Putinomics: Power and Money in Resurgent Russia

by Chris Miller

When Vladimir Putin first took power in 1999, he was a little-known figure ruling a country that was reeling from a decade and a half of crisis. In the years since, he has reestablished Russia as a great power. How did he do it? What principles have guided Putin's economic policies? What patterns can be discerned? In this new analysis of Putin's Russia, Chris Miller examines its economic policy and the tools Russia's elite have used to achieve its goals. Miller argues that despite Russia's corruption, cronyism, and overdependence on oil as an economic driver, Putin's economic strategy has been surprisingly successful.

Explaining the economic policies that underwrote Putin's two-decades-long rule, Miller shows how, at every juncture, Putinomics has served Putin's needs by guaranteeing economic stability and supporting his accumulation of power. Even in the face of Western financial sanctions and low oil prices, Putin has never been more relevant on the world stage.

Genres: Russia, Economics, Politics, History, Nonfiction, Audiobook, Russian History

217 pages, Hardcover

First published February 8, 2018

About the author

Chris Miller teaches International History at Fletcher School at Tufts University. He is also Jeane Kirkpatrick Visiting Fellow at the American Enterprise Institute and Eurasia Research Director of the Foreign Policy Research Institute. (Source: Amazon.com)

Reviews

[Boudewijn · Rating 5 out of 5]

Putinomics is the description of the social and economic policy Putin had applied in order to remain in control. This book by Chris Miller described these policies and gives an excellent overview of the Russian economy.

The book starts with the economic situation under Jeltsin, where Russia was marked by the results of the 'shock therapy'. Miller describes how Putin improved the economic situation, in large part of the oil boom in the 90's as well as how he gained the upper hand over the oligarchs. By maintaining control over the country's abundant natural resources Putin has made sure he can receive siginificant resource streams enabling him to fund social programs such as pensions. This financial stability enhances Putin's popularity at home.

This book increased my knowledge on the critical part the oil and gas sectors still play within the Russian economy and how a decrease of oil prices would impact Russia. It is very well written and despite some economic terms being used, very readable.

The only flaw which I could think of is the fact that this book was written before the Russian invasion of Ukraine in 2022. I would be really interested in finding out how Chris Miller preceives the future propsects of the Russian economy now that sanctions have been implied and the prolonged war in Ukraine becomes an ever more heavy burden on Russia's economy.

[Gregg · Rating 3 out of 5]

Putin’s rise to power was very much tied to the economics of Russia. Particularly interesting was how much Putin’s support of pensioners led to his political rise. The economy is also far too integrated with oil for it to be healthy. These points all indicate that strong economic sanctions imposed on Russia May be the death knell for Putin’s power. Putin May have overestimated his military and economic strength and miscalculated in the Ukraine. This book would seem to indicate that public opinion may swing against Putin faster than anticipated.

[Kevin]

The benefit of this book is Miller's ability to explain the complicated and completely alien (to me) world of modern Russian economics. If you are interested in the financial part of Putin's power, this is an excellent book. There are insights into politics, diplomacy, and the present situation in Ukraine.
This book might go a bit deeper, at times, than the average reader might be looking for.

[Sam Sharpe · Rating 4 out of 5]

An understandable introduction to how Putin came to power in Russia, how he intends to keep his power, and lastly how he hopes Russia will ascend on the world stage. Not too much detail here, which for me being new to Russian economics, was appreciated.

[Dmitry · Rating 2 out of 5]

(The English review is placed beneath the Russian one)

Мой батя не стучал
За слово отвечал
Затем завод, металл
Где получал
В сентябре пятнадцать
В октябре пятнадцать
В ноябре пятнадцать
Но хотелось двадцать

Книга мне напомнила газету «Ведомости». Можно даже сказать, что книгу читать было также интересно, как читать статьи из газеты «Ведомости». Именно поэтому когда я первый раз попытался прочесть эту книгу, я очень быстро понял, что для тех читателей, кто следил за экономическими новостями из России, книга ничего нового не скажет, а для тех, кто ничего не знает об экономической составляющей путинского правления, книга будет недостаточно сфокусированной.

Книга начинается аж с эпохи правления Ельцина, т.е. залоговых аукционов и пр. С одно стороны, путинизм является логическим продолжением ельцинского правления, однако с другой стороны, из-за этого очень сильно расфокусируется внимание читателя, ибо правление Ельцина и правление Путина, несмотря на сильную взаимосвязь, всё же два разных правления. Если автор решил написать книгу об экономической системе, которую построил Путин, то нужно было писать только о Путине, а не начинать с таких деталей как залоговые аукционы. Читатель просто не запомнит, с чего началась книга и как это связано с Путиным. Да и важны залоговые аукционы в контексте политики, ибо они сильно повлияли на политику, и лишь в меньшей степени, на экономику.

Далее, автор много внимания уделяет политическим разборкам с олигархами, делу ЮКОСа и пр. С одной стороны, это важные вехи путинского правления, но с другой, Путин мог не устраивать никакого дела ЮКОСа, а ограничиться высылкой всех неугодных ему бизнесменов. Итог всё равно был бы точно такой же, т.е. огосударствление крупнейших сырьевых предприятий.

Разумеется, если описывать путинскую экономику, то никак не обойтись без её главной составляющей – нефтегазовой отрасли. Автор по этому поводу всё пишет правильно, однако так как об этом, т.е. о нефтегазовой игле, на которой сидит российская экономика, я знаю уже очень давно и в этом нет никакого секрета даже для иностранцев, то мне было очень скучно читать о том, что я и так знаю. Об этом пишут все, включая иностранцев, когда речь заходит о России и причинах подъёма российской экономики при Путине. Так же автор точно указывает на важность для путинской системы вовремя выплачивать пенсии и иные социальные пособия и зарплаты людям находящихся на государственном попечении (врачи, учителя, военные, милиция и пр.). Жаль, что автор не углубляется в эту тему.

В итоге, книга как-то совсем не запомнилась. Многие куски текста очень и очень скучные. Мне намного интересней слушать экономических аналитиков, чем читать о том же самом в газете типа «Ведомости» или в таких книгах как эта. Добавим к этому крайне неудачный подбор тем. Хотя автор и позиционирует свою книгу как исследование путинской экономики, но на самом деле книга на 60% состоит из описаний политических событий, о которых можно прочесть в сотнях книга на тему «России при Путине». Поэтому-то книга и получилась скучной. Я хочу сказать, что возникает ощущение, что автор, из-за недостатка сведений о путинской экономике, решил добавить вместо них политические события того периода. В итоге не получилось ни хорошей книге по экономике ни книге по политическим событиям того периода. Хотя, если учесть что книгу будут читать иностранцы, наверно это лучшее из того что есть. Ведь доступа к англоязычным интервью Сергея Алексашенко или Сергея Гуриева, которые очень хорошо описывают экономическую составляющую путинского правления, у них возможно нет.

Короче говоря, тем иностранцам, которые хотят понять, какую экономическую модель выстроил Путин, лучше поискать что-то другое, более сфокусированное на экономике и менее – на политике. А это означает, что им заранее стоит изучить или уже знать о том, что представляет собой политическая эпоха Ельцина, залоговые аукционы, дело ЮКОСа, политические изменения, которые произошли при Путине. Тогда, сосредоточившись только на экономике, станет ясно, как же Путин построил ту экономическую систему, что позволила ему манипулировать населением России настолько долго и настолько успешно. Эта книга даёт ответ на этот вопрос, но не самым лучшим образом и не очень подробно.

The book reminded me of the newspaper Vedomosti. One might even say that the book was as interesting to read as reading articles from Vedomosti. That is why when I first tried to read this book, I quickly realized that for those readers who have been following economic news from Russia, the book would not say anything new but for those who know nothing about the economic component of Putin's rule, the book would not be focused enough.

The book begins with the era of Yeltsin's rule, i.e., bail auctions and so on. On the one hand, Putinism is a logical continuation of Yeltsin's reign, but, on the other hand, this greatly defocuses the reader's attention because Yeltsin's reign and Putin's reign, despite the strong interconnection, are still two different reigns. If the author decided to write a book about the economic system that Putin built, he should have written only about Putin and not started with such details as bail auctions. The reader simply won't remember where the book started and how it relates to Putin. And the bail auctions are important in the context of politics because they had a strong impact on politics and only to a lesser extent on the economy.

Further, the author pays much attention to the political squabbles with oligarchs, the Yukos affair, etc. On the one hand, these are important milestones of Putin's rule, but on the other hand, Putin could not have organized any Yukos case but limited himself to expelling all businessmen he did not like. The outcome would have been exactly the same anyway, i.e., the denationalization of the largest raw material enterprises.

Of course, if we describe Putin's economy, we cannot do without its main component - the oil and gas industry. The author writes everything correctly, but since I have known about it, i.e., about the oil and gas needle on which the Russian economy is sitting, for a long time, and it is no secret even for foreigners, it was very boring for me to read about what I already know. Everyone writes about it, including foreigners, when it comes to Russia and the reasons for the rise of the Russian economy under Putin. The author also accurately points out the importance for Putin's system of timely payment of pensions and other social benefits and salaries to people under state care (doctors, teachers, military, police, etc.). It is a pity that the author does not go deeper into this topic.

In the end, the book was somehow not memorable at all. Many pieces of text are very, very boring. I find it much more interesting to listen to economic analysts than to read about the same thing in a newspaper like Vedomosti or books like this one. Let's add to this an extremely unfortunate selection of topics. Although the author positions his book as a study of Putin's economy, the book consists of 60% descriptions of political events that can be read about in hundreds of books on "Russia under Putin." That is why the book turned out to be boring. I want to say that one gets the feeling that the author, because of the lack of information about Putin's economy, decided to add political events of that period instead. The result is neither a good book on economics nor one on the political events of the period. Although, if we take into account that the book will be read by foreigners, it is probably the best of what is available. After all, they may not have access to the English-language interviews of Sergei Aleksashenko or Sergei Guriev, which describe the economic component of Putin's rule very well.

In short, those foreigners who want to understand what kind of economic model Putin has built are better off looking for something else, more focused on economics and less on politics, which means that they should study or already know in advance what the political era of Yeltsin, the bail auctions, the Yukos affair, and the political changes that have taken place under Putin are all about. Then, focusing only on the economy, it will become clear how Putin built the economic system that allowed him to manipulate the Russian population for so long and so successfully. This book answers that question, but not in the best way and not in much detail.

[Cold · Rating 5 out of 5]

Relentlessly insightful book that outlines a useful mental-model of Russia.

Miller focuses relentlessly on Russian fiscal and monetary power, with the domestic and foreign policies as side-issues. It begins with the formative 90s in which Russia was rocked by inflation, debt crises and the demands of foreign creditors. Given the lack of personal wealth in the Soviet union, many Russians rely on pension payments. These lost value due to inflation and the inability to fund payments via taxes. This was the world that Putin ascended in, and provides the baseline upon which his regime is evaluated.

Since then Putin has prioritised financial stability and pension payments much more than Western peers. This largely came at the cost of education, health and R&D investments. This has broadly been successful, especially the last 10 years. Russia has paid down much of its debt, stabilised the currency, reduced unemployment, and it has consistently paid out pensions. When compared to the 90s, this is why Putin receives broad support from older Russians.

There are many interesting side-stories about specific industries. Initially, Gazprom had a mandate to provide cheap gas to the domestic market and it would be largely relieved of taxes as a result. Over time, the mandate shifted to selling gas internationally and the central state taxing the proceeds. More generally, the 90s onward saw the central Russian state's fiscal reach grow and grow, whereas in the 90s localities would shield local entities from paying tax to central authorities. There is a similar story for oil and other raw materials. Generally, this does clash with the typical view of oligarchs enriching themselves in pure corruption, instead oligarchs enrich the central state, which controls hand-outs to pensioners

However, as much as this seems a triumph of Putin's Russia, a good chunk of the success goes down to rising oil prices after the 90s. Similarly, the mineral wealth has largely been squandered without materially modernising the economy. Miller discusses the need for more educated managers in order to improve productivity and with it wages. This is arguably where the Western states succeeded, who accepted that national debt should fund higher education.

There are still areas that were not covered like foreign policy. I also expected more attention paid to the labour market in terms of demographics and foreign workers. Similarly, I'd have loved to read about the effects of brain drain to the West.

[Viktor Jakobsson · Rating 5 out of 5]

I had little knowledge about the situation in Russia between Soviet and Putin. This was a interesting book to understand what Putin has done and how he did it.

If you are interested in a quite remarkable period in the history of Russia this is a great book.

[Fearless Leader · Rating 4 out of 5]

It is clear after reading this book that Putin is an excellent statesman. His policies, and perhaps more importantly his ministerial appointments, saved Russia from total collapse and American subjugation.

Putin’s economic strategy is as follows:
(1) Formalize the economy by lowering taxes thus encourage the oligarchs to pay them.
(2) Keep the oligarchs in check through fear but never too much to scare them (and their money) out of the country.
(3) Improve the efficiency of state owned industries by carefully adjusting regulations and taxation to increase competitive pressure on them while at the same time partially renationalizing industries that where largely privatized in order to decrease the power of the oligarchy in certain sectors.
(4) Save for rainy days with a large oil funded stabilization fund.
(5) Pay off all foreign currency debt (except for when debt was at exceptionally low interest rates).
(6) Prevent the establishment of a welfare state (except for the preexisting pension system) therefore limiting dependence on foreign creditors.

Considering Russia’s tenuous position when it defaulted on its debt in 1998 Putin could not have realistically done better than he did in rejuvenating Russia after its decade of chaos following the collapse of the Soviet Union. Since the publication of this book in 2018 Russia’s external economic position has no doubt worsened do to even more drastic declines in raw material (especially oil and gas) exports since the beginning of the coronavirus crisis. If Putin ministers did not implement the conservative financial policies they did Russia would not have survived this crisis.

Also, the tone of this book is impartial (if a little dry), which is all you can ask for in a book about Russia.

[Richard Thompson · Rating 3 out of 5]

This book has an interesting take on Mr. Putin, who most of us in the United States today see as a corrupt tyrant bent on military conquest as the jewel in his crown of power. Mr. Miller acknowledges that Mr. Putin's primary purpose is reinforcing his own power, and that there is a huge amount of corruption that is permitted and even encouraged in the service of his power, but he also points out that for the first decade of Mr. Putin's rule, he followed rational and successful economic policies that helped turn around an economy that was deeply in the toilet after years of mismanagment under Gorbachev and Yeltsin. Under Putin, at least in the period leading up to the 2008 financial crisis, incomes rose dramatically, pensions were protected, and there was strong GDP growth. He balanced budgets and put some outer bounds on the levels of permitted corruption. He created a sense of stability and growth in which investors could plan for the future. But Mr. Miller also tells us that by the middle of the last decade, Mr. Putin had nothing left in his bag of tricks and was no longer able to rely on oil and other familiar mainstays to drive further growth. Plus he had problems with a recalcitrant Ukraine which was forging ever closer economic ties with the west. This book ends before the current war in the Ukraine started, but it certainly sets the stage for the war with a Putin who needed to wag the dog and had reasons to want to punish Ukraine that went beyond a cockeyed patriotic desire to bring the cradle of Russian civilization back into Russia's political ambit.

[Allen Edwards · Rating 4 out of 5]

Interesting, book gives interesting insight into how Russia was able to recover from the economic wilderness & crashes of the 1990s, some of their economic ideas paid off, such as, prioritising foreign debt payments, not overspending domestically, generating budget surplus, building up a government savings fund which was able to benefit Russia during the 2008-10 world wide credit crunch, where as western economies were hit hard.

Book also explains low tax amongst the business elite, many whom have political friends, the extremely high levels of corruption, embezzlement, fraud hold Russia back massively, as well as the government's unwillingness to invest more in its education, healthcare, and infrastructure outside of Moscow & St Petersburg. Also how the country is so dependent on oil, the interest to move elsewhere holds the country back too.

Being someone who has interest in Russia myself, this highlights how the country has so much potential to be the richest nation in the world, for instance it's oil, gas & other natural resources, it's credible rocket & space technology. Sad thing is Russia can do, ie host Winter Olympics, FIFA world cup, Grant Prix, invest in its country when it wants to, but doesn't do so enough!

[Dennis Murphy · Rating 4 out of 5]

Putinomics: Power and Money in Resurgent Russia by Chris Miller is a capable overview of Russian economic policy under Vladimir Putin. It is not profound, but its not meant to be. This is a book you read in order to learn about Russia's transition to Oligarchs and how they fit into Russia's economic system. You see the weaponization of corruption inquiries, Putin's strong emphasis on pension policy, its reliance upon oil, and other details given some breadth and explanation. It was interesting to note that Russia's inflation had little effect on Russia's exports-driven policy. It closes with a discussion of growing tensions with the West over Russian expansionism and Western sanctions, and closes with the author's views on whether Putinomics will last.

I would highly encourage you to read Pomeranstev's work on Russia in conjunction with, or instead of, this book to get a feel for modern day Russia, though that is more broad and cultural in its aim.

Give it a read if you have time, and you're into the economics and finance side of foreign policy.

86/100

[Tom Schulte · Rating 4 out of 5]

Basically an economic history of the Yeltsin to Putin Russia, this is largely dry like a textbook and the lackluster narration does not help. Still, it is a clear and detailed description of the rise of the oligarchs, fragilities of an economy where Russia is basically a gas station with an army. The militaristic foreign policy continually hampers growth from engendering sanctions to causing such as expensive boondoggles as annexation of Crimea with its bridge or the image burnishing Sochi 2014 Winter Olympics. Sochi is one example of extensive loss of wealth through corruption.

The author summarizes Putin's post-Soviet approach as
1) Consolidate power
2) Enforce social order
3) Profit

One interesting things to me is the focus on maintaining allegiance through increasing and protecting pensions. This focus on older citizens suggests to me Putin's base may contain a demographical weakness.

[Mateo Jaramillo · Rating 4 out of 5]

The first half reads like Atlas Shrugged without any of the sex. All talk about tariffs and nationalizing the copper mine :) The second half, starting in 2008, is extremely interesting and should be read by anyone interested in learning more about why Russia is economically interested in recapturing countries like Georgia and Ukraine as well as maintaining political pressure in Belarus and Kazakhstan. I am not well-versed in economic theory, but the book is still comprehendible to the layman.

My previous point from "The Road to Unfreedom" about how I didn't believe that Putin believed he was fulfilling some mystic prophecy in reunifying the Soviet Union is questionable now, sadly. But if you're still hoping that Putin has some rationale that can be beaten or negotiated with, this is a good book for understanding his economic motivations.

[Strong Extraordinary Dreams · Rating 3 out of 5]

A good starting overview of Russian economic policy over the last 20 years. If one wanted to learn more, this would be a good book to read first.

Could have more about these policies' effects (on people, trade levels, output) and their details (what really happened as a result). We get it: The state comes first, immediately afterward comes stable economic growth. OK, good - some other countries could follow this example. Still, I would have liked more discussion about the everyday changes. But that's just me.

In summary: A pretty damn good version of what it sets out to be, this book. If I had written it, it would have been different.

[Vansh · Rating 3 out of 5]

Reading Deng Xiaoping’s biography was a good look into how autocracy functions and how it interacts with commerce. This book however was a good look in how to actually control the masses. Deng actually wanted growth, Putin wanted growth to a point followed by control (not sure but I’d say Xi Jin Ping also falls in that house).

Overall a good read in how Putin interacts with the economy though less so for how he thinks about the world in general. Not much to say here, this book discusses Putin’s approach to econ which is what we get.

[Steven Bragg · Rating 4 out of 5]

The author does a good job of clarifying the essential principles under which the Russian economy has been governed under Putin, as well as how external factors have influenced the economy over time. In short, there was some intelligent work in the early 2000s to improve the economy, but now the self-imposed restrictions of the government make it much less likely that Russia can return to the growth it experienced a decade ago.

[Jude · Rating 5 out of 5]

An outstanding, comprehensive breakdown of the economic conditions that caused the Soviet Union to collapse, as well as how Vladimir Putin has contended with these issues. This book sheds light under the hood of Russian monetary and fiscal policy and the intersection between the visceral memories of Soviet Union's centrally planned economy and Russia's current policies. This is a fascinating book to read, especially now.

[Umar Lee · Rating 4 out of 5]

A good history on the post-Soviet Russian economy, the role of Vladimir Putin in creating a stronger economy after the chaos of the 1990's, and the basic principles underpinning the modern Russian economy. Corruption, bureaucracy, inefficiency, oligarchs, and measures to compete with European competitors are key themes. As a bonus you get to read about Putin pilfering a vodka filled glass replica of a kalashnikov.

[Masha · Rating 5 out of 5]

very clear history and synthesis

[Ilya Talman · Rating 5 out of 5]

Great explanation of how Putin's Russian economy functions. How does the high level of government corruption coexist with efficient private businesses.

[Justin Reynolds]

Chris is very thoughtful so it is no surprise he has produced a very accessible book on Russian economic history over the last 20 years.

[Ramiro Breitbach · Rating 4 out of 5]

Interesting, but not much new info (to me, at least)

[Sarah · Rating 4 out of 5]

This is DRY AS A BONE, but highly informative. Worth it for a refresher on the Ukraine Russia situation.

[FMLDNR · Rating 5 out of 5]

very informative

[Brian Thorson · Rating 4 out of 5]

Quite good. This book explains many of the financial decisions Russia has made over the years. Hopefully it is updated soon.

[Alice · Rating 4 out of 5]

Nice overview of Russia’s recent economic history.

[Ada Dong · Rating 4 out of 5]

A great overview of Russian economic reformation and its recent central bank decision linked to government and country’s export of commodities.

[George Crofts · Rating 5 out of 5]

Vladimir Putin has been surprisingly effective in managing the Soviet economy since he came to power. This is because his basic rule is every economic decision must forward his political goals.

[Martin Kraft]

Fine overview of the economic development of Russia under Putin. Obviously dated before the invasion of Ukraine.

[Nate Campbell · Rating 3 out of 5]

Good book detailing the challenges of the Rusian economy after the fall of communism. Putin has actually done a fairly good job, even though he is a corrupt autocrat.