The End of Brand Putin?

One does not have to meet Vladimir Putin up close and in person to realize that he has long since lost the advantage he once had in his former identity of the “Outsider.”

He used to cast himself as the pragmatic man who could stand on the periphery and judge events in Russia with a critical eye. Putin is now the ultimate insider, sitting inside the Kremlin, in a system of his own creation. His interests are very much vested.

Although he seems not to recognize it, Putin is now the defender of an old order that many see as rotten at the core.

If the Russian state is to survive in anything close to its current form, the system created by Putin needs to change and open up. It also needs to become more flexible — just as the old Soviet order needed to do in the 1980s and at other junctures in Russia’s long and complex history.

Putin’s main weakness stems from the fact that he cannot simultaneously be the Outsider, KGB Case Officer, as well as the CEO of Russia, Inc. — and also the leader of a modern nation. He faces a choice that we are not sure he is equipped to handle.

Here is why: When Putin first became Russian president, he had no prior experience of being in a public role with such enormous, direct responsibility. He was always a Number 2 man in St. Petersburg. He was never Number 1.

In 2000, when Putin was selected as acting president and anointed as Boris Yeltsin’s successor, the resources of the Kremlin were deployed in full force to secure his formal election. He did not campaign for the position himself.

Although his identities combined to put him in a position to be selected by Yeltsin’s team, nothing in Putin’s history and identities especially suited him for his new role.

As the Outsider in St. Petersburg and in Moscow, he stood apart, observed and commented. At best, he offered advice. As the “Case Officer,” during his KGB career, he was the “quiet Chekist” in the background who manipulated people.

He came initially to Moscow to do the same — to work as a Number 2 behind the scenes and to manipulate the oligarchs. As the CEO of Russia, Inc., the system he has created since 2000, Putin has operated in the closed boardroom of a privately held corporation.

He has neither been the executive of a transparent public corporation nor even fully the head of the Russian state. He has felt no need to disclose anything to the shareholders and broader stakeholders. He has felt no need to explain himself or his actions to the Russian population.

Quite surprisingly, Putin has not built a truly strong state. In large part, this is because the version of the corporation he runs parallel to the state, as the CEO of Russia, Inc., is too personalized. He constantly intrudes on and interferes with the work of the state.

People with personal connections to Putin and his inner circle, as well as others who have been given positions of power in the system or in the state apparatus, often do not use their positions in the service of the state or society. They abuse their authority in ways that have been well documented inside and outside Russia.

Putin’s faith in free markets came only from his reading of history, not from personal experience. He knows that the free market economy is superior to a centrally planned economy. But he does not really know or fully understand why and how it is superior.

As a result, he controls Russia’s top businessmen, the oligarchs, through a protection racket. He manipulates, blackmails and constrains them.

Putin’s insistence that he be allowed to run Russia solely the way he needs and wants precludes meeting the population’s demands for an end to abuse and privilege. His system does not merely permit those ills. It depends on them.

It depends on cronyism, corruption, and abuse of privilege. Putin’s system truly is a “gang of swindlers and thieves” — a widely used moniker, first given to the United Russia party by a prominent Russian opposition figure. That is not a side effect of the system Putin has created. It is essential to the system’s operation.

This is how Putin controls the people who help him run the system. People at the center are swindlers and thieves because Putin’s protection mechanism requires that they be swindlers and thieves to keep them in check and remind them of the ruin they face if they try to cash out.

The good tsar

For all these reasons, Putin’s most important asset — his public image — has eroded. He is no longer seen in the image of the good tsar.

The good tsar in Russian history and mythology was (and is) the one who could correct the abuses that might have occurred without his knowledge — once they were brought to his attention. “If only the tsar knew what was happening to us, he would put an end to it” was the traditional Russian peasants’ self-delusion.

In the 2012 presidential campaign, Putin argued that a Russia without him at the helm would be unstable and unpredictable. He is right in the sense that only he can maintain the balance in contemporary Russian politics because he, personally, created the hooks and levers that compromise the central players and keep them in place.

Putin has ruled in the name of unity, of a united Russia. But the unity he has created is superficial and fragile.

Putin did not solve the unresolved issues of the Russian and Soviet past that surfaced in the 1980s and 1990s. He merely suppressed them and papered them over with a pastiche of recycled Russian ideas.

Politically, the responsibility for the Soviet Union’s past crimes was ignored. Economically, the structural legacy of the Soviet system — with its factory monotowns in far-flung places — was left unchallenged.

By building up reserves during a time of unprecedented oil prices, and making deals with oligarchs and foreign investors, Putin squeezed more out of everything he inherited.

If Putin does not find a way to open up his system, Russia cannot make the transition to a modern, economically competitive, democratic society without large disruptions. He will need to be less of a pseudo-CEO and Mafia don and much more of a true statesman to give the Russian people the helping hand they need and deserve.

Russia’s new urban middle classes and other protesters called for evolutionary change on Moscow’s streets. But by so thoroughly refusing to engage the protesters as he did, Putin in effect announced: I will not permit the evolutionary change of this regime.

Putin’s approach after December 2011 was to defend a system that is rotting through over-personalization by making it even more personalized. “It’s me or the abyss. There is no one else” — the classic argument of would-be autocrats everywhere and throughout all periods of history as they seek to head off their inevitable demise.

Putin is playing chicken with Russia. He is daring the population to call his bluff. The tougher things get, the more he insists that he personally is the only answer. He leaves no choice to the protesters but to capitulate to his blackmail or to plunge forward with revolutionary regime change.

Editor’s note: This article is adapted from Mr. Putin: Operative in the Kremlin (Brookings) by Fiona Hill and Clifford G. Gaddy. Published by arrangement with the authors. Copyright © 2013 by Brookings Institution Press.