Oligarchs, State & Disaster Capitalism

It's been said that the Soviet Union's economy was mere "state capitalism," rather than actual socialism. There's a version of our "bail-out" ("Rescue?" "TARP?")  going on in Russia where it's certain that the tax payer gov't. will be repaid every kopeck & a tidy profit. State & disaster capitalism at it's finest.

Mr. Putin, the former president and current prime minister, has long maintained that Russia made a colossal error in the 1990s by allowing its enormous reserves of oil, gas and other natural resources to fall into private hands. [...] Now, the Kremlin seems to be capitalizing on the economic crisis, exploiting the opportunity to establish more control over financially weakened industries that it has long coveted, particularly those in natural resources.

Last month, for example, the government assumed greater influence over Norilsk Nickel, the world’s biggest nickel producer, whose large shareholders, two billionaire oligarchs, have ailing finances. And Mr. Putin said Thursday that he was considering other such interventions.

Who said Ayn Rand is anti-statist?

At the forefront of these efforts is Mr. Sechin, 48, a deputy prime minister who has been a Putin confidant since the two served in the St. Petersburg city government in the early 1990s. Mr. Sechin almost never gives interviews or speaks publicly, but he is believed to spearhead the use of the secret services and other government arms to capture companies. “He is the state’s main raider,” said Olga Kryshtanovskaya, a prominent Kremlin expert at the Center for the Study of Elites in Moscow. “He organizes these raider seizures, sometimes to the benefit of the state, or sometimes to the benefit of companies that are friendly to him.” Mr. Sechin’s role in the Uralkali inquiry immediately caused analysts and investors to presume that the company was in peril. Uralkali’s stock, once highly prized by fund managers, has plunged more than 60 percent since the inquiry began, far more than the broader Russian stock market. That has caused steep losses for Mr. Rybolovlev, 42, a former medical student who is known as Russia’s fertilizer king because of his dominance of the business of mining potash, a principal fertilizer component. Last June, when Uralkali was soaring, the otherwise low-key Mr. Rybolovlev attracted attention by buying Donald J. Trump’s mansion in Palm Beach, Fla., for $95 million.

Sounds like an ideal Objectivist scenario.

With the financial crisis jolting economies around the world, Russia is hardly alone in taking ownership stakes in corporations these days. But many governments seem to view this as an uncomfortable role that has been thrust upon them. Russia’s rulers, however, appear to perceive the crisis as a chance to further expand their control over the economy, concentrating ever more power and wealth in the Kremlin. “We will put capital directly into major companies, in cases when it would be beneficial to the state and eventually to the taxpayer, and in those enterprises that are the basis of the economy of the Russian Federation,” Mr. Putin said in a television appearance on Thursday. “We do not exclude that these tools may be used in a large-scale way.”

Plus ça change, plus c'est...