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As a reporter in Russia in the 1990s, I covered the ways in which a handful of oligarchs made out like bandits in the post-Soviet anarchy of the times. Following a pact hatched in Davos, they intervened heavily to help secure the re-election of president Boris Yeltsin in 1996. That led to what was called the semibankirshchina — or rule of the seven bankers — until some of the oligarchs fell out among themselves and, more terminally, with Yeltsin’s successor Vladimir Putin.
As is sometimes said, history does not repeat itself, but it often rhymes. And there are jarring echoes in the emergence of an oligarchy in the US today, revolving around some of the Magnificent Seven tech companies. “Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy,” Joe Biden warned this week in his farewell speech as president. It was up to politicians, lawyers and the American people to confront this “tech industrial complex”, he said.
Led by Elon Musk, who spent more than $250mn helping to re-elect Donald Trump, tech bosses have been filing into Mar-a-Lago to trade favours with the incoming president and donate to his inauguration fund. What might we learn from the playbook and experience of their Russian forerunners?
Above all else, as cold-headed business people, oligarchs expect a return on their investment. In Russia, they benefited massively from the infamous loans-for-shares scheme, a rigged privatisation process that enabled them to grab control of some of the country’s most valuable oil and metals companies, including Yukos, Sibneft and Norilsk Nickel, at giveaway prices.
Nothing comparable will happen in the US. But Musk has already enjoyed a stunning return on his political investment. In the days after Trump’s re-election, the share price of Musk’s car company Tesla surged, adding more than $300bn to its stock market value. There have also been reports that Musk might yet end up as owner of TikTok’s US business if the Chinese-owned parent company is forced to divest this month.
Musk’s fellow tech titans are also anticipating looser regulation — particularly around antitrust and crypto rules — and more support for their businesses. Meta’s one-time liberal chief executive Mark Zuckerberg, who has swivelled as fast as the gymnast Simone Biles by scrapping fact-checking on Facebook, is now urging Trump to defend the US tech industry from meddling regulators abroad.
Given their lack of institutional power, oligarchs try to influence politics by deploying weapons of mass information. So it was in Russia where Vladimir Gusinsky ran the NTV channel and Sevodnya newspaper, while Boris Berezovsky controlled the ORT channel and Kommersant paper. In the US, Musk has turned X into his personal political platform, while Zuckerberg directs Facebook and Amazon’s co-founder Jeff Bezos owns the Washington Post.
Russia’s oligarchs went even further in trying to capture the government by joining the government themselves. Following Yeltsin’s re-election, Vladimir Potanin acted briefly as first deputy prime minister. Berezovsky was appointed deputy head of the Security Council. As co-head of Trump’s newly imagined Department of Government Efficiency, Musk is not a regular government employee. But Doge is looking to post recruits across Washington’s federal agencies to recommend ways of slashing costs. Given Musk’s sprawling business activities, the potential conflicts of interest are stark.
Perhaps the biggest lesson to draw from Russia’s oligarchic era, though, is that oligarchs are often lousy at understanding politics. In Russia, Mikhail Khodorkovsky over-reached, antagonised Putin and spent the next 10 years in jail. Now Putin only tolerates his own house-trained oligarchs who do the Kremlin’s bidding.
As narcissist in chief, Trump will not want to be outshone by others. But the biggest danger for US oligarchs may be a backlash from his excitable Maga base. After clashing with Musk over immigration policy, Steve Bannon, Trump’s rabble-rousing former adviser, denounced the world’s richest man as a “truly evil guy” and vowed to take him down.
Of course, America today differs from 1990s Russia in countless ways. Moreover, stock market investors seem to reckon that an injection of capitalist rigour into government will boost the economy, not disfigure it. But US oligarchs may yet discover that, whatever their differences with their Russian counterparts, the dynamics of power and politics are universal. Those who ride a political tiger — and slip — end up being mauled by it.
john.thornhill@ft.com
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