“Kleptocracy” is probably the most common word now used to describe the Russian State. The proponents of this theory argue that President Putin and his cronies are using money from state coffers for their own personal use. This, they say, is the primary goal of the “kleptocrats”: personal enrichment at the expense of the Russian taxpayer.
I’ve spent nearly the past two years looking at the way the Russian Regime is moving money, and I think that this narrative is false.
What is Russia then if not a kleptocracy? The State is not based on thievery for personal gain, though there is some element of that. Russia today is more of a neo-feudal system.
The people commonly referred to as “oligarchs” are not oligarchs in the traditional sense. Traditionally an oligarch has some power over the leadership of a country through his money. But in Russia today the so-called oligarchs are actually beholden to the State. In this sense, they are more like the boyars of old, during the Tsarist period.
At the end of the Communist period, the State gave the boyars their wealth through the dispensing of property (in this case, previously state-owned businesses, factories, etc.). It was up to the boyars to make the most of this gift. The boyars were then obligated to pay tribute to the State from their wealth.
This can take many forms, but one example is what happened at the Sochi Olympics. The boyars were required to pay for the venues, even though they (and everybody else) knew they were loss-making and would most likely never turn a profit. Did they get kickbacks for it? Of course. But the monetary cost was likely higher than any profit made. At the same time, however, the boyars showed their fealty to the State.
But if the State decides that the gift must be returned, the boyar must do as he is ordered. We have seen different cases of this. What typically happens is that the “boyar” has become arrogant enough to believe in his own press. That his wealth is of his own making. That he is not beholden to the State for his success. And that the State has no right to demand its return.
And what happens then? The recent case with the owners of Domodedovo Airport is a good example of how this plays out. An offer was made for the airport by a certain group on behalf of the State. The offer was rejected. And now the owners of Domodedovo are under arrest. They could have gotten some money out of the deal, and returned the airport. But they refused. And their imprisonment is the consequence.
I don’t mean to make the “boyars” sound like victims here because, just like everybody else in this story, they know what they signed up for. They made a deal with the devil. And the devil always demands his due.
But depicting the Russian Regime purely as a vehicle for personal profit greatly misreads the situation and leads to poor policy decisions. The portrayal of Putin and his cronies as some petty gangsters who somehow (!?) managed to make it into the Kremlin is a dangerous one on which to base policy. In essence you are reducing the goal of the State to nothing more than theft by a small group. A group that you only have to oust to solve “the problem of Russia”.
But history has shown that this is a false narrative. We thought we were getting a better Russia in the 1990s, but as Chernomyrdin said, “it turned out like always”. And if we keep believing this false narrative we will only have ourselves to blame when it once again turns out the same.