Thursday, September 18, 2014

Window on Eurasia: Putin’s Cancellation of His ‘Contract with Business’ Will Trigger ‘War of All Against All,’ Pastukhov Says

Paul Goble


            Staunton, September 18 – Having earlier been forced to end contract with the Russian people of loyalty in exchange for economic growth, Vladimir Putin as a result of his invasion of Ukraine and the exchange of sanctions has been forced to tear up his contract with business of “security in exchange for loyalty,” according to Vladimir Pastukhov.


            That is the political meaning of the arrest of oligarch Vladimir Yevtushenkov, the St. Antony’s College Russian historian says, and it will trigger a new round of struggles among various clans which in the Russian context will take the form of a Hobbesian “war of all against all” (


            The reason Putin was forced into taking this potentially dangerous step is the looming budget deficit which he is going to find it hard to make up. Putin’s system, Pastukhov says, is nothing other than “a modernized and stylized for the Internet era of the medieval system of ‘feeding’” in which only those who are loyal are allowed to share in the wealth of the state.


                As long as the budget is in balance and the amounts that can be shared out are growing, the commentator says, everything is fine; “but if the size of the pie declines … then the struggle for access sharply intensifies” and someone or even many someones have to be driven away from the table or the system has to be transformed if the state is to survive.


            With the rising costs of the war in Ukraine and the sanctions both those imposed by the West and those imposed by the Kremlin, the pie in Moscow is getting smaller, and thus “in definite sense, Yevtushenko became the first really serious victim of Western sanctions.”  But his arrest sends a signal to all the other oligarchs, and it is unlikely to be the last.


            Not surprisingly, the Russian historian continues, many have compared the arrest of Yevtushenkov with the earlier arrest of Khodorkovsky. Both are political, but “the politics of today is entirely different than it was ten years ago. The Yukos affair “preceded the flowering of the regime; the Yevtushenko case presages its end.


            With Khodorkovsky’s arrest, Putin sent a message to all the other oligarchs that “if you do not want the same thing to happen to you than has happened to [him], then conclude a contract with the authorities: ‘loyalty and part of the profits in exchange for security,’” an arrangement that led to the appearance of “’systemic business.’”


            With the arrest of Yevtushenkov, Pastukhov argues, what has happened is something very different: the Putin regime itself has torn up the contract it had with the oligarchs because it can’t afford to allow them to keep making money at a time when the state, as a result of Ukraine, is becoming impoverished.


            Put in crudest terms, what Putin has signaled is that “the time of ‘arbitrary action for others’ is ending. The new time of ‘arbitrariness for all’ is beginning,” and in that new era, the oligarchs are not exempt. 


            But they are not the only ones who are now at risk, Pastukhov says.  The force structures on whom Putin has relied are also in a new position. Given budgetary shortfalls, the Kremlin isn’t going to be able to “look through its fingers” at the enormous diversion and theft of public resources by them.


            Thus, “what has begun with Yevtushenkov will not end with him.  Vicious clan wars lie ahead for Russia … and that will continue until the Russian elite … finally recognizes that ‘a state of laws’ [a Rechtstaat] is not just something liberals want. It is something that [the elite itself] can deal with more cheaply than with a war of all against all.”


            In a commentary published yesterday in “Vzglyad,” Petr Akopov expands on this idea. He also says that Yevtushenkov’s arrest marks “a change of eras,” but in contrast to Pastukhov, he argues that what the Kremlin is likely to do is to reverse privatization and restore a statist economy (


            Although Putin has pledged not to so that, he may not have any choice not only because of the deficits Pastukhov points to but also because the Russian people unlike the oligarchs have not accepted either the manner or the results of privatization and are now quite prepared to support a reversal of that process.


            “The economic war with the West,” Akopov says, “is forcing the authorities to recognize the need for an acceleration of the process of consolidating strategic branches into the hands of the state and inevitably raises issues not only about the role of the oligarchate in Russian life but also of the relationship of state capitalism and large private property, about the social state and cooperative property, about the free hand of the market, and yes, about capitalism as such.”

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