POISONED BY OIL:

Frost at the core: Dmitry Medvedev and Vladimir Putin are presiding over a system that can no longer change (The Economist, 12/09/10)

According to Alexander Oslon, a sociologist who heads the Public Opinion Foundation in Moscow, Mr Putin’s rule ushered in a breed of “bureaucrat-entrepreneurs”. They are not as sharp, competitive or successful as the oligarchs of the 1990s, but they are just as possessed by “the spirit of money” in Mr Olson’s phrase, the ideology that has ruled Russia ever since communism collapsed. By the end of the 1990s the commanding heights of the economy had been largely privatised by the oligarchs, so the bureaucrat-entrepreneurs began to privatise an asset which was under-capitalised and weak: the Russian state.

Unlike businessmen of Mr Khodorkovsky’s type, who made their first money in the market, the bureaucrat-entrepreneurs have prospered by dividing up budget revenues and by racketeering. “Entrepreneurs” who hire or work for the security services or the police have done especially well, because they have the ultimate competitive advantage: a licence for violence.

No one worries about conflicts of interest; the notion does not exist. (Everyone remembers the special privileges given to party officials for serving the Soviet state.) As American diplomats are now revealed to have said, the line between most important businesses and government officials runs from blurry to non-existent. Putting Mr Khodorkovsky in jail, or awarding a large contract to one’s own affiliated company, could be justified as a public good. Indeed, more people were in favour of locking up Mr Khodorkovsky, even though they knew it would benefit only a few Kremlin bureaucrats.

In 1999 the oil price started to climb and petrodollars gushed into Russia, changing the mindset of the political class. Mr Oslon points out that the most frequently used word in Mr Putin’s state-of-the-nation address in 2002 was “reform” and its variants. A few years later the most frequently used word was “billion”. Divvying up those billions has become the main business in Russia. Corruption no longer meant breaking the rules of the game; it was the game.