RUSSIA’S CRONY CAPITALISM THE PATH FROM MARKET ECONOMY TO KLEPTOCRACY, By Ayse Dietrich^*, Published by: Casemate Publishers, UK. Written by Rupert Wieloch, Year of Publishing: 2019. Subject Area: Russian History, Civil War, Book Type: History. Total Number of Pages: 258. ISBN: 9781612007533, $32.95 (Hardcover).

Åslund’s book Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy is an interesting book for anyone who is interested in history of Russian market economy and the state structure.

The book is composed of nine chapters. The first chapter “The Origins of Putin’s Economic Model” provides a brief description of the political system, a short historiography of Russian political thought, and its dominant features throughout the history: conservatism, unrestrained centralized authority, and nationalism. Then the author then examines the pros and cons of the socialist economy, the birth of Russian state capitalism, and crony capitalism. He describes the current economic situation as stable and stagnant.

The second chapter, “Putin’s Consolidation of Power” depicts how he consolidated his political power and established his control over the state apparatus by relying on trusted friends from St, Petersburg, how he built his “power vertical”, restored federal control over Russia’s various regions, established his “dictatorship of law” over the judicial system, and how he subordinated both the executive and judicial powers. The author also describes how Putin and his close associates gained massive amounts of personal wealth, transforming Russia into a kleptocracy.

In chapter three, “Conservative Fiscal and Monetary Policy”, the author examines Russia’s conservative macroeconomic policies and economic problems, and the fundamental causes of the financial crash etc.

Chapter four, “The Rise of State Capitalism”, discusses how Putin built state capitalism, how his regime confiscated large enterprises such as Gazprom, Rosneft etc., and why he has allowed only his close associates to run these corrupt companies. The author states that the Russian model of crony capitalism is based on an ancient patrimonial model created deliberately to offer maximum freedom to the ruler. In this ancient system state collaborations have transformed public property into tsarist ownership.

In chapter five, “The Expansion of Crony Capitalism”, the author provides detailed information on the new oligarchs, analyses Putin’s four most important cronies and their businesses, and their place within the new crony capitalism. The author argues that characterizing Russia under Putin as an oligarchy is inaccurate since wealth determines the balance of power among different forces in an oligarchy. Such a balance of power is absent in Russia today; all power is concentrated in Putin’s hands. Wealth seems to be more concentrated with a concurrent reduction in transparency. In conclusion the author provides a quick review of the destinies of the old oligarchs of the 1990s.

In chapter six, “How Large is Russian Wealth, and Why is it Held Offshore?”, the author, in addition to giving information of the wealth of Putin’s friends and Putin himself, examines the role of the fourth group, his lesser-known friends and their wealth which is stored for him in the Anglo-American offshore. He claims that around $800 billion is held anonymously abroad, and Putin and cronies have taken over half of it.

Chapter seven, “From International Economic Integration to Deglobalization”, discusses how Russia’s foreign economic policy changed after the imposition of Western sanctions on Russia following Russian aggression against Ukraine in 2014 which resulted in clear division in Russia between ‘us’ and ‘them’. The author claims that this policy is an odd combination of increasing trade protectionism and remarkably liberal capital flows, and its goals have shifted from increased international integration to isolation and protectionism.

In chapter eight, “Liberalism versus Statism, or Reform versus Corruption?”, the economic debate between the two big ideological camps, classical liberals versus statists and nationalists is examined. The author claims that economists shy away from discussing the real sources of economic trouble, weak property rights and corruption, making official economic pronouncements clichéd and colorless. The consensus among statists and liberals is that only democratization can create the conditions necessary to solve these problems, and that official economists are primarily interested in demonstrating their loyalty to Putin, putting them out of touch with the people’s concerns.

In Chapter nine, which includes conclusion, “Where is Russia Going, and What Should the West Do?”, the author assesses the current state of the Russian economy, provides an outlook on economic policy, and prioritizes the economic reforms Russia should carry out if genuine economic reform ever becomes a possibility.

Åslund stated that his main aim in this book was to establish the type of regime Putin has built, where it is going, how it is likely to act, and how the West can influence it. He has done his research satisfactorily, addressed the main concerns on Russian political and economical life and given a clear overview of Russia’s crony capitalism. The book serves its purpose well in that it allows researchers to fill in the gaps in their knowledge on this specific topic.