The Rise and Fall of Russian Oligarchs and the Evolution of Capitalism

The term 'oligarch' in modern Russia is a term often overused and misapplied, most notably to describe the wealthiest individuals who amassed vast fortunes through corrupt and illicit means during the 1990s. This period saw a dramatic shift from the planned economy of the Soviet Union to a capitalistic framework, which in turn led to the rise and eventual fall of these influential figures.

How Did They Gain Power?

The road to power for Russian oligarchs was paved by a combination of factors, including hyperinflation, privatisation, and political connections. In the early 1990s, when the Soviet Union collapsed, the newly established capitalist framework enabled individuals to exploit state property and resources.

A pivotal player in this era was Mikhail Khodorkovsky, a former young communist turned oligarch. Through his involvement with Bank Menatep and oil company Yukos, Khodorkovsky and his allies managed to accumulate vast fortunes in a highly unethical and criminal manner. These actions mirrored similar practices in the West, where neoliberal advice from figures like Anders Slund helped in the restructure of Russian capitalism.

The Role of Oligarchs in Russia

During the 1990s, Russia indeed became an oligarchy, a system of government where power is concentrated in the hands of a few individuals, quite akin to the term 'oligarch' from Ancient Greece. These oligarchs wielded significant influence over political, economic, and social spheres, often to the detriment of the broader population.

By the late 1990s, the oligarchy had created a stark contrast with pre-existing ethnic lines, with many viewing the control by Jewish individuals as a form of nepotism and corruption. This perception was fueled by investigative journalism, such as the exposés on Ukrainian masonic lodges and Israel's alleged control, leading to a discourse questioning the very nature of the Russian state.

Putin's Redistribution of Power

Under Vladimir Putin, a different approach was taken to address the issues stemming from the 1990s. Putin's primary goal was to curb the excessive power of oligarchs and bring about a more regulated market economy. In his early years as president, Putin began by targeting those oligarchs who sought to extend their political power beyond their economic influence.

Mikhail Khodorkovsky became a prime example of this transitional period. In 2003, Khodorkovsky's company, Yukos, was accused of tax fraud and faced severe penalties. His assets were seized and he was stripped of political power, sending a strong message against any further ambitions for control.

However, Putin's actions were not solely about eliminating power; they were also about putting in place a more equitable and regulated market economy. The state-owned companies continued to be sold, and regulations were introduced to ensure that these transactions were conducted fairly. While not classified as anti-capitalism, Putin's economic policies aimed to ensure that the capitalist framework functioned more equitably and efficiently.

Conclusion

The rise and fall of Russian oligarchs represent a tumultuous chapter in the evolution of capitalism in Russia. From the corrupt and chaotic privatisations of the 1990s to the more regulated and ethical market economy of Putin's era, the trajectory reflects a complex interplay of economic, political, and cultural factors. It is important to understand this history to fully appreciate the current state of Russian capitalism and the ongoing efforts to ensure that the gains of this period benefit the broader population rather than a select few.