Today Russians are set to head to the polls for their country’s presidential election over three days – with only one expected outcome. Incumbent President Vladimir Putin will win comfortably. The Russian president is elected by direct popular vote. If no candidate receives over 50% of the vote, then a second round is held between the two most popular candidates three weeks later. It’s the first time that multi-day voting has been used in a Russian presidential election, as well as the first allowing voters to cast ballots online.
There is no serious opposition candidate that can win. In the 2018 presidential vote, the Communist party runner-up Pavel Grudinin secured 11.8% of the vote, compared to Putin’s 76.7%. This time Nikolai Kharitonov of the Communist Party, Leonid Slutsky of the nationalist Liberal Democratic Party, and Vladislav Davankov of the New People Party are on the ballot paper. But all these candidates broadly support Putin’s policies, including the invasion of Ukraine. The vast majority of independent Russian media outlets have been banned and anyone found guilty of spreading what the government deems to be “deliberately false information” can be imprisoned for up to 15 years.
Putin is going to win not just because he has decimated any serious opposition forces, but because Russia’s invasion of Ukraine seems to have at least resigned support among Russian people, even if Russian lives are being lost. The main reason for that is because, contrary to the hopes and expectations of Western analysts, the Russian economy has not collapsed and Russian forces now seem to have the upper hand inside Ukraine.
Russia’s war economy is holding up. Wages have soared by double digits, the rouble is relatively stable and poverty and unemployment are at record lows. For the country’s lowest earners, salaries over the last three quarters have risen faster than for any other segment of society, clocking an annual growth rate of about 20%.
The government is spending massively on social support for families, pension increases, mortgage subsidies and compensation for the relatives of those serving in the military.
The war in Ukraine has intensified an acute labour shortage as military recruitment draws workers out of the market and with half a million Russians fleeing the country. Putin said last month that employers had a deficit of 2.5 million people. That has benefited those Russian workers not in the armed forces with security of employment as managers are reluctant to let anyone go. The unemployment rate remains at a historic low and hiring expectations have soared to a record level.
However, inflation has picked up; accelerating in February to 7.7% yoy. It’s just that wages are rising faster. Average monthly wages in 2023 reached more than 74,000 rubles ($814), about 30% higher than two years ago. Before last year, Russia had not seen an increase in real disposable income of more than 5% for many years.
And Russia’s war economy is not plunging, but growing. The IMF forecasts real GDP growth in 2024 of 2.6%, outpacing the G7.
Over the past two years of war, Russia has managed to steer through sanctions, while investing nearly a third of its budget in defence spending. It’s also been able to increase trade with China and sell its oil to new markets, in part by using a shadow fleet of tankers to skirt the price cap that Western countries had hoped would reduce the country’s war chest. Half of its oil and petroleum was exported to China in 2023. And it became China’s top oil supplier in 2023, according to Chinese customs data. Chinese imports into Russia have jumped more than 60% since the start of war, as the country has been able to supply Russia with a steady stream of goods including cars and electronic devices, filling the gap of lost Western goods imports. Trade between Russia and China hit $240 billion in 2023, an increase of over 64% since 2021, before the war.
Contrary to Western forecasts, Russian industry has grown due to war-related production, while demand for domestic manufactures has also increased due to a fall in imports because of sanctions. The automobile industry – which was hit hard initially, as Western and Japanese car manufacturers left Russia en-masse – has been recovering strongly month by month, as Chinese companies have stepped in.
The level of capacity utilisation in the Russian economy has been generally rising and, according to various surveys, now stands at historically very high levels.
A war economy means that the state intervenes and even overrides the decision-making of the capitalist sector for the national war effort. State investment replaces private investment. Ironically, in Russia’s case this has been accelerated by Western companies’ withdrawal from Russian markets and by the sanctions. The Russian state has taken over foreign entities and/or resold them to Russian capitalists committed to the war effort.
But Russia’s war economy will revert to capitalist accumulation when the war ends. The Russian finance ministry estimates that war-related fiscal stimulus in 2022-23 was equivalent to around 10 per cent of GDP. In that same period, war-related industrial output has risen 35%, while civilian production remained flat (until recently), according to research published by the Bank of Finland Institute for Emerging Economies.
Elevated social and war spending has also resulted in a yawning budget gap. The federal budget gap was 1.5 trillion rubles by the end of February, while the Finance Ministry has planned for a deficit of 1.6 trillion rubles for the whole of 2024 and Russia’s available wealth fund reserves have been already halved. After the election, Russian people can expect higher taxes, at least for higher earners.
And the Russian economy remains fundamentally natural resource linked. It relies on extraction rather than manufacturing. Mining accounted for around 26% of gross industrial production in July 2023, and three industries – extraction of crude petroleum and natural gas, coke and refined petroleum products manufacturing and basic metals manufacturing – made up more than 40% of the total. “The regime is resilient because it sits on an oil rig,” says Elina Ribakova, a non-resident senior fellow at the Peterson Institute for International Economics. “The Russian economy now is like a gas station that has started producing tanks.”
War production is basically unproductive for capital accumulation over the long run. And Russia’s potential real GDP growth is probably no more than 1.5% a year as growth is restricted by an ageing and shrinking population and low investment and productivity rates. The profitability of Russian productive capital before the war was very low.
The Russian war economy is well placed to continue the war for several years ahead if necessary, but when the war is over, Putin may face a significant slump in production and employment.
Michael Roberts Blog 
The only solution for these structural problems Russia has is to resovietize.
Putin has matured over his period in government on this subject: in his first mandates, he saw socialism as an outright failed social experiment and attributed all the success the Bolsheviks obtained to ideological fervor of the masses. He thought, until recently, that to replicate the success of the USSR in the RF was simply a case to substitute communism with orthodox christianity in the ideology slot of the Russian society and all would be well.
In my opinion, three factors forced Putin to kind of “change his mind” on this gross simplification of Soviet history:
By now, it has certainly dawned to Putin that, if he wants to make his reforms to survive and make Russia flourish, he has to go back to some form of socialism — probably market socialism, a la China. We can infer that from many of his recent speeches and interviews, specially those exclusively in Russian, made exclusively for domestic consumption.
The only reason I think he doesn’t speak about it openly is, to me, the greatest obstacle to Russia’s resovietization: the oligarchs. Those will have to be dealt with slowly and carefully, because they are the only force capable of bringing Russia down (apart from a nuclear fallout).
The Russian Federation still has one great advantage no other Third World country has: a recent socialist past. The Russian people doesn’t have to fantasize about how a socialist system would be if it was implanted in their country, nor how it could be implanted: they had it, they can read it in the history books and interview older people. The RF is the only country in the world where a communist revolution is possible through a simple coup d’etat and some administrative reforms. After that, the challenge would be to do it better, without the distortions of the first iteration.
This is wishful thinking, fanfiction, not good enough! Are you a mind reader? Putin’s best mate sharing intimate chats on his political thinking? You must be, given you’ve identified motives totally at odds with his public statements (anti-communism is still a core feature of his speeches), with no evidence provided.
No one can get everything wrong any more than they can get everything right. So, yes, the mindreading is not convincing argument.
It seems probable to me that the Russian people would want to treat Putin after victory in a people’s war the same way the people of the UK did Churchill. It’s not like they can expect anything but worse from the defeat of Russia. But market socialism a la China is not a widely agreed upon thing, that’s why every comment threat here that touches on that, even indirectly, is so contentious. The same in Russia. A state that expropriates the oligarchs is defined as dictatorship and all the Marxists are democrats, or so I’m told.
“A war economy means that the state intervenes and even overrides the decision-making of the capitalist sector for the national war effort. State investment replaces private investment. Ironically, in Russia’s case this has been accelerated by Western companies’ withdrawal from Russian markets and by the sanctions. The Russian state has taken over foreign entities and/or resold them to Russian capitalists committed to the war effort.”
As some regular commenters would have it, this represents a transition to socialism! Disturbing for presumably well read communists to make such an argument, given this is the case for any auto-centered capitalist economy engaged in a somewhat peer to peer major war. The world wars didn’t excatly herald a transition to socialism in the imperial core did they!
“But Russia’s war economy will revert to capitalist accumulation when the war ends.“
This hardly stops during war does it?
“War production is basically unproductive for capital accumulation over the long run.“
Depends on what you’re able to steal as a result of said production! Ukraine is one of the choicest prizes in the world in terms of its natural resources. And at a national scale it’s vital for actually existing capitalisms – accumulation cannot proceed without it: you’ll lose out to competitors or subordinate classes.
It is a transition to socialism in the sense that it will accelerate the destruction of the West and be beneficial to China. In the simplest, non-dialectic interpretation of the facts, capitalism is literally killing itself in a fratricide war in the Ukraine while China is gobbling up Russian market.
It’s funny because, during the Cold War, the intellectuals who were proactive and optimist on the traditional path to socialism were accused of being “deterministic”, “mechanicist” and, ultimately, part of a sect they called “vulgar Marxism”.
Now that Marxists in the West are able to see things much more nuanced, they are accused of being some kind of fringe far-leftist sect at best, outright Chinese/Russian propagandists at worst.
You’re all over the place.
Why call Russia’s defensive war with NATO an invasion of Ukraine?
Because they can, you Putin-loving Kremlin monkey. Once a bad Russian, always a bad Russian doncha know. One hundred years of anti-communism affects us all, even the alleged real revolutionaries, who, purer than the driven snow, have all the right answers or so I’m told.
I’m not “Putin-loving”. The time to act was in 2014 , during and after the US 5 billon Nuland fascist putch. ….But I do like monkeys!
Don’t be so hard on yourself
Because it serves as an excuse to defend* fascism in Ukraine and stand for the triumph of US imperialism while being morally superior to both sides. And all you have to do is commit to democracy and hold old boundaries** on maps as sacred (except when the democratic countries chop up Cyprus or Yugoslavia or Sudan or whatever…Transnistria and Kaliningrad are not to be treated as sacred boundaries I’m pretty sure.) It’s like nonbelievers who claim atheism is a religion.
*The fact that some people will believe what their (sic) government says is not new and needs no explanation. It’s the fact that people are enraged by others saying Kyiv is fascist. that needs explanation. They will accept no argument on this point as legitimate. That’s why they will not even concede that someone who thinks Kyiv is fascist should be opposed to Kyiv’s victory as a defeat for humanity.
**Crimea since the days of the tsar’s conquest was for many decades not held to be part of Ukraine, the borderlands, but part of New Russia (Novorossiya.) The sacred boundary was set by Khrushchev in 1954. Shortly before the USSR broke up, as I recall, there was a local plebiscite that called for Crimea to be part of the USSR as its own ASSR (autonomous soviet socialist republic.)
CREO QUE EL PACTO RUSIA CHINA ,CHINA RUASIA, ESTA TRABAJANDO A PLENO,NO SIGO POR QUE UD DR ,LO EXPLICA EXPLICITAMENTE.CREO QUE EUROPA PAGO LA GRAN GUERRA Y LA DEL 39/45 ,COMO EN CASO DE SEGUIR LOS LINEAMIENTO DE USA Y ALEMANIA PUEDE PAGAR LA GUERRA DE UCRANIA, EL SIGLO RECIEN COMIENZA,DICEN LOS QUE SABEN QUE LOS PRIMEROS AÑOS SON LOS MAS DIFICILES, ,,,,SE ESTAN FORMANDO DOS BLOQUES BIEN DEFINIDOS……RUSIA CHINA IRAN,INDIA, COREA DEL NORTE, ENTRE LOS PRINCIPALES DE UN LADO, DEL OTRO USA ALEMANIA,INGLATERRA ,AUSTRALIA CANADA ,EUROPA OCCIDENTAL….PARA CERRAN NO SE COMO EUROPA OCCIDENTAL , NO TIENE EN CUENTA QUE SIEMPRE PAGA LOS PLATOS ROTOS Y TERMINA SIEMPRE POR VARIOS AÑOS MAL PARADA ________________________________
Euroland is laughing at such economic failure.
The solution remains world revolution. There are no national paths out of capitalism. Soviet power was destroyed in the 1920s, the power of the party state arose out of its ashes, a form of capitalism where the bourgoisie operated through nationalised industry. It is this which was widely imitated in China etc.