As a contribution to the debate on the invasion of Ukraine, this article analyses the nature and dynamics of the Russian capitalist state created in 1991. It aims to answer the question: why has the Russian state used military violence against other countries of the former Soviet Union, and now in Ukraine? A common answer on the left is that Russia has reacted to aggression and encirclement by the US or NATO. But in my view, Russia is inherently spatially expansionist, seeking to economically, and therefore politically, dominate the former Soviet countries. The capitalists of Eastern Europe, however, were more inclined to link themselves to European and US capitalism, because the latter is much larger and richer economies than Russia. Russia has therefore used coercion to achieve or maintain economic integration.
In 1989-1991 the USSR converted to capitalism. At the same time, it split into countries that had been republics of the USSR. This change in the mode of production came from two pressures. There was external pressure from NATO, led by the US, starting in 1948; this deprived the USSR of new technologies and imposed the need for massive military expenditures to ward off a western invasion. There was also internal pressure from the Stalinist bureaucrats who wished to become capitalists, and who wished to use capitalism to more adequately subordinate the working class, as predicted by Trotsky in the 1930s.
Former bureaucrats and managers took over ownership of the economic assets. Because this process of privatisation was carried out through the state, the top politicians became central to the allocation of assets between oligarchs. State personnel further enriched themselves through a system of systematic corruption, ‘the parallel state’, where people have to pay bribes to get anything done, and these bribes travel up to the top. Russia has massive natural assets in oil, gas and a variety of minerals. The oligarchs were only interested in this sector of the economy since rents are easily extracted from it. Manufacturing, with its need for technical innovation and direct management of a workforce, was too difficult and was abandoned. Public services have been endlessly degraded to save the state from having to tax the oligarchs. The contemporary Russian economy was the result: Moscow, St Petersburg and a few other provincial capitals have a wide range of professional employment and extensive consumer services; former industrial areas other than armaments production and mining have seen little reinvestment, and most have high rates of unemployment; the countryside has sunk into absolute poverty (see Matveev and Zhuravlev in Socialist Register 2002).
Since 1991 the working class has been subordinated to capital through the ‘need’ for capital to be profitable. No real trade unions existed in the USSR, and labour organisation has been extremely difficult. Politics potentially provided a means to push for working-class interests, but the Communist Party turned to nationalism and thus subordination to capital. When Navalny started to take up working class economic concerns in the second half of the 2010s, Putin, therefore, stepped up the repression of his movement. To make sure that the working class would remain passive, Putin, from his election in 2000, has steadily tamed the media. Putin is, therefore, able to maintain ruinous expenditure on the military, and to undertake wars, without any organised resistance from the working class.
The oligarchs have accumulated massive money capital. But because manufacturing and its knowledge infrastructure have collapsed, there are few other substantial investment opportunities in Russia other than big-city consumer services and property development. The accumulated capital of the oligarchs, therefore, needed outlets abroad. They found these partly by channelling their money into world financial circuits, particularly via London, but also seeking investment opportunities in the other former USSR republics and in Eastern Europe. In becoming an exporter of capital, Russia has followed in the footsteps of the leading capitalist countries since the late 19th century: Lenin and Hilferding saw the export of capital as a key attribute of modern imperialism.
But here the Russian bourgeoisie faced a problem. After 1991, Western imperialism integrated Eastern Europe, including the former Soviet Baltic states, economically and politically with Western Europe and the US, and looked set to do the same with the other European former Soviet states and even the Caucasus. The Western European countries wished to invest in low wage Eastern Europe and to use immigrant labour from there. Unified Germany, continuing West Germany’s Ostpolitik, sought increased trade and investment with Russia, notably in the import of gas, on which Eastern Europe was also dependent. In contrast, the US wished to draw Eastern Europe into a political-military alliance, motivated by its ambition for world political dominance against Russia and, later, China. It, therefore, encouraged the Eastern European countries, and even ex-Soviet countries such as Georgia, to join NATO. This diverged from the wish of the Western European powers to increase trade and investment with Russia and to thus remain friendly with the Russian state. The Eastern European bourgeoisies, for their part, gained integration with the largest economic block in the world, and some nice EU subsidies. As Russia became more militarily aggressive, the Eastern European governments sought to join NATO to deter possible Russian aggression.
In the 1990s, the Russian bourgeoisie, therefore, lost the ability to integrate Eastern Europe into its economic sphere. Its ambitions shrunk to the former Soviet states (minus the Baltics). But for the bourgeoisie of these countries, economic integration with the west was a far better prospect, for the simple reason that Russia has a far lower total GDP, and a lower GDP per head, than Europe. To keep the ex-Soviet states in its economic sphere, Russia, therefore, had to resort to coercion which took two forms: military invasion, and gas supply threats. Hence the invasions of Chechnya, Transnistria, Georgia, Ukraine in 2014 and 2022. Thus the economic expansion of Russian capital has led to the military expansion of the Russian state. The capitalist Russian state is territorially expansionist in a way that the USSR was not, a point poorly understood on the left.
In the case of Ukraine after 1991, the oligarchs and governments oscillated between European and Russian alignment. When the government switched from Russian to European aligned in 2004, Russia cut off the gas on which Ukraine was wholly dependent. This attack eventually led to the pro-Russian Yanukovich being re-elected in 2010. When Yanukovich was overthrown by popular protest in 2014, Russia resorted to the military option: invasion of Crimea and creation of the two south-eastern enclaves. The election of Zelenskiy in 2019 backed by Europe-aligned oligarchs meant that Russia had to turn up the military pressure in order to reinstate a Russia-aligned government.
The present invasion of Ukraine should not, then, be attributed to Russia needing to defend itself from ‘encirclement’ by NATO. (The US, and especially the Western European countries, have never had a project of a military attack on capitalist Russia.) It is rather the result of the Russian bourgeoisie seeking to tie the ex-Soviet countries into its economic sphere. Since Russia’s economic offer to those countries is much weaker than Europe’s, Russia has pursued this aim through coercion.
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