Consolidating Russia’s gangster capitalism

Vladimir Putin (Photo: Wikimedia commons)

Vladimir Putin rose to power after the collapse of the Soviet Union, as gangster capitalism seized hold of Russia. Emulating aspects of Stalin’s ‘strongman’ image, he has sought to reassert Russian power on the world stage.

Shaun Walker’s quest in his new book, The Long Hangover, is to chart “Vladimir Putin’s mission to fill the void left by the 1991 collapse” of the former USSR. In doing so, Walker provides informative analysis and lively interviews with a gallery of ‘winners’ and (mainly) ‘losers’ from the fall-out of the collapse of Stalinism and the restoration of capitalism. Although Walker takes a liberal stance, The Long Hangover is well worth a read by socialists.

Putin was a 37-year-old lieutenant colonel in the KGB stationed in East Germany in December 1989 when protesters brought down the Berlin Wall. As angry crowds gathered outside the KGB headquarters in Dresden, Putin was inside busy destroying compromising documents. Although the Soviet Union did not collapse for another two years, it was on this day in Dresden that Putin had his “personal moment of realisation that the game was up for the communist superpower”.

Putin “seemed not to mourn the human cost or material tribulations” of the collapse, Walker surmises, but “the national humiliation of a powerful state simply imploding”. Stalinist bureaucrats like Putin had no attachment to genuine socialism – the democratic running of society and economic planning by the working class – but feared for their positions, privileges and prestige in the wreckage of the USSR and at the dawn of the new capitalist regime.

For workers, it was a question of survival. Walker discusses what life was like in the 1990s with workers from the Donbass, an industrialised area of eastern Ukraine and southwestern Russia. One interviewee describes his “… miserable diet, with goods scarce and little money to buy what was available. Hyperinflation meant that within a couple of weeks the meagre salaries people were paid became even more worthless. As a luxury, he could occasionally afford a cheap brand of Polish sausage made of offal and ground up bones… he and friends would travel around the region’s collective farms, collecting half rotten apples on the ground… and turned them into juice: a source of vitamins”.

While the “majority of the population lived in genuine poverty”, Walker writes, “a tiny minority managed to use foresight, guile, and heavy weaponry to emerge from the period with riches. Across the whole of the former Soviet lands, there was a messy scramble for resources wherever there was something to steal”.

Before the restoration of capitalism in Russia, the Committee for a Workers’ International warned that this process would not herald a new era of living standards akin to advanced capitalist countries, as many western capitalist propagandists suggested. Rather, the reintroduction of the market economy would see the creation of a form of robber-baron capitalism entailing the wholesale looting of state assets and the impoverishment of millions of former citizens of the USSR.

Serving under the notorious drunkard president, Boris Yelstin, in the early 1990s Putin “saw how weak the country had become”. The Red Army was facing defeat in Chechnya and “Russian society was in turmoil, goods scarce, and the majority of the populace impoverished”.

Putin was inaugurated as president on 7 May 2000. He is described as a “political chameleon” in both domestic and foreign policy, who in the “early years floated the possibility that Russia could join the EU… or even become part of NATO one day”. Putin’s overriding goal was to restore what “he believed to be Russia’s rightful place on the global stage”. He intended to forge a strong state and rebuild the armed forces, to project the interests of the oligarchs and capitalist elite.

This was in the context of the aggressive expansion of NATO up to the borders of Russia. Western imperialist powers felt emboldened by their ‘triumph’ over “actually existing socialism”. With great hubris, they believed the US would remain the unchallenged sole superpower for the foreseeable future.

Putin and the ruling elite around him never had the goal of returning to a nationalised, state-run economy. While Putin famously called the collapse of the USSR the “greatest geopolitical tragedy of the twentieth century”, he added that, “while only a person without a heart could fail to miss the Soviet Union, only someone without a head would want to restore it”.

The rise of Stalinism

Walker does not characterise the former Soviet Union beyond descriptions of a dictatorial society with a “command economy”. But only an understanding of the character of the Stalinist system can sufficiently explain events.

The Russian revolution in October 1917 saw the overthrow of capitalism and landlordism and the introduction of workers’ democratic management and control of the planned economy, to meet the needs of the masses, not a privileged elite. However, under extreme conditions of civil war, famine and severe shortages, and the legacy of tsarist economic underdevelopment, a bureaucratic layer developed around the figurehead of Stalin. The failure of the socialist revolution to spread successfully to advanced capitalist countries led to the isolation of the young Soviet Union.

The conservative layer of functionaries and officialdom wanted an end to the storm and stress of revolution and to carry out the utopian and reactionary aim of building ‘socialism in one country’. Of course, in doing so, these bureaucrats put themselves at the front of the queues for material gains, perks and privileges. As the bureaucracy grew and consolidated its power, it strangled all vestiges of genuine workers’ democracy and any hint of a threat to its privileges.

Vladimir Lenin, during his final illness in 1923/early 1924, and Leon Trotsky and the Left Opposition, heroically resisted this development. Trotsky advocated a ‘political revolution’ to restore workers’ democratic rule. But war, revolution and counter-revolution left the working class exhausted and diminished. This was compounded by the historic defeats of the German and Spanish working class in the 1930s and the rise of fascism. The Russian Left Opposition faced the horrors of the bloody Stalinist purges and most perished in the Gulags prison system or were summarily shot after show trials.

Nonetheless, Trotsky left an imperishable analysis of the process of revolution and counter-revolution, particularly in his masterpiece, Revolution Betrayed (1937). A planned economy needs workers’ democracy like the human body requires oxygen to survive and flourish, Trotsky wrote. He predicted that sections of the ruling Stalinist bureaucracy could, as their system stagnated and ran into a dead-end, become agents of capitalist restoration. Indeed, several decades later, sections of the bureaucracy did transform themselves into enthusiastic capitalists after the economy seized up in the 1970s and 1980s and finally collapsed in the 1990s.

Projecting Russian military might

Walker explains some of the political and ideological correlations of these processes: “As the economy stalled under Brezhnev, and the path towards a utopian future of communist plenty seemed less easily navigable, the regime sought validation in the past rather than the future. The heroism of the [second world] war, in which the Soviet people came together to defeat the ultimate enemy, became a foundational pillar of the state”.

The Putin regime has projected a careful narrative – not endorsing all of Stalin’s actions but, at the same time, venerating the ‘strong’ war-time leadership. The truth was that, while “millions of Soviet citizens did fight, and heroically and to the death”, Stalin ignored “hundreds of warnings of the impending attack” from Nazi Germany.

Having entered a pact with Hitler in a desperate and doomed bid to avoid or forestall a showdown, Stalin did an abrupt about-turn after the catastrophic invasion. He then entered a new war-time alliance with the previously condemned ‘imperialists’. The barbarous Nazi invasion was finally defeated not by Stalin’s ‘military genius’ but because of the heroic resistance of the masses, which was greatly enabled by the huge benefits of a planned economy in war-time conditions.

Under Putin’s rule, Victory Day celebrations became “the biggest since the Soviet collapse”. While the victory over fascist forces “evoked real emotions” from the general population, the event “gradually but inexorably became less about remembering the war dead and honouring the survivors, and more about projecting the military might of contemporary Russia”.

Open discussion about the war was closed down. “According to Putin’s logic”, Walker writes, “the war victory underpinned the strength of modern Russia, and it thus stood to reason that anyone trying to undermine or complicate the narrative was also attempting to undermine Russia itself”. That is, it is gangster-capitalist Russia and the rule of the oligarchs that Putin fears being undermined.


Modern Russian school textbooks contain “just a single line about the deportation of two million of the country’s own citizens during the war”. While Walker points out that “Russians did have legitimate questions about the veneration of Nazi-allied wartime formations in the Baltic States or Ukraine”, many mass deportations and resulting deaths were also due to the Stalinist regime’s fear of contagion spreading from any rebellious national minority, leading to a general revolt against its rule. In 1931, as the Stalinist bureaucracy moved to ruthlessly consolidate its power, “more than 30,000 Chechens were arrested and most of them shot, in a crackdown on religious leaders, nationalists and kulaks”. Nonetheless, “thousands of Chechens fought and died at the front” during the second world war.

This was not enough to save them from Stalin’s wrath: “In Operation Lentil, launched on 23 February 1944, 450,000 Chechens and Ingush were rounded up just as the Kalmyks had been, by NKVD [secret police] men in Studebaker trucks. Most of the Chechens were sent to the punishing, barren lands of the Kazakh steppe”. Their crime was alleged collaboration with the Nazis, although the vast majority of Chechen territory was never occupied by the Nazis. Walker surmises that the “punishment was more likely due to broader suspicions about whether the Chechens ever fully acquiesced to the Soviet [Stalinist] system”.

Chechens were only allowed back home in 1956 under Nikita Khrushchev. Though many became ‘Sovietised’ in the subsequent decades, a “spirit of national resistance” remained. Under Dzhokar Dudayev, Chechen independence was declared in November 1991, as the Soviet Union was falling apart. But this was a “red line for Yeltsin”. While the Baltic States, Ukraine and Central Asian republics seceded, they had theoretically all been ‘republics’ within the USSR. Chechnya was a ‘region’ of the Russian ‘socialist republic’. To allow Chechnya to breakaway would have encouraged other Russian regions to possibly do the same, greatly undermining the power and territory of the new capitalist regime.

In 1994, Yeltsin ordered a military operation to take back control of Chechnya, indiscriminately bombing civilians in Grozny city. After two years, Moscow was humiliatingly unable to defeat a “motivated, nimble opponent on its own mountainous terrain”. Putin, as prime minister and then acting president, consolidated his rise to power by launching a new bloody campaign that would eventually bring Chechnya back under Moscow’s control, at the cost of many civilian, rebel and Russian troop lives, and massive destruction.

Moscow knew it could not rule without some local support and found this in the former rebel Kadyrov clan, which switched sides and collaborated with Putin. Vast sums of money were given to the new local strongman, Ramzam Kadyrov, to rebuild the country, and to feather his nest and that of the loyal clique around him. He was allowed a relatively free hand to rule the region in exchange for an “almost medieval pledge of feudal loyalty” to Putin. While Chechens could speak their own language and had some other national rights, Moscow expected the oppressed nation to put its historical grievances to one side. The benighted people of Chechnya discovered in the most bitter manner that, just as their ancestors were denied genuine liberation under tsarist and Stalinist rule, so too under capitalism today.

Gains of the planned economy

Walker includes a spectrum of views, from the new rich who did well from cut-throat capitalist restoration to apologists for the criminal Stalinist regime. He finds many people who hark after at least some aspects of life in the old USSR. “The middle class of Moscow and other big cities enjoyed the prosperity of the Putin oil boom and strived for modern Russia to become less like the Soviet Union, not more. But for those who had tough lives – and they were the majority – it was a different story… people did remember the 1970s and early 1980s, and felt those were better times than the present”.

The author is somewhat dismissive of those who “romanticise that earlier time”. Yet their sense of loss is based on real experiences of economic and social achievements for working-class people, particularly in comparison to the catastrophic decline in living standards since capitalist restoration. Despite Stalinist totalitarian rule, the planned economy achieved wonders. It significantly raised living standards, rid the country of mass illiteracy, and built new towns and cities. Rapid industrialisation created a huge urban working class, guaranteeing a job for all, cheap housing costs and a free health and education service. Within a matter of a few decades, a formerly economic backwater was leading the US in space exploration and had become the world’s second superpower.

One of Walker’s interviewees, Sergei Aksyonov, who did “extremely well out of the period” of capitalist restoration and became the Kremlin’s governor of Crimea once the region was subsumed into the Russian Federation, surprisingly “mourned” the USSR’s passing: “There were a lot of good things in the Soviet Union: there were social guarantees, stipends for students, pensions. There was no big divide between rich and poor. And then after that, all the rulers were just interested in lining their own pockets. The rich got richer and the poor got poorer”.

Another interviewee, from the Donbass, comments: “I miss the Soviet Union, in a moral and ideological sense. I am not saying I liked the totalitarian system. But the human and social relations. Everything was more ascetic and more human. Market relations just push people away from each other”.

Yet it is also the case that, with the Stalinist regime’s snuffing out of workers’ democracy, these economic, social and cultural achievements were earned at enormous human and material costs. The dead-hand mismanagement of the centralised, unaccountable, unelected bureaucracy proved hugely wasteful and caused untold misery. Only a through-going political revolution, with the working class casting off the burden of the bureaucracy and introducing working-class democracy, could have defended the social gains and fully-realised the potential of the planned economy.

Moves towards these goals were attempted in revolutionary movements in Hungary in 1956 and Czechoslovakia in 1968, for example. Heroic resistance to Stalinist tyranny and a yearning for some sort of “socialism with a human face” tragically proved not enough. The lack of a far-sighted revolutionary party with mass support, based on the ideas and programme of the Bolsheviks, of Lenin and Trotsky and the Left Opposition, ultimately led to defeat.

Ukraine and Crimea

Walker spends much of his book on the east-west divisions in post-independence capitalist Ukraine, which broke out violently in recent years. Protests in 2014 in Maidan Square, Kiev, against the authoritarian, pro-Russian president, Viktor Yanukovych, were “genuine, dynamic and spontaneous”, according to Walker, who reported from the scene. But he warned that “there were occasional flickers of something more sinister. The red flags of the Ukrainian Insurgent Army [a nationalist force during the second world war] became a frequent sight”. As fighting took a more violent turn in Maidan Square, fear spread among people in the mainly ethnic-Russian south and east of the country. “Now that so many protesters had been killed on Maidan, in the name of a Russian-speaking president from the east, locals feared the nationalists would surely be out for revenge”.

Walker believes the dangers were greatly exaggerated by pro-Russian media and local politicians. He refers to his spats with investigative journalist, John Pilger, who Walker accuses of peddling pro-Russia “lies” regarding events in Ukraine. Whatever the real dangers – and there were fatal clashes, like the death of scores of pro-Russian protesters holed up in the Odessa trade union building at the hands of firebombing Ukrainian nationalists – there were genuine fears on the ground.

They were felt nowhere more keenly than in Crimea, a largely ethnic Russian region. Following the arrival of barely-disguised Russian armed personnel, a referendum was held in Crimea in 2014 on succession to the Russian Federation. Crimean Tatars and many pro-Ukrainians boycotted it, and “the only observers were a motley bunch of far-right European politicians”. But Walker also accepts that “it was clear from speaking with people that a majority favoured union with Russia, though how much that was to do with the messaging they had received from their televisions was a separate issue”. The official result showed an 83% turnout with 97% voting to becoming part of Russia – a later Kremlin report put it at a 30-50% turnout and 50-60% support.

Putin was lambasted by the western powers for the Crimea ‘invasion’ and ‘annexation’. But Walker highlights their hypocrisy: “The behaviour of the United States and its allies in the aftermath of 9/11 made it much easier for Russia to dismiss the moral high ground of American politicians. In the post-cold war world, the US had been free to act more or less as it pleased, with few checks and balances. An illegal war in Iraq with awful human costs and terrible long-term consequences did not result in international sanctions against George W Bush, Tony Blair or their respective countries. Why, then, should the largely bloodless annexation of Crimea have those same countries crying like hyenas?”

Bolshevism v Stalinism

Only a socialist policy on the right of oppressed nations and minorities, based on Lenin’s programme, can resolve the explosive and complicated national problems in the former Soviet Union. In the case of Crimea, this means the right of the people to determine their own future, free of any outside meddling, and with full rights of minorities like Crimean Tatars guaranteed. Only under a democratic socialist Crimea, as part of a voluntary federation of socialist states of the region, run on a free and equal basis, can these rights ever be fully realised.

Discussing the fate of the Crimean Tatars, Walker conflates the actions of the Bolsheviks with the crimes of Stalinism. He concedes that “Lenin’s policy to allow nationalities to ‘take root’ meant the Crimean Autonomous Socialist Soviet Republic was set up, as a unit with some devolved powers with the larger Russian republic”, and that, “even though Crimean Tatars by this point made up only 25% of the population, they were given a disproportionate number of leadership roles”. Without distinguishing between the early years of workers’ rule under the Bolsheviks and the later terror of counter-revolutionary Stalinism, however, Walker claims: “As elsewhere, there came famine, collectivisation and the purges, in which many of the top Tatar leadership were shot”.

The crimes against Crimean Tatars that Walker lists, including the oppression of Islamic beliefs and mass deportations, were not a seamless continuation of the policies and practices of Lenin, Trotsky and the Bolsheviks. They were the heinous actions of the Stalinist bureaucracy that could not brook any real opposition to its rule. After all, as Trotsky pointed out, if there were no real differences between Bolshevism and Stalinism, why does a river of blood separate them?

Walker also looks at the reaction of Russian-speaking people in the Donbass region of east Ukraine to the Maidan events and the overthrow of Yanukovych. He describes how “a well-drilled group of men”, led by a former Russian FSB (secret police) officer, seized buildings and announced a takeover of Slavyansk, a town north of Donetsk. Later, “leaked documents” made it clear that the “Russians were indeed stirring up trouble, and providing support to those with separatist inclinations from the very beginning in Donetsk and the region”.

While this may well have been the case, Walker also recounts how Alexander Khodakovsky, a local rebel leader, insisted “that the initial impulse was very much a local one… He wanted to show that Donbass had a real voice and real concerns. ‘Of course, afterwards, people from Russia made contact with us. Of course, we were used, we became puppets. But in the beginning, it was a genuine and natural thing’.” Walker comments that “for the most part, the visible leaders of the separatist movement were all either locals like Khodakovsky or irregular Russians… there were Chechens, Cossacks, anarchists, nationalists, communists, and radical Orthodox Christians”.

Putin had other aims, however: “Russia had wanted Crimea for the Black Sea Fleet at Sevastopol and the historic significance of the region. Its interests in Donbass were different: as it became clear that the whole of eastern Ukraine was not going to join Donbass in its uprising, Moscow had little use for an economically depressed region. Building a defendable border for hundreds of miles around Donbass would be a whole different challenge to sealing off Crimea at its narrow isthmus”.

The Kremlin “used Russian nationalists when it needed them”, Walker concludes, but “nationalism was a useful political tool only as a distraction, not a prescriptive philosophy for military action”. After being side-lined by Moscow, Khodakovsky told Walker: “If a political force appeared that espoused genuine socialist ideas, then 80% of the Donbass population would support it…” Khodakovsky adds: “Why would Russia want a place next door where this kind of ideology was dominant when in Russia itself there are so many people who are socially disenfranchised and would demand the same kind of thing there?”

Even though Khodakovsky is confusing a genuine democratically run socialist movement with the early days of his politically confused and heterogeneous Donetsk separatist movement, the point still stands: a bold socialist message can win over increasing numbers of working-class people and youth in Russia, and all parts of the former USSR.

Capitalist restoration has not proven to be the bonanza promised. The “gradual economic improvement of the oil boom years had tailed off after 2014, as western sanctions and plummeting oil prices combined to hammer the Russian economy”, Walker explains. A quarter of a century after the collapse of the USSR and widespread illusions in the market economy, more than twenty million Russians – 15% of the population – have incomes below the poverty line, while “38% had problems affording food and clothing”.

The economic crisis, falling living standards, wars and national and ethnic divisions – all these can only be seriously tackled by building united mass working-class organisations. Crucially, this means building independent trade unions and mass workers’ parties that strive to kick out the oligarchs and ruling elites and fight for a genuinely democratic socialist society.

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December 2018