Russia's population exceeded Qatar's by a factor of fifty, but the number of people who gained from oil and gas revenues in Russia was probably smaller than the total population of Qatar.
The Russian 1 percent
Studying post-Soviet Russia* sociologists described its society as being composed of a number of "estates,"10 drawing on an historical concept that belonged to the Russian Empire. By law, imperial society was divided up into unequal "estates," named after the French etats. The Imperial Code of Law prescribed different rights and duties for the gentry, the clergy, the urban- ites and the peasantry: some estates paid taxes, others did not; some served in the army, others did not; and only some estates could enter university. In force until 1861, this structure - different laws for different groups - was unfair but lawful.
In contrast to the old Imperial Code, the post-Soviet constitution of Russia proclaimed equality for everyone. Structural inequality in twenty-first-century Russia was unconstitutional. However, it was huge and growing. Put simply, there were the commoners and the elite, and they lived in different political economies. From Caucasian farmers to Siberian workers to St. Petersburg designers, commoners exchanged the products of their labor within the borders of the country. The elite took part in a different political economy, in which natural resources were exchanged for Western luxuries, services and weapons. The larger part of the population lived like Turks or Romanians, whose median incomes were similar to those of Russians; the smaller part lived like the Qataris or the Saudis. These segments of society barely noticed one another: the middle class that could have connected them turned out to be a missing link.
The Russian class "pyramid" was in fact shaped more like a pear, with an enormous and impoverished bottom, a narrow waist representing the middle class, and a tiny head consisting of a miniscule number of people with enormous quantities of money. In the developed OECD countries, the middle class comprised a majority (61 percent in 2019). In Russia, the middle class accounted for "somewhere between 15% and 40% depending on the methodology," but the studies leaned towards the lower estimate.11 Poverty was overwhelming. In 2022, more than one-fifth of Russia's citizens lived on less than ten dollars a day, and twenty-one million of them on less than two dollars. Although the state redistributed money across regions, classes and generations, it was never enough. Redistribution works better in economies that depend on labor, knowledge and capital; if you own oil, it is easy to forget about social justice. From Rockefeller to the Koch brothers to Putin, examples are plentiful.
In Russia's mining and extraction industries, salaries equaled 184 percent of the average wage; in finance, 220 percent. In the education and public health sectors, by contrast, wages were only 71 and 80 percent of the average.12 Spending and earning rubles, all these people took part in the national economy. The value of their rubles was supported by oil. But even without this source of external revenue, Russia's working people would have established some sort of economy. It was the Russian state that would have found itself with no money.
Before 2022, Russia had 83 billionaires {Forbes), and 269,000 millionaires (Credit Swisse). The real number of the rich and powerful in Russia was somewhere between these two figures - just a few tens of thousands. We know very little about them. Among other privileges, they were free to shun public attention in any form - to decline interview requests, avoid sociological polls and evade tax inspectors. The lion's share of industrial assets and farmland was given to Soviet-era managers and administrators - exactly those people who had brought the country to the point of collapse in 1991. The leadership saw this way of privatization as the way to civil peace and market competition. If the most sought-after assets in Russia had been auto-makers or chip producers, privatization might have improved the economy. But the most coveted properties were oil fields, gas pipelines and metal-makers. They were desired precisely because their products were not subject to competition within or outside the country. Global prices for oil and metals were booming. Petrodollars began flooding into Russia. Several decades of scarcity ended with the Fat Years, as the 2000s came to be known in popular memory. From this point onwards, the government was able to buy everything and anyone. The increasingly well-funded state-owned propaganda machine attributed the country's successes to its leadership and its failures to foreign forces.
Given all the reforms that took place after 1991, the overlap between the late Soviet and the post-Soviet cadres was stunning. In 2003, the number of military and security officers in the Russian elite was estimated at one-fourth. Playing with words, sociologists called this system a militocracy - a far cry from meritocracy, but the gruesome reality of Putin's Russia.13 This elite was playing the same role in the Russian Federation that the nobility played in the Russian Empire: they formed the exclusive pool of candidates for top positions in all branches of power - executive and representative, military and civil, central and regional. Moreover, the new elite was almost as hereditary as the old nobility. In 2020, researchers found out that around two-thirds of the Russian bureaucracy had parents who had also worked in the bureaucracy. Thirty years after the collapse of the Soviet system, the descendants of the Soviet officials made up about 60 percent of Russia's ruling class.14
The new elite mixed insiders from the military-security complex with graduates in finance, law and linguistics. The Soviet Politburo consisted mostly of trained engineers, and the State Planning Committee was run for decades by an oilman, Nikolay Baybakov. In contrast, top executive positions in post- Soviet Russia were rarely held by industry experts. It was more common for a security officer, a lawyer or even a journalist to hold a top position in an oil corporation than for an oilman to make a career in the civil service. The post-Soviet elite consisted of generalists rather than professionals. Its icon was Igor Sechin, the head of Rosneft, who trained as a linguist and then worked in foreign intelligence. These people shunned specialized knowledge, technical skills and public performances. They were equally eager to lead an oil business, a megapolis or a military campaign.
Almost all members of the elite had their offices in Moscow and their homes around it. This wealthy, decadent and occasionally rebellious enclave was vastly different from the other regions of the country. Full of West European managers and Central Asian migrants, Moscow was to Russia what London was to the UK, or Hong Kong to China. While other regions viewed the capital with jealousy and distrust, the government explained that Moscow was the engine of growth, which was particularly incredible when there was no growth. Even during the war, Moscow protected its privileges. While recruitment was expanded in the poorest and distant areas of the country, conscription was declared in the capital only when defeat made it unavoidable. "The normal, peaceful rhythm of life in Moscow" will be protected by any means, declared the mayor of the Russian capital in the disastrous November of 2022.15