compared to the ordinary citizens of the country. The sovereignty of a foreign policy and the restoration of the Russian Army and Navy made it possible to actively expand to the foreign markets without losing national assets inside of the country under the pressure from the outside. Structuring of the state made it possible to optimize the costs associated with the political risks. A stable economic situation of the aughts in comparison with the turbulent 1990s allowed to develop not only extraction of natural resources, but also processing and manufacturing industries. Not on the scale, which it was much desired at, but still. This type of a period of bureaucratic revenge is best characterized by the words of the German Marxist Herbert Marcuse: “It is a good way of life—much better than before—and as a good way of life, it militates against qualitative change.”

However, there is no even a single society that can remain in prosperous static form for infinitely long periods of time. The social environment is not sporadic phenomena as it consists of the processes that tend to have both positive and negative impacts on the governance system. The contradictory state of relations between the dominant bureaucracy and those 10 percent of the Russians who own 83% of the wealth of the Russian Federation naturally began to enter the zone of turbulence.

By the end of the presidency of Dmitry Medvedev and the premiership of Vladimir Putin government officials, whose incomes and power were quite comparable to the financial and political capabilities of the oligarchs, have joined the circle of big capitalists of the 1990s. The heads of federal agencies and state corporations have actually fulfilled the dream of the Soviet bureaucrats: having received broad powers to manage national property, they successfully monetized their managerial functions. In the end of the day, five, three, or even one million rubles of a monthly salary are the incomes, which are quite comparable to the cash flows of those who made their fortunes by acquiring former Soviet assets. The oligarchs of the first wave who have transformed into the socially responsible members of the business community have relatively easily found peace with the new government officials-oligarchs. Political philosopher Slavoj Zizek has described such a state of affairs with one straight-from-the-shoulder phrase: “A terrible combination of capitalism with a very strong state that regulates it.” In fact, this was a culmination of bureaucratic revenge and, at the same time, its completion in a progressive form.

First, there was a certain division of big business as its “captains” and government officials have become incorporated into certain groups, served by their creative and intellectual cohorts. On the one hand, there has been a group formed that focused on the Western financial institutions, in other words on the speculative capital. On the other hand, there has been a group of industrial capitalists formed with opposing development strategies and objectives. Naturally, the contradictions between these groups have already intensified during the 2008 economic crisis. By convention, this can be called the Glazyev demarcation line. An accomplished economist Sergey Glazyev has repeatedly warned about the vicious practice of international financial speculators in Russia.

Second, a number of expected “unforeseen” events has occurred. That included the slowdown in the global economic growth and the transfer of centers of economic activity to East Asia at the global level. The immediate crisis for Russia was the Ukrainian crisis of 2014, which has made a great impact on Moscow’s domestic and foreign policy. The model of the Russian economy that was gradually established before the Ukrainian crisis has exhausted its capabilities. Between 2013 and 2017, real disposable incomes of the population have gradually declined by an average of 1.2 percent per annum. Accordingly, a couple of years after the 2012 elections, Vladimir Putin has faced a slightly different set of problems while the positive charge of bureaucratic revenge has gradually minimized.

The Oligarchic Reaction of 2018-2020

Previously existing political consensus has begun to tumble down. On the one hand, comprehension of the Russian citizens of the direction of the social movement after the 2018 presidential election was somewhat lost. On the other hand, the interconnected bureaucracy and the oligarchy were clearly pleased with the structure of the existing governance. In turn, steps to preserve the regime became more apparent. First of all, this relates to the distribution of wealth among the richest Russians, bureaucracies, and attendants affiliated with them. Global markets and the structure of the economy could not add anything to their financial flows. Neither bureaucracy nor the oligarchic elite had a desire to radically change the economy, but the desire to profit from the stagnant system did not go anywhere.

The result of such a perception of reality is quite obvious as it manifested itself in the increasing retirement age, escalating bureaucratic pressure, and rising taxation burden. The freshly minted phrase “People are the new oil” shows that the painless coexistence of the people and the non-people (let us not once again abuse the term elite) can end in the near future. Moreover, everything described above did not become an evil will of some kind of conspiracy empowered group. We are talking about the logical transformation of the economic base in the current political regime. Perhaps this is the main result of the oligarchic reaction that happened since Vladimir Putin was elected for a second six-year term (2018-2024).

To date, the power of the incumbent Russian President continues to rely on the support of the people, with some reservations, but still Vladimir Putin is seen as the country’s leader by most of its citizens. The current head of the state is supported by a significant part of the Russian elite out of the instinct of self-preservation and out fear of the unknown, but still supported. This support is rather inertial as Vladimir Putin does not have an unconditional “mandate of Heaven”, but still remains the center of influence in Russia. At the insider level, everybody who is “close to the emperor” does realize that power grabbing in the conditions of total instability can lead if not to disappearance from the political map, but to a Pyrrhic victory. Even those who see themselves in the first roles in the governance are forced to exercise discretion.

The Underworld…

As was already mentioned, there are various perspectives on the role of the individual in history. When asked why the socialist revolution won in Russia and was unable to do so in Austria, Hungary, Germany or Poland, Leon Trotsky answered simply: “Because there was Vladimir Lenin in Russia, but not in these countries.” Of course, the founder of the USSR and the president of post-Soviet Russia are two completely different figures in different historical eras. But with all of the advantages and disadvantages, the Russian Federation has lived as the “Putin’s state.”

Now the aforementioned form of governance has come to its logical end and blaming one person for this can be considered ridiculous. The post-Soviet regime that emerged in the 1990s has developed along a classical trajectory: from the wild market to cash-for-shares privation, from basic market relations in the spirit of Adam Smith to complex industrial and financial conglomerates. And, finally, from the large companies to oligopolies from the spheres of ownership of various oligarchic groups. Over the long term, Vladimir Putin has proved himself to be a person who was ready to work with different people and governance models, as a person ready to find compromises and to show rigidity, and to think strategically. Not in all cases, not at all times, but who could do that otherwise? The incumbent president has been and still is a key figure in the game with many unknown factors. The key figure, but not the only figure, the main figure, but a figure far from dominating everything. The outbreak of the COVID-19 pandemic has simply emphasized this fact and has demonstrated dependence of both society and separate individuals on the global tectonic shifts and, to some extent, it has accelerated the movement into the future.

The period, which I arbitrarily called the oligarchic reaction, will not last more than two or three years. In fact, it marks the end of Putin’s governance model. The next contenders will soon begin to line up to the “throne,” however, the making certain opportunities a reality will require the formation of a new consensus. Perhaps Vladimir Putin, already in a different status, will be a participant in it. But while discussing the “Putin regime” it is worth considering what Russia would be like without Vladimir Putin and, more importantly, what it would be like without the “Putin’s state”. In this regard, it is appropriate to ask what awaits us in the future in the three to five years to come: a religious and a conservative renaissance, an oligarchic fascism, a radical federalization, a new socialist project or other scenarios?

In any case, the poetization and exaltation of leaders, as well as making them responsible for all the troubles, their stigmatization are the signs of immaturity of a person, a social group, or even a nation. And the purpose of the article is not to criticize or to praise the leader of the state. Whatever we say about Vladimir Putin, he has already become a historical figure. But have we, as a nation of post-communist Russia, become one as well? Perhaps now is the time to think about our role as the ordinary citizens of Russia, about our vision of the strategy, and about the actions that we need to take. Not the destructive but constructive actions. In the fields of business and state security, in the fields of culture and mobilization readiness, in the fields of human rights and obligations of the citizens, in the fields of social interaction and social responsibilities, in understanding of the other nation’s experiences and our own historical role. We have given too much to the state, and then, like offended children, we criticize it for not using its powers in the way it is needed, not in the way we consider it to be necessary.

In order to avoid the destruction of our future, we need to stop obsessive polemic discussions about the “Putin’s state.” It has already consolidated and is coming to an end regardless of the duration of Putin’s presidency. In the context of a change in economic cycles and political turbulence, it is worth thinking about finding a new expediency for a future country. Moreover, it is necessary to do it without waiting for the next “good” king or hoping for a “new Putin’s state.” This is the main objective for the Russian nation.

Written by Dmitry Shelest. English language editing by Ivan Pisarev.

Russian version of this article is available here.

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