Will plummeting oil prices succeed in reining in Vladimir Putin’s aggressive foreign policy where Western diplomacy and economic sanctions have so far failed? Might the shock to Russia’s oil-exporting economy be so great as to destabilize Putin’s regime itself?
“It is not clear,” writes Martin Feldstein, the eminent Harvard economist, whether Putin’s regime (or similar ones in Iran and Venezuela) “could survive a substantial and sustained future decline in oil prices.”
It depends on who has the more accurate view of authoritarian power dynamics: Yegor Gaidar or Emmanuel Goldstein.
Gaidar, who died five years ago, is best known as an economist, a senior official in Boris Yeltsin’s post-Soviet Russian government and a promoter of the thesis that the Soviet Union collapsed largely because of a sharp drop in oil prices, brought about by Saudi Arabia’s decision in September 1985 to increase production.
The Saudi move, which Gaidar portrayed as a deliberate attempt to loosen Moscow’s grip on what was then a Cold War battlefield in Afghanistan, cost the Soviets approximately $20 billion a year, “money without which the country simply could not survive,” as he put it in a 2007 essay.
Desperate for cash — but unable to borrow from the West and incapable of reforming the Soviet economy rapidly through his program of perestroika — then-Soviet leader Mikhail Gorbachev found himself with no option but “to begin immediate negotiations [with the West] about the conditions of surrender,” according to Gaidar.
Gaidar warned Russia’s post-Soviet rulers that “the collapse of the Soviet Union should serve as a lesson to those who construct policy based on the assumption that oil prices will remain perpetually high.” And one of those lessons was that “authoritarian regimes, although displaying a facade of strength, are fragile in crisis.”
Putin, of course, lived through the Soviet collapse as a bitterly disappointed KGB officer stationed in East Germany, and he drew his own conclusions from it. One result is that his regime prudently put some oil revenue in a reserve fund. Putin also learned, though, that the Soviet collapse was, in his words, “a geopolitical catastrophe” — one that not only had economic causes but also reflected the fecklessness of the U.S.S.R.’s leaders, “who just threw everything away and left,” as he once put it.
Or so one would conclude from his recent defiant behavior, which includes dipping into his nation’s cash reserves, allowing the ruble to float, implying that Russia is a victim of a new geopolitical conspiracy and cracking down on any hint of domestic political dissent — but not retreating from Ukraine or renouncing his plan for a neo-Soviet Eurasian Economic Union.
Which brings us to Emmanuel Goldstein, who was not an actual political analyst but rather a character in George Orwell’s “1984.” In the novel, Goldstein’s secretly circulated book, “The Theory and Practice of Oligarchical Collectivism,” fictionalized what was undoubtedly Orwell’s own view about a repressive system’s true sources of vulnerability — and survival.
“There are only four ways in which a ruling group can fall from power,” Goldstein writes: It can be conquered from outside; it can govern so inefficiently that it stirs mass revolt; it can incubate a discontented middle class; or the ruling group itself “loses its own self-confidence and willingness to govern.”
All four factors played a part in the collapse of the great regimes and empires of history, Goldstein observed; certainly all four contributed, directly or indirectly, to the Soviet Union’s downfall a half-century after the publication of “1984.”
Yet in Goldstein’s schema nothing was more important than the will of the dictatorship to cling to power by any means necessary, which could trump all other threats to regime survival: “Ultimately the determining factor is the mental attitude of the ruling class itself.”
Certainly the differing fates of the Soviet Union and Communist China in 1989 suggest that Goldstein had a point. Whereas Gorbachev attempted to take the Soviet Union on a tactical retreat that turned into a rout, the Chinese ruthlessly gunned down hundreds at Tiananmen Square and remained in control. The same goes for smaller regimes, such as those in North Korea, Cuba and Zimbabwe, whose Cold War-vintage rulers have weathered historic economic crises and held on to power far longer than many once predicted.
In authoritarian politics, as in life, attitude is everything, or almost everything. Those who hope that falling oil prices, or Western sanctions, or a combination of the two, will force a change of course in Moscow — much less a change of regime — must reckon with the fact that Putin has seen that scenario once already, in Gorbachev’s time. And he seems determined that the sequel, if any, will end differently.