Russia’s capitalism under President Vladimir Putin was controlled by the state monopoly even before the aggression against Ukraine. Now the Russian government is taking another step. It demands a kind of blanket power of attorney from the members of the Duma to mobilize funds for the war economy.
The goal is clear: with changes to numerous laws, especially the law on national defense, the cabinet of Prime Minister Mikhail Mishustin is to be authorized to provide material and financial security for “operations” by the Russian army abroad.
The aggression in the east of the neighboring country is expressly mentioned in the justification for the government’s motion, according to a press release on the Duma website. But the authorization should obviously also apply to all other wars after the – unforeseeable – end of this war.
The Russian government, but ultimately Putin himself, wants a free hand in situations where he deems it necessary to enact “special measures in the economic sphere” to enable the army to fight “counter-terrorist or other operations outside Russia’s borders.”
The government should therefore be able to “operationally satisfy the requirements of the army and other military forces”. In detail, access to state reserves and state funds, which the legislature had originally dedicated to other uses, is obviously to be made possible without parliamentary control.
If the Duma agrees, which there is no doubt about, private companies will no longer be able to refuse so-called “state orders”. For example, the government could instruct mechanical engineering and vehicle manufacturing companies to repair damaged war technology as quickly as possible.
According to these plans, employees of public authorities, but also other Russian employees, could in future be required to work overtime, night shifts and work on public holidays.
Putin’s war against Ukraine fundamentally contradicts the business interests of the internationally networked Russian business elite. Nevertheless, the President has so far managed to avoid a significant conflict between the politically powerful and the oligarchs.
Shortly after the war began, Putin summoned business leaders and swore them to their patriotic duties.
At that time he gave the entrepreneurs a kind of property guarantee and expected patriotism in return. All problems would be solved with free market mechanisms, the president promised.
Shortly thereafter, he attacked the oligarchs, whom he regards as insecure cantonists, in a disturbing speech. Putin said he doesn’t judge anyone who has a villa in Miami or on the Cote d’Azur. The problem is not that they live there, but that mentally they are there and not with the Russian people. But the people are able to “distinguish the true patriots from scum and traitors”. The latter would be “spatted out”.
He is convinced that “such a natural and necessary cleansing of society strengthens our country”. The vast majority of Russian business leaders stayed by Putin’s side in this war.
The President of Russia’s Constitutional Court, Valery Sorkin, recently indicated that Russia’s business elite should brace themselves for further legislative changes. In a speech in St. Petersburg, Sorkin explained that the mobilization must be universal. And he called on the Russian economy to take serious steps towards the Kremlin’s expectations: “Russian business must show society its national character.”
