Soviet Russia and Global Wealth Today: Shock, Shares, and the Power Vertical... An Oligarch’s Throughline

 Picture a country that swears it abolished privilege... then watch a black ZIS sedan nose past the bread line to a door discreetly labeled “No Queue Today.” That was Stalin’s miracle. Officially, history was marching toward classless utopia. Unofficially, there was a VIP entrance. The ticket wasn’t money... it was loyalty.

Here’s the trick. Ideology did the talking, but loyalty did the hiring. Sing the right hymn, flatter the right boss, produce the right “success,” and up you go... bigger flat, a dacha with decent plumbing, a clinic where the penicillin actually worked, and shops stocked from a parallel universe. There was a name for this club... the nomenklatura (the Party’s appointment list... the people who got promoted, housed, and fed first).

Then the handover parade. Nikita Khrushchev (led the USSR 1953–64) inherits the machine and turns the volume down. Fewer midnight knocks, more bluster and policy zigzags. The perks stay. Leonid Brezhnev (1964–82) presses pause. The system hardens like cooling asphalt. Nobody risks change because change threatens privilege. Stability... with mothballs. Performance becomes theater. Statistics improve because pencils are easier to sharpen than factories.

And when the numbers lie long enough, reality files a complaint. Yuri Andropov (1982–84)... former KGB chief... spots the rot, launches a short, stern cleanup, then dies mid-operation. Konstantin Chernenko (1984–85) barely reaches the operating room. Then Mikhail Gorbachev (1985–91) pulls a loose thread... perestroika and glasnost... and the sweater begins to run. The moment people can say the plan doesn’t match the pantry, the magic trick fails. Slogans revert to what they often were... public relations for private control.

Now for the costume change. The red banners come down in 1991 and you might think the loyalty machine goes with them. It doesn’t. The gatekeepers become auctioneers. State assets don’t drift... they sprint... into private hands already holding the keys to locked doors. Yesterday’s party boss is today’s “entrepreneur.” The currency changes from favors to shares, from access to equity, but the logic stays put. Loyalty still outranks competence. Only now the dacha comes with a yacht.

Enter Boris Yeltsin (first president of the Russian Federation, 1991–99), speaking fluent democracy on TV and fluent survival backstage. Crisis meets a recipe critics later called the shock doctrine... reform by shock. Liberalize prices quickly, privatize faster, and let “the market” sort it out while savings evaporate, pensions snap, and inequality explodes. Theory says pain now, efficiency later. Practice looks like a fire sale in a building with the alarms ripped out.

Privatization plays in two acts. Act one... vouchers. Paper claims for pieces of giant firms handed to citizens. Many, confused or desperate, sell them for cash. Act two... loans for shares (1995–96). A handful of insider bankers lend the state money and take the crown jewels as collateral... oil, gas, metals. The collateral, funnily enough, stays put. Voilà... the first generation of post-Soviet oligarchs (not just “rich people,” but people whose wealth depends on political proximity).

Yeltsin needs their media and money to win in 1996. They need his signature to keep what they “bought.” Meanwhile, the old guard doesn’t vanish. “Red directors” slide from ministries into boardrooms. The security services keep their address books warm. The ruling class doesn’t move out. It changes the locks.

Then 1998 crashes the party. The ruble collapses. The miracle looks like leverage in fancy dress. Yeltsin, unwell and unpopular, seeks a successor who will protect his family and the settlements of the 90s. He finds a tidy ex-KGB officer who can read a room... Vladimir Putin (president 2000–08, prime minister 2008–12, president again 2012–present).

Here the system returns to type. Putin offers what the 90s never did: rules... of a sort. Keep your billions if you keep your head down. Try to run politics from your TV station and the tax police rediscover their reading glasses. A few spectacular prosecutions in the early 2000s send the message. Many oligarchs make peace. A new composite elite appears... the siloviki (power-holders with security-service roots). Wealth and force fuse. The power vertical (a centralized chain of command from Kremlin to regions) is rebuilt.

Add a commodity boom and the engine hums. Wages rise, pensions steady, national pride gets a glossy coat. State champions... Gazprom, Rosneft, Rostec... double as economic engines and political instruments. This isn’t a return to Stalin. It’s a return to the deeper wiring... control the choke points, reward loyalty over competence, wrap it in a story people will accept.

Watch the stories. Under Stalin, the banner says equality while the VIP queue forms round back. Under Yeltsin, the banner says freedom while backstage auctions choose tomorrow’s billionaires. Under Putin, the banner says sovereignty and stability while the state decides which fortunes are safe... and which become “patriotic donations.” Different scripts, same stagecraft.

Is “oligarchy” just a Russian thing? No. It isn’t a party or an ideology. It’s a shape. You see it whenever three pieces click together:

  1. A grand story that flatters the system... classless equality, the invisible hand, national greatness, “disruption.”

  2. A choke point a few people control... licenses, contracts, pipelines, frequencies, credit, data, land, eyeballs.

  3. A loyalty test that beats any performance test... you advance by serving gatekeepers more than the public.

Give that triangle time and the same physics emerges. Information bends around the powerful. Numbers tell happy stories. Failure never finds its owner. Life at the top gets very comfortable in a country repeatedly told it is doing even better than the top. The ideology is wallpaper. The wiring behind the wall is loyalty.

Now connect the dots with a quick hopscotch. Stalin’s court with tractors trains a generation to value access over truth. That generation staffs the ministries that design privatization. Those ministries pick the bankers who “rescue” the state. Those bankers own the TV that rescues Yeltsin. Yeltsin elevates a security professional to guard the settlement. The security state re-teaches the lesson the nomenklatura never forgot... wealth is conditional. Add oil money and the whole thing sings in tune.

And the uncomfortable punchline. Systems that reward loyalty over competence feel terrific... for a while. They look united. They set records on paper. Then reality knocks. Bridges need maintenance. Wars need logistics. Pandemics need truth. If you’ve trained your machine to punish truth-tellers and promote loyal fabulists, reality will send an invoice... with interest.

So, today’s oligarchs are often yesterday’s gatekeepers in new outfits... Party pins swapped for cufflinks, slogans swapped for brands, but the same VIP door. The throughline from Yeltsin to Putin isn’t communism turning into capitalism. It’s the habit of governing by controlled access surviving the costume change. A modernized oligarchy that speaks the language of markets, hires the lawyers of globalization, and still runs on the old battery... loyalty first.

How to use this without getting lost in labels:

  • Nomenklatura... the Party’s curated list of people to be promoted and privileged.

  • Shock doctrine... pushing radical market reforms during crisis, when resistance is weakest.

  • Loans for shares... mid-90s deals handing strategic firms to insiders for “loans” that never really returned the assets.

  • Oligarch... wealth secured by proximity to power. Remove the proximity, watch the wealth shrink.

  • Siloviki... “men of force,” elites with security-service roots who bridge politics, policing, and business.

  • Power vertical... a top-down command structure that recenters authority in the Kremlin.

Finally, a field test for students. When you hear “we abolished class”... look for the special store with imported oranges. When you hear “we liberated the market”... find the auction where only six bidders were told the time. When you hear “we made the nation great again”... check the friends who keep winning the tenders. When you hear “we disrupted the industry”... measure the data moat only one platform can cross.

History’s advice is quiet but persistent: any society can build a VIP door while telling itself there isn’t one. Your job is to notice the door... and who keeps holding it.

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