Russia, Ukraine, and Highgate

So there’s a rolling crisis with Russia going on. A few weeks back I responded to this thread from the good doctor Leo Strauss with this tweet. What I think is necessary to understand here is the model of Putin-era Russia Tony Wood asserts in this podcast from 2018:

Wood rejects the argument that you still occasionally hear that Putin represented a move away from the anarcho-capitalism of the Yeltsin years, that he “brought the oligarchs to heel” or some such. Instead, Wood points out, the sky-high Gini created during the 90s hasn’t gone anywhere, and neither have the oligarchic fortunes. In fact, new oligarchs have emerged, very often as a kind of service aristocracy whose wealth is founded on a patron-client relationship with the dictator. An example might be the railways boss and funder of wacky ideological projects, Vladimir Yakunin. Supporting VVP when it matters brings opportunity, and feudal protection when you need it. Such protection creates a debt that can later be called in. And of course Putin has himself become extremely rich, personifying the fusion of the state and the oligarchy. The whole point is to defend the ill-gotten gains of the 90s.

Another way to protect one’s ill-gotten gains, of course, is to get them out of Russia and convert them into, for example, houses in London. The policy relevance of this is blindingly obvious and it’s no secret to anyone who’s lived in London in the last, what, thirty years that an influx of oligarchic money is a big driver of hilarious property prices, big-ticket patronage, and vulgarity. In principle this gives the UK a really substantial pressure-point – the real estate is right there and until quite recently you could take tours of it.

If you listen to the podcast, though, you’ll observe something unusual – although Wood and the host, James Butler, accept these facts and indeed assert them with vigour, with about 10 minutes to go, they spend the rest of the show furiously denying that this completely unscrupulous moneyed and landed interest might ever involve itself in British politics, even though it’s a matter of public record that it’s a really substantial donor to the Conservative Party. This is a pity, because Russian Highgate and Lyubov Chernukhina’s permanent entrée to successive Tory leaders’ circles are the concrete reality of concepts like “capital flight” and “hockey-stick inequality”. There’s a reason why it was Jeremy Corbyn who spoke up first in parliament for imposing the Magnitsky powers after Sergei Skripal’s assassination, and why we had to put up with so much bullshit when Russian money scandals have been a constant among the Tories (and royalty) for a solid decade. If you think the Tories’ main interest is defending the gains from the surge of the Gini coefficient in the 80s and 90s, as you should, that’s what that looks like.

Leaving aside beefs and getting back to the point, taking this point of view sheds a lot of light on what kind of relationship Ukraine could possibly accept. In the conversation with the Doctor, there is quite a bit of discussion of the concept of “Finlandization”. The problem here is that although cold-war Finland couldn’t join NATO, it wasn’t required to join the political economy of the Soviet Union. It wasn’t expected to become part of Gosplan. Post-Soviet Ukraine, however, was very much part of the post-Soviet political economy, and crises with Russia have repeatedly broken out when Ukrainians have objected to this and Russia has tried to intervene and silence them. This is why it’s so important, at a cynically material level.

Ukraine could undertake not to join NATO, and Russia could in theory accept that, but the problem is whether Ukrainians would be expected to put up with the kind of economic relationships that have previously been imposed on them. This is why corruption was so central to successive protest waves. An example would be the fabulous RosUkrEnergo, a company that consisted only of a brass plate in a tax haven and that bought Russian gas exports and immediately resold them to Ukraine at higher prices. There was no reason for this entity to exist except that the elite on both sides literally, personally, owned it. Ukraine could accept some foreign policy arrangement if it didn’t come with the rider “RosUkrEnergo, and like it this time”.

4 Comments on "Russia, Ukraine, and Highgate"

  1. “Ukraine could undertake not to join NATO, and Russia could in theory accept that, but the problem is whether Ukrainians would be expected to put up with the kind of economic relationships that have previously been imposed on them”

    Or alternatively, putting up with that economic arrangement is the current price of keeping a bunch of Ukrainian oligarchs with connections in Eastern Ukraine on board, there is a reason the electoral map of Ukraine ends up looking like it does.

    The other choice is not to take Russian gas, but no one seems to be a fan of that (including, indirectly, the US).


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