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As a reporter in Russia in the 1990s, I covered how a small group of oligarchs operated like bandits in the then-post-Soviet anarchy. Following the Davos agreement, they intervened heavily to ensure President Boris Yeltsin’s re-election in 1996. That led to the so-called Semibankrshchina, or rule by the Seven Bankers, and eventually parts of the oligarch split within themselves, and, more terminally, with Yeltsin’s successor, Vladimir Putin.
History does not repeat itself, as is sometimes said, but it often rhymes. And the emergence of an oligarchy centered around some of the Magnificent Seven’s technology companies in the United States today has jarring echoes. “Today, an oligarchy of extreme wealth, power and influence is taking shape in America, literally threatening our entire democracy,” Joe Biden warned in his farewell speech as president this week. . It’s up to politicians, lawyers and the American people to stand up to this “high-tech industrial complex,” he said.
The heads of Elon Musk’s technology companies, which spent more than $250 million on Donald Trump’s reelection campaign, traveled to Mar-a-Lago to befriend the president-elect and donate to his presidential inaugural fund. Names are listed. What can we learn from the strategies and experiences of Russian pioneers?
Above all, oligarchs are ruthless businessmen who expect a return on their investments. Russia benefited greatly from its infamous stock lending system. The fraudulent privatization process allowed it to take control of some of the country’s most valuable oil and metal companies, including Yukos, Sibneft and Norilsk Nickel, at bargain-basement prices.
Nothing comparable will happen in the United States. But Mr. Musk is already reaping staggering returns from his political investments. In the days following Trump’s reelection, shares in Musk’s car company Tesla soared, increasing the company’s stock market value by more than $300 billion. There are also reports that Musk could become the owner of TikTok’s U.S. operations if its Chinese-owned parent company is forced to sell this month.
Musk’s fellow tech giants are also hoping for regulatory relief, particularly around antitrust laws and cryptocurrency regulations, and more support for their businesses. Mark Zuckerberg, the former liberal CEO of Meta, who steered the ship as fast as gymnast Simone Biles by abolishing fact-checking on Facebook; He is now pleading with President Trump to protect America’s high-tech industry from interfering foreign regulators.
Given their lack of institutional power, oligarchy attempts to influence politics by deploying weapons of mass information. So it was Russia where Vladimir Gusinsky ran the NTV channel and the Sevodnya newspaper, and Boris Berezovsky controlled the ORT channel and the Kommersant newspaper. In the United States, Mr. Musk has turned X into a personal political platform, Mr. Zuckerberg commands Facebook, and Amazon co-founder Jeff Bezos owns the Washington Post.
Russian oligarchs went even further in trying to take control of the government by joining it themselves. After Yeltsin’s reelection, Vladimir Potanin briefly served as First Deputy Prime Minister. Mr. Berezovsky was appointed Vice-President of the Security Council. Musk, co-director of President Trump’s new Department of Government Efficiency, is not a full-time government employee. But Doge is deploying new recruits across federal agencies in Washington to recommend ways to cut costs. Given the wide range of Musk’s business activities, the potential conflict of interest is clear.
But perhaps the biggest lesson from Russia’s oligarchic era is that oligarchies are often bad at understanding politics. In Russia, Mikhail Khodorkovsky went too far and antagonized Putin and spent the next ten years in prison. Now President Putin tolerates only his own home-educated oligarchs who obey the orders of the Kremlin.
Mr. Trump, who stands at the pinnacle of narcissism, will not want to lose to others. But the biggest danger for the American oligarch may be a backlash from his excitable MAGA base. Former adviser Steve Bannon, who incited Trump’s mob after clashing with Musk over immigration policy, has denounced the world’s richest man as a “true evil man” and vowed to bring Musk down. Ta.
Of course, America today is different from Russia in the 1990s in countless ways. Moreover, stock market investors seem to think that injecting capitalist rigor into government will boost the economy rather than hurt it. But the American oligarchs may now realize that whatever their differences with the Russian oligarchs, the dynamics of power and politics are universal. Those who ride the political tiger and then slip will eventually be attacked by that tiger.
john.thornhill@ft.com
