As Russia’s invasion of Ukraine nears its fourth anniversary, is Donald Trump right to dismiss what is still a not insignificant global power as a ‘paper tiger’? CHRISTINE THOMAS reviews two recent books asking, how powerful is Putin? While, on page 24, we reprint a 1995 article explaining the roots of Russia’s great power aspirations in the capitalist regime established as the Stalinist dictatorship disintegrated from the late 1980s.
Russia under Putin: Fragile State and Revisionist Power
Edited by Andrew S Natsios
Published by John Hopkins University Press, 2025, £39.40
Perfect Storm
By Thane Gustafson
Published by Oxford University Press, 2025, £22.99
Russia’s invasion of Ukraine in 2022 – unleashing the most serious war on European soil since the second world war – together with Trump’s re-election in the US, has raised fears about escalating violence and bloodshed in Europe in particular, but also more widely, and even the possibility of a nuclear exchange.
Mark Rutte, general secretary of NATO, has argued that Russia could be ready to attack NATO within five years. President Emmanuel Macron of France has declared that Russian aggression “knows no borders” and will not stop at Ukraine, while the Estonian prime minister, Kaja Kallas, has warned that a Russian war “on the West” is coming in the next decade. All have backed a massive increase in arms expenditure in Europe in order to combat what is being presented as an imminent Russian threat.
And after a disastrous initial invasion, and a long, drawn-out war of attrition, Russia now appears to have consolidated its position in the war in Ukraine. But just how strong is Russia under Vladimir Putin? Two recently published books, Perfect Storm, and Russia under Putin (a collection of essays) offer some useful material to help answer that question.
As the next article by Lynn Walsh explains, Russia’s post-Soviet ‘imperial ambitions’ didn’t originate with the coming to power of Putin in 2000, but were present from the beginning of the newly established capitalist regime that came to power as the Stalinist dictatorship disintegrated. Even as he attempted to ingratiate the new capitalist class with triumphant US imperialism, Boris Yeltsin began to assert Russia’s burgeoning national capitalist interests in the ‘near abroad’ – the newly formed independent states that had previously made up the Soviet Union until its implosion in 1991. While the former Soviet bureaucrats and state apparatchiks overwhelmingly supported the transition from a crumbling predominantly state-owned planned economy to a capitalist system, enriching themselves in the process, many, like Putin (a former KGB operative), considered the territorial disintegration of the USSR and its decline as a global superpower a national humiliation. Putin famously described the collapse of the Soviet Union as the “greatest geopolitical tragedy of the 20th century”.
But their pretensions had no economic basis to them. The ‘shock therapy’ restoration of capitalist relations into Russia, involving unregulated fast-track privatisation, the almost overnight lifting of price controls and the slashing of state subsidies, introduced by Yeltsin and overseen by the IMF and Western capitalism, led to economic disaster. In 1992 prices rose by a stratospheric 2,529%. Industrial production plummeted by almost 50%. Tens of thousands lost their jobs and were forced into destitution while the former elite of party officials, factory directors etc used their privileged positions from the old regime to plunder state assets, transforming themselves into obscenely rich capitalist oligarchs.
Moreover, Western capitalist investment in the Russian economy had not materialised in the quantities expected. As Thane Gustafson details in Perfect Storm, although Western capital and technology were introduced into some manufacturing sectors like the car industry, investment was mainly confined to retail, services, and the energy sectors. Putin himself pointed out that in 2000, foreign direct investment in Russia was around $11.5 billion compared to $43 billion in China. Instead of being transformed into a global economic powerhouse, post-Soviet Russia had become primarily a source of cheap raw materials, especially oil and gas, to be globally exploited by the major Western capitalist powers.
Putin in power
“The Russian people had had enough of unpaid pensions and wages, criminal bands and oligarchs running the economy and the government, and no rule of law. They were ready for stability and growth under the unknown Putin”, writes Paul Gregory in Putin under Russia. Putin had the good fortune of becoming president just as the economy was beginning to emerge from the depths of the post-transition depression, and his first two terms coincided with a significant rise in the price of oil on international markets. On the back of an economic boom, the living standards of many ordinary Russians improved from the abject misery of the chaos of the 1990s, notwithstanding the huge disparity between their incomes and the grotesque fortunes of the oligarchs. It was mainly this economic growth that created a relatively stable social base for his regime in the big urban areas of the Russian federation.
Putin also set about strengthening the Russian state and consolidating power centrally around himself. Oil and gas revenues were used to modernise and beef up the army and the security forces. The democratic rights which still existed have been gradually eroded through state controls over the media, including the murder of journalists, restrictions on internet access, curbs on the functioning of opposition parties, the assassination, poisoning and imprisonment of oppositional figures, and a general hardening of state repression of dissent.
In 2003, the oligarch Mikhail Khodorkovsky’s Yukos empire was seized by the state as punishment for financing parties opposed to Putin, and he was sentenced to ten years hard labour in Siberia as a message to the others to stay out of politics. Initially, attempts to rein in the power of the hated oligarchs proved popular. But, effectively, Putin was merely replacing the original beneficiaries of Russia’s gangster capitalism by a clique of his own corrupt cronies, personally loyal to him, perpetuating the oligarchal character of the regime and reinforcing his own authoritarian state power. Putin’s inner circle now controls up to a third of the country’s mineral, oil and gas wealth. State monopolies like Gazprom and Rosneft, writes Gregory, serve as “private piggy banks” for the elite.
Around 60% of Russia’s listed companies are state-owned, nominally more than in China. But whereas the Chinese regime has succeeded in transforming the country into the world’s second biggest economy, and the world’s largest exporter – worth $3.58 trillion in 2024 – Russia’s pre-Ukraine war exports were less than half those of tiny Belgium. In 2022, China invested $280bn a year in microelectronics compared to $1bn in Russia.
Unlike Russia’s ‘big bang’ restoration of capitalism, which totally eliminated the old state apparatus and led to economic chaos, the Chinese Communist Party (CCP) firmly controlled the gradual introduction of capitalist relations into the economy from the late 1970s. The CCP’s ability to wield important state levers of control and influence over huge swathes of the economy – although not without its own contradictions – has enabled China to emerge as both an economic and military superpower. In Perfect Storm, Gustafson gives the example of Putin’s lack of control over the Russian economy at local level where, despite centralising state power around himself, he has no points of support to fill the vacuum of the former Soviet Communist Party apparatus.
Great power aspirations
When the 2007-2008 global financial crisis erupted, it immediately exposed the fragile economic base that underlay Putin’s political ‘legitimacy’. Despite the previous years of economic growth, based on high commodity prices, Russia’s economy was still almost entirely dependent on extremely volatile energy exports. As global prices collapsed, Russia was hit harder than any other member of the Brics grouping of ‘developing’ nations – with GDP falling by almost 10%.
This was the trigger, argues Gregory, for Putin’s five-day war against Georgia in August 2008, which imposed Russian control over the Russian-speaking areas of South Ossetia and Abkhazia. It served to distract attention from economic crisis at home, sending Putin’s favourability ratings up once more. In the introduction to Russia under Putin, Andrew S Natsios argues that Russia’s foreign policy “may in fact be better explained as a response to the power dynamics domestically… rather than by external actors”. “Moscow politics”, he writes, “may be driven by the insecurity and legitimacy of the small circle of oligarchs and Siloviki [security forces] surrounding Putin who fear their own people more than they fear any outside threat”. Kathryn Stoner echoes these arguments writing, “what Putin fears most is not a NATO invasion of Russia via Ukraine… It is upheaval from within that is the greatest threat to his regime”.
In 2012, Putin and his cronies had a glimpse of what that could mean. Hundreds of thousands took to the streets across the whole of Russia demanding ‘Russia without Putin’ and shouting ‘Putin is a thief’, after Putin was widely suspected of rigging the 2011 presidential elections to return to the presidency following a spell as prime minister ‘under’ his puppet Dmitry Medvedev. A year later the Maidan mass movement exploded in Ukraine against Viktor Yunukovych, a Putin ‘ally’, replaced in a coup by a more ‘West-leaning’ regime. By 2014 the Russian economy was stalling – output was only slightly above that of 2008 – and in opinion polls only 29% were saying they would vote for Putin in an election. This was the background to the seizure of Crimea and part of the Donbas area of eastern Ukraine. By 2014, Gregory writes, “Putin realised that he could not offer ‘bread’ in the form of a growing economy, but he could offer ‘circuses’ in the form of a foreign enemy threatening mother Russia’s very existence”.
Nationalism and restoring Russia’s great power status on the global stage became increasingly the main tools for shoring up Putin’s domestic social base, and defending his regime and the economic interests of both himself and the oligarchal clique around him, alongside a tightening of the screw of internal repression. Between 2010 and 2019 the regime spent 40% of its total military expenditure on weaponry, more than twice that of France, Germany and the UK. Russia is now the world’s fourth largest spender on the military, armed with advanced conventional weapons as well as a modernised nuclear arsenal. According to Gregory, spending on internal security is only 15% less than the entire defence budget.
In 2015, that military hardware was put to the test in Syria, when for the first time Putin intervened beyond Russia’s immediate ‘sphere of influence’ in the former Soviet republics. But, Natsios writes, rather than a “carefully designed and executed strategy of conquest”, Russia’s interventions could be seen as “ad hoc and opportunistic”. Putin, he argues, has “probed for Western weaknesses, resolution, and indecision, and then, if there was no resistance, he has intervened to extend Russia’s reach by absorbing more territory”.
It’s certainly true that the February 2022 invasion of Ukraine can only be fully understood in the context of the balance of forces in the new global order, in which US imperialism is no longer the uncontested economic and military hegemon it appeared to be in the immediate aftermath of the collapse of Stalinism. It was undermined by disastrous interventions in Afghanistan and Iraq, and the global economic crisis of 2007-2008, and is now challenged by an economically and militarily strengthened Chinese regime. This shifting international arena has opened up a space for ‘second tier’ powers like Russia to attempt to assert their own economic and geopolitical interests in an increasingly multipolar world.
Natsios conjectures that Putin, having witnessed the humiliating withdrawal of the US from Afghanistan, gambled that it would have no appetite for a further military engagement, either directly or indirectly, in defence of Ukraine. And that given Europe’s dependence on Russian oil and gas, and its relatively muted response to the annexation of Crimea in 2014, they would not be able to agree on sanctions. With $650 billion in reserves built up as global oil prices had gradually improved, and a modernised military machine, Putin believed the conditions were favourable for a full invasion of Ukraine. The ground had been prepared ideologically via an enormous state propaganda campaign against what Putin labelled the Ukrainian ‘Nazi’ regime, backed up by a ‘rapacious NATO’, determined to ‘destroy Russia’s culture, values and existence’.
War economy
Putin clearly miscalculated. The Ukrainian government didn’t collapse, and the initial invasion revealed serious weaknesses in both Russia’s military leadership and ordinary troops, despite the huge sums spent on renewing and professionalising the armed forces – problems which continued for the first two years of the war. The Western capitalist powers, of course, did manage to come to an agreement to implement some sanctions on oligarchs and state officials, companies and financial institutions. But these measures have not paralysed the Russian economy and the financing of Putin’s war machine.
Putin has successfully exploited the existing multipolar world relations to bypass and mitigate the worst effects of those international sanctions that were placed on the economy. Sanctioned goods have been substituted by imports of mainly Chinese consumer and dual-use goods. India and China have become major buyers of Russian energy, with India having imported around $140bn of crude oil since the invasion. In addition, Turkey and the United Arab Emirates, and also some states in the Caucuses and Central Asia, have served as ‘third country hubs’ for the export of Russian energy onto world markets.
Having initially denied that a war was even taking place in Ukraine, referring instead to a ‘special operation’, from 2023 Putin moved to place the whole of the Russian economy on a war footing, ramping up public spending, and diverting huge amounts of capital and labour away from civilian sectors towards the military. ‘Extraordinary measures’ have involved drawing extensively on reserves, seizing money from social security pension funds, raising export taxes and taking over foreign businesses, which are then given to Putin’s friends to control.
Initially, this ‘war Keynesianism’ gave a boost to the economy following the crisis in the immediate aftermath of the invasion. The economy grew by 4.1% in 2023 and by 4.3% in 2024. Consumption increased as a result of higher wages, and Putin has been able to pay huge bonuses to bribe volunteers to continue to sign up to fight in Ukraine, despite the horrific ‘meat grinder’ Russian war tactics, which are thought to have resulted in at least one million casualties on the Russian side. Combined with increased state repression and, to a lesser degree, state propaganda evoking the ‘national unity’ and sacrifice which defeated the Nazis in the ‘Great Patriotic’ war, this has helped to cut across opposition to the war and maintain Putin in power.
Fragility and instability
However, as Gregory writes, Putin can’t indefinitely choose guns over butter. The civilian sectors of the economy are suffering from a shortage of skilled workers as labour is increasingly concentrated on those industries which supply the military. Falling energy revenues and high interest rates introduced to curb soaring inflation are now placing severe strains on the economy. The chief executive of Russia’s biggest bank, Sberbank, has said that the country is in “technical stagnation”.
Gustafson explains that despite the ‘work arounds’, sanctions have nonetheless been damaging to the economy, exacerbating “pre-existing vulnerabilities” – over reliance on foreign technology, credit and revenues from commodity exports. China accounted for 80% of sales in the Russian car sector by 2023, but this was almost entirely based on imports, not investment in car production within Russia itself as the Chinese regime looks to avoid creating competition in the Russian market. Russia remains effectively a petro-state, dependent on the vagaries of the international energy markets.
Most capitalist economic commentators believe that, as public borrowing is still quite low as a proportion of GDP, Putin should be able, despite the current economic problems, to carry on financing the war in Ukraine for about another year. But these calculations don’t take account the effect of tighter sanctions, including secondary sanctions on China and other ‘third’ countries, should the US and European capitalist powers manage to agree and implement them, which is not certain.
Nor do they factor in how long ordinary Russians will be prepared to endure the sacrifices they will increasingly be asked to make to pay for the war – like the recent sales tax increase. As Gregory says, “we cannot look inside Russia to take the pulse of the Russian people” but the longer the war drags on the greater the pressures and burdens become. Thousands of brave Russians did take to the streets to demonstrate their opposition at the beginning of the war but protesters were met with brutal repression and arrests – around 20,000 by last year. Yet, as Stoner reminds us, “the fates of Egypt’s Hosni Mubarak and Libya’s Muammar Gaddafi following the Arab Spring of 2011 attest to the fact that even autocrats with the seemingly unfettered ability to use state-sponsored violence to impose their wills on their people can suddenly be overthrown”.
Putin’s security regime rests on fragile economic and social foundations: a global military power with feet of clay. In Bonapartist fashion, Putin has balanced between the different wings of the state security forces as well as the economic ‘liberals’ and those demanding even more state intervention. In May 2023, divisions within the security apparatus burst into the open when Yevgeny Prigozhin, leader of the Wagner group of mercenaries, marched on Moscow. As the war continues, further tensions and fissures could develop and in turn give confidence to ordinary Russians to rise up.
However, the Arab Spring also revealed that although mass movements can unexpectedly erupt against even the most corrupt and dictatorial regimes that appear on the surface to be invincible, a revolutionary party based on the organised working class needs to be built with a programme that can put forward a viable socialist alternative. In the absence of such a force, the political vacuum can be filled with equally, if not more, brutal military regimes and dictatorships, or even social disintegration. These could be possible outcomes in Russia should Putin fall. It won’t be easy for the working class in Russia to create and strengthen its own organisations, including its own party, but this is the key task there and internationally in order to completely eradicate the threat of war, repression and economic devastation.