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Putin's playground

Russia's leader and his cronies have crippled every constraint on their ugly brand of capitalism

• Edward Lucas
• The Guardian,
• Monday February 11 2008

Capitalism is amoral, verging on the immoral. What makes it tolerable is constraint and redress. Voters, consumers, shareholders, public officials, lawyers, legislators, journalists and pressure groups are counterweights to the ruthless and narrow pursuit of private profit. That doesn't work perfectly in the west, but it doesn't work at all in Vladimir Putin's Russia, where the fusion of political and economic power is complete.

The ex-spooks and their business cronies have launched a unique experiment in state capitalism, where the same people run both ministries and the industries they regulate, where markets are opened and closed according to the political clout of the participants, and where the rule of law and rights of the individual mean nothing.

The rough political pluralism of the 1990s had flaws, but it has given way to something far worse. Putin and his colleagues have crippled every constraint and removed every means of redress for the wronged. Opposition parties are marginalised; elections are like televised wrestling, a sham contest between carefully vetted contestants. The victory of Dmitry Medvedev in the presidential election on March 2 is as inevitable as it is puzzling. Nobody doubts he will win; nobody knows what he will be like in power or how long he will stay there.

The Duma has become a mere sounding board for the authorities. Every organ of state is harnessed to do the Kremlin's bidding. The judiciary, police and other supposedly independent bodies have become part of what Lenin referred to as the "transmission belt". But instead of communist ideology, the Kremlin now promotes "sovereign democracy" - a ragtag mixture of xenophobia, nationalism, mysticism and self-righteousness, buttressed with the sort of rhetoric that points to "a new phase in the arms race", as Putin said on Friday.

Civil society has been neutered. Any body receiving western funding attracts official displeasure. The bland culture-mongers of the British Council, hauled from their beds in the middle of the night to answer for the "crime" of working for foreigners, are just the most prominent casualties of the squeeze.

In 1990s Russia, under Boris Yeltsin, the crude pluralism of the media meant nobody was above criticism. Now draconian law and forced changes of ownership mean every national television channel, most newspapers and all but one radio station toe the official line.

The harshest treatment is reserved for individuals. Some, like Anna Politkovskaya, are killed. More often, the story is of intimidation, of conscription into the army for young men such as Oleg Kozlovsky, leader of an anti-Putin youth group, or incarceration in psychiatric hospitals, as has happened to Roman Nikolaichik, an opposition activist.

Nor does Russia come under any external constraint. It flouts the rulings of the European Court of Human Rights. With foreign debts paid off and the Kremlin kitty stuffed, foreign donors and creditors have no leverage. Indeed, now Russia's firms romp through the capital markets in London and New York aided by lawyers and bankers who, when it comes to selling a stolen oil company, see not a jail cell but a bonus.

Old cold war hawks have long been bristling about Russia's soaring defence budget and bullying of western darlings like Estonia and Georgia. But criticism from the left has been oddly muted, partly thanks to Putin's self-depiction asa counterweight to a US "unipolar world" exemplified by Dick Cheney and oil-driven military adventures. Yet their days are numbered: US democracy is wriggling out of the Bush administration's grip. A far uglier face of capitalism lies to the east, not the west.

· Edward Lucas is the author of The New Cold War: How the Kremlin Menaces Russia and the West