Contradictions of oligarchic rule

When people ask how it is possible for a man like Vladimir Putin to come to power and to hold it for such a long time, it is necessary to consider the objective situation faced by the Russian people before and after 1998. Under Yeltsin Russia experienced the most catastrophic economic collapse in peacetime. In order to find an adequate parallel one would have to look, not at the Wall Street Crash of 1929, but at a devastating defeat in war. Russia was not defeated in war but the proud nation that defeated the armies of Adolf Hitler was subjugated to imperialism in the most humiliating manner imaginable.

Now, on the political and military front, Russia has emerged as a powerful rival to US imperialism. Moscow’s military offensive in Syria has been successful in propping up its Syrian ally Assad and the West could do nothing about it. As a result, Russia is now in effect the arbiter of Syria’s fate. The imposition of sanctions on Russia has not weakened the regime.

Putin has benefited from his foreign successes and, even if we allow for a certain amount of rigging of opinion polls, all the bourgeois commentators have to admit that he remains popular, especially among the workers. Of course, we understand that this will turn into its opposite at a certain stage but for the present, Putin’s policy of kicking the Americans is popular in Russia. He is doing rather well out of confronting American imperialism.

Though it does not really have the economic or military strength to challenge the US in the world arena, Russia seeks to have its own independent foreign policy and wants to negotiate with the US from a position of strength. It goes without saying that this confrontation does not contain an atom of progressive content. It is the task of the workers of Russia to re-establish the genuine ideas of socialist internationalism as the only solution to their problems. Only a return to the genuine principles of Leninism can point the way to a just and lasting solution on the basis of a free union of the peoples within a socialist federation.

Putin has temporarily succeeded in gaining support by playing the nationalist card but this cannot last forever. Russia is ruled by an irresponsible and degenerate clique of oligarchs who own the banks and big monopolies. But oligarchic rule is corrupt by its very nature, while monopolistic capitalism leads to waste and inefficiency, just as much as bureaucratic Stalinism or even more. The contradictions will pile up, eventually leading to a crisis.

As always, the key to the situation lies in the economy and here there are crying contradictions. Although higher oil prices led to an increase in living standards after 1998, inequality has enormously increased since Vladimir Putin took power. Russia is now closely linked to the world economy, and is vulnerable to the gyrations of prices on world markets. The Russian economy benefited from the export of raw materials such as oil and gas. Enough wealth trickled down during the oil boom years to increase the size of the middle class, which is particularly numerous in Petersburg and Moscow. Even so, most of the provinces remain submerged in extreme poverty. And oil prices have fallen sharply in the recent period.

The crash in crude oil prices had a serious effect on Russia, aggravated by the imposition of sanctions. It is true that the economy – after a two-year slowdown – is climbing out of recession but the benefits of this recovery are not felt by the masses. Public sector salaries have been frozen since 2015. On the other extreme, a small group of incredibly wealthy oligarchs are enriching themselves while millions of Russians are languishing in poverty.

One of the main criticisms levelled against the old regime was its corrupt character but the corruption of the Stalinist bureaucracy pales into insignificance compared to the corruption of the present regime. Russia is owned and controlled by a group of oligarchs that is organically linked to the state. In the same way that the bureaucracy needed a strong man – Stalin – to defend its interests, so the present Russian oligarchy needs the services of the man in the Kremlin.

Russia is the most unequal major economy in the world, with almost two-thirds of its wealth controlled by millionaires. Sixty-two per cent of Russia’s wealth is held by U.S. dollar-millionaires and twenty-six per cent of its wealth is held by billionaires, according to a New World Wealth report from 2016.

The top ten per cent of the richest Russians control eighty-seven per cent of all household wealth in the country, a share “significantly higher” than in any other major economic power, according to Credit Suisse Group AG in its Global Wealth Report (2015). Meanwhile, the World Bank predicts the poverty rate will increase to 14.2 per cent in 2016 from 13.4 per cent in 2015, returning it to levels last seen in 2007. The number of Russians considered poor already grew by 3.1 million to 19.2 million last year, the most since 2006.

For the time being Putin has succeeded in diverting the attention of the masses by playing the nationalist card, but this tactic is of limited value. Flag-waving nationalism does not put bread on the table. The workers will grow tired of the endless spectacle of chauvinism and will resent having to pay the bill for Putin’s foreign adventures.

Let us remember that in 1914 the tsarist regime succeeded temporarily in avoiding revolution by creating an atmosphere of war fever and chauvinism. Let us also remember that three years later the same workers and peasants who marched into battle singing patriotic songs turned against the regime and carried out a revolution. History has a habit of repeating itself.