Post-Soviet Peripheralization and the Ukraine War

A Review of Volodymyr Ishchenko's Towards the Abyss

Arman Spéth

December 6, 2024

Towards the Abyss: Ukraine from Maidan to War

by Volodymyr Ishchenko

Verso Books

2024

In times of rapid upheaval, it is common to be overwhelmed. Even if one had the feeling that something significant was about to happen, the sudden onset of such a situation takes most of those involved by surprise. Russia’s invasion of Ukraine was exactly such a moment, where one was surprised, although the escalation had long been in the air. These seemingly sudden and not-so- sudden changes require answers. Answers that are both quick and thoroughly thought out are rare to find, and that is precisely why Volodymyr Ishchenko’s book Towards the Abyss plays an outstanding role.

This review critically examines Ishchenko’s analysis of post-Soviet capitalism, especially in light of Russia’s large-scale invasion of Ukraine. It opens with an overview of Ishchenko’s central arguments, focusing on his exploration of the class interests that shape the conflict between Russia and Ukraine—a perspective that has sparked sustained international debate. Ishchenko’s reliance on political capitalism as an analytical framework provides valuable insights, though it may fall short of fully capturing the complexities of the post-Soviet landscape. Building on Felix Jaitner’s insights, this piece explores how economic rifts within Russia’s elite challenge a purely political capitalist view, revealing instead competing visions for Russia’s future.¹

What Is Progress?

Towards the Abyss starts with an excerpt from Arkady and Boris Strugatsky’s book The Snail on the Slope—a passage that in condensed form recounts the tragically unfolding history of post-Soviet life so far.² “Doomed, doomed and wretched. Or rather—happy and doomed, since they don’t know they’re doomed, that the mighty of their world see in them only a dirty tribe of ravishers,” the authors state, which captures the fleeting historical moment in which the collapse of the Soviet Union was accompanied for many by a naïve hope for a better life. There was a second of unsuspecting faith in the Western promise that democratic reforms would be followed by prosperity. Disillusionment followed immediately: an estimated 7 million excess deaths were recorded in Eastern Europe alone in the 1990s.³ The doomed have long been neither happy nor unknowing. The feeling of being cheated runs deep and they know exactly who the blame lies with. Ishchenko recalls an everyday experience in the post-Soviet space, namely the omnipresent awareness of one’s rulers as “thieves, crooks or mafia.”⁴ There is truth in these expressions; they are categories that still need to be translated into terms (Begriffe), and Ishchenko does this with the help of Max Weber, Iván Szelényi, Branko Milanović, and Ruslan Dzarasov. He calls these rulers “political capitalists” and the prevailing system in the post-Soviet space “political capitalism.” It is a system built on systematic plunder and one which produces post-Soviet stagnation and disorientation. But more on this later.

With the exception of the German Democratic Republic, there has never been a regime in the West that called itself socialist or communist. Marxists in the West therefore operate under different conditions than their comrades-in-arms from countries where the elites adorned themselves with the same name. And because a move towards socialism in formerly nominally socialist countries always necessarily entails a return to socialism, the question of progress is posed under different circumstances than in the West. While the Left in the West still takes the term “progress” for granted, this is negotiated differently in Ukraine (or Russia, Kazakhstan, and so on). The continuation of Strugatsky’s quote should also be read from this perspective: “that for them everything is preordained and—worst of all—that historical truth here…is not on their side, they are relics, condemned to destruction by objective laws, and to assist them means to go against progress, to delay progress on some tiny sector of the front.”

Looking at the post-Soviet space, we find in most countries small but vocal groups that claim progress for themselves and pursue an aggressively antisocialist course. They brand the Soviet Union and the idea of communism as backward and link it to modern-day Russia.⁵ These are mostly middle-class people who, according to Ishchenko, are connected to transnational capital and are orientated towards the West. In a very personal introduction, he describes how he experienced these groups in the course of his academic and political life and refers to them as “nationalist intellectuals” or “comprador intellectuals.”⁶ They want modern Ukraine to be nationalistic, neoliberal, and European.⁷ For them, integration into Western institutions represents an “ersatzmodernization,” as Ishcenko puts it, meaning “joining both ‘proper’ capitalism and the ‘civilized world’ more generally.”⁸ While they also associate their vision of a modern Ukraine with freedom of expression and plurality, “at the critical moments when these discussions could really matter politically, and not just appease the ‘enlightened’ conscience, all the red lines were strictly enforced, and you had to get back in line. Or get in trouble.”⁹ Even nominally left-wing voices were able to nestle in there and provided “‘Ukrainian voices’ for certain progressive sections of the international public.”¹⁰ In advancing these policies under the banner of decolonization against Soviet/Russian forces, these groups can feel like the genuine protagonists of radically progressive political projects.

But can their progress be generalized? “Only that doesn’t interest me….What has their progress to do with me, it’s not my progress and I call it progress only because there’s no other suitable word,” state the final lines Ishchenko quotes from the Strugatsky brothers.¹¹ He points out that alongside the political capitalists and the Western-orientated middle classes, there is another group, one that has suffered most from the post-Soviet transformation on the one hand and embodies an alternative vision of progress on the other: Soviet Ukrainians. Ishchenko is not interested in Soviet nostalgia, but in progress with universal appeal—in other words, an internationalist class perspective that is capable of going beyond Ukraine. Even “faded, this vision of progress marked the worldview of the last Soviet generation.”¹² And because these Ukrainians stand for an alternative, universal progress, they challenge both the domestic political capitalists and the professional middle classes, as well as the imperialist actors from both Russia and the West.

Post-Soviet Vicious Cycle

These three presented actors (political capitalists, professional middle classes, and Soviet Ukrainians) more or less run through the entire book. So far, however, only the first two are recognizable as organized and self-aware shapers of the post-Soviet space. And it is precisely their mutual and internal (for example, various factions of political capitalists) hostile activity for the leadership of the country with a simultaneous inability “to develop sustained political, moral and intellectual leadership” for the subaltern classes that shapes the “post-Soviet vicious cycle.”¹³ The political capitalists “who amassed their fortunes in the process of rapid and arbitrary privatization of state property in the 1990s have struggled to secure broader legitimacy for their rule….The source of that legitimacy did not include any kind of developmental project to lead the way out from the huge grey zone of stagnation and degradation.”¹⁴ The dissatisfaction of the broad sections of the population leads to regular uprisings, which, however, do not bring about any fundamental changes and only result in replacing one group of rulers with another. This is another reason why Ishchenko (together with Oleg Zhuravlev) calls these uprisings “deficient revolutions.”¹⁵

While political capitalists want to maintain their system, which is characterized by close and often identical relationships between political and economic elites and thus enabling so-called “insider rents,” the professional middle classes want to integrate Ukraine into the world market according to the Western model. Excluded from the structures of political capitalism, the professional middle classes “aspired to the role of comprador bourgeoisie allied with transnational capital. The latter would benefit from the enforcement of “transparency” and “anti-corruption,” thus eliminating the main competitive advantages of Ukraine’s political capitalists.”¹⁶ The main income and career opportunities for the professional middle classes, as well as the possibility of gaining political influence, lay in the prospects of intensifying political, economic, and cultural relations with the West, and so they also act as the vanguard of Western soft power.¹⁷ They receive support from those sections of the labor force that have already been integrated (at low wages) into the EU markets. The eastward-oriented political capitalists were able to gain the support of the labor force from large post-Soviet industries and the public sector, to whom they “could offer at least some stability in the midst of the post-Soviet collapse, and who passively supported its rule without any enthusiasm for it.”¹⁸

The collapse of the Soviet Union resulted in an unforeseen economic, political, and cultural decline of the post-Soviet countries and exacerbated the existing hegemony crisis of the ruling powers.

How this conflictual process of the post-Soviet hegemony crisis developed and how Ishchenko’s thoughts matured over a period of almost ten years can be traced thanks to the book’s chronological structure. This is a courageous endeavor because Ishchenko does not hide his mistakes—for example, his overly optimistic expectations of Zelensky’s election, which run through several texts. The first two chapters provide interesting insights into the Euromaidan, which Ishchenko also attempts to analyze on the basis of class-specific differences. This is a refreshing and useful perspective, especially considering the fact that the common oversimplified narratives about the Euromaidan rarely go beyond “struggle for democracy and independence” or “Western and/or far-right coup.”

The post-Euromaidan regime brought no progress and prepared the ground for the politically inexperienced former comedian Volodymyr Zelensky (Chapter 3). Ishchenko describes the reasons for his election and puts forward some (overly optimistic) theories for the future. The fourth chapter compares the protests in Belarus (2020) with the Euromaidan and finds the main difference between them in the organizational and physical strength of the far-right forces in Ukraine. The fifth chapter (coauthored with Oleg Zhuravlev) provides a Gramsci-inspired analysis of the post-Soviet hegemonic crisis—an analysis that lays the foundation for the remainder of the book.

The sixth chapter introduces the second part of the book. Here the collection is comprised of texts that deal with the escalating conflict between Russia and Ukraine. The first entry of the chapter starts less than a week before the large-scale invasion and the last exactly eight months after (with Ishchenko notably among the first to suggest that military Keynesianism might prove effective in Russia). The seventh chapter examines the question of Ukrainian perspectives on the NATO military alliance and shows how, contrary to prevailing opinion, we cannot even today be certain that the majority of Ukrainians are in favor of joining NATO. The eighth chapter will be critically analyzed in much greater detail below, so let me turn briefly to the ninth chapter, in which the author criticizes approaches to the “decolonization” of Ukraine inflected with identity politics. He turns instead to a universalistic “Soviet Ukrainian” perspective. The book concludes with a very enlightening interview that Ishchenko gave for the New Left Review.

The eighth chapter represents the analytical centerpiece of the book, in which Ishchenko elaborates and specifies his ongoing research into the post-Soviet crisis. Here, he provides his view on the central question of what motivated the ruling class in Russia to start the large-scale war.

Incompatible Modes of Accumulation

The transition from socialism to capitalism in the post-Soviet states has a particular character. Former Soviet countries experienced declines appropriate to already (partially) industrialized societies, and ones that possessed established institutions oriented by and towards a planned economy. Therefore, the process of “primitive accumulation” was characterized by the appropriation of former state property by the former Soviet elites—referencing Steven Solnick, Ishchenko describes this process as “Stealing the State.”¹⁹ The collapse of the Soviet Union resulted in an unforeseen economic, political, and cultural decline of the post-Soviet countries and exacerbated the existing hegemony crisis of the ruling powers. Due to the deindustrialization of most post-Soviet countries, they were relegated to supplying the world markets with raw materials and/or minimally processed commodities; the newly emergent bourgeoisie deposited revenues in financial markets outside the country: These are clear signs of a (semi)peripheral position in the world-system.

Those who were able to rise to the status of “oligarchs” by converting state property into private property became political capitalists. Then and now, their most important competitive advantage lies in the preferential treatment they receive from the state, which protects them and allows them to skim off so-called “insider rents.” This distinctly “political” capitalist is, according to Ishchenko, different from more normal “capitalists, whose advantage is rooted in technological innovations or a particularly cheap labor force.”²⁰ In this regard, Ishchenko builds his study on the work of Russian economist Ruslan Dzarasov, who uses the concept of “insider rents” to describe income that is not derived from investments but, for example, from unpaid dividends and unremunerated labor and which therefore goes beyond the “usual” corporate profit. This basically amounts to nothing other than state-approved or deliberate systematic looting.²¹ This world is characterized by enormous instability and is doomed to technological backwardness and, consequently, to a further weakening of its position on the world market.

While post-Soviet political capitalists often pursue international markets due to the limitations of domestic markets and the need to mitigate risks associated with shifting power dynamics at home, they also have a significant interest in the sovereignty of “their” state. This sovereignty is essential for maintaining exclusive control over the selective state benefits on which they heavily depend.²² Without state protection, the companies of political capitalists would be exposed to unwinnable competition on the world market.

And it is precisely in the core logic of this system of political capitalism that, according to Ishchenko, the reason for the invasion of Ukraine is to be found: if “insider rents” guaranteed by the state are of fundamental importance for the accumulation of wealth, these capitalists demarcate the territory in which they can skim off these very rents.²³ As the primary sources of rent extraction in Russia began to deplete, Russian elites turned to external means to maintain the rate of rent by expanding the pool of extraction.²⁴ Since Russia has considerable economic and, above all, military advantages compared to other post-Soviet countries, it is the only one in a position to extend these limitations significantly.

This is where Ishchenko sees the reason for the foreign policy intensification of integration projects under Russian leadership, such as the Eurasian Economic Union.²⁵ The Western-oriented middle classes have opposing interests to those of the political capitalists and are keen to push ahead with Western integration, which would lead to the end of the system of rent extraction for political capitalists. The discussion about the West’s role in preparing the Russian invasion usually centers on NATO’s threatening gestures toward Russia. Ishchenko’s aim is to reveal the economic interests of this conflict, to which he attaches greater importance than the explanatory approach that attributes the conflict to the military threat posed by NATO. Taking into account the phenomenon of political capitalism, Ishchenko attempts to show the class interests of these opposing models (political capitalism versus “impersonal,” competition-driven capitalism). The advance of the one means the end for the other and vice versa.²⁶ Therein lies the “truth” of the Kremlin’s propaganda, which publicly links the survival of the Russian nation with the victory in Ukraine: the “special operation” ensures the survival of Russia’s political capitalism.

Indeed, there are indications that important capitalist fractions in Russia are benefitting from the invasion. However, it remains unclear whether the political capitalists are the dominant group within the Russian elite, or whether there are other groups that are in favor of the war in Ukraine for other reasons. In Ishchenko’s analysis, it seems that the ruling classes in post-Soviet capitalist states consist exclusively of political capitalists, primarily motivated by the pursuit of “insider rents.” He does not distinguish between different segments of the bourgeoisie, some of which are not reliant on “insider rents” at all. For this reason Ishchenko’s analysis leaves important questions unresolved.

From Peripheralization to Reindustrialization: The Shifting Dynamics of Russian Capitalism

For all the importance of political capitalists, Russia has economic sectors that are driven by the logic of the intensive growth model—that is, focus on modernization through investment and building competitiveness. The debates about diversifying the economy and building competitive industries in Russia speak volumes.²⁷ There are diverging interests within the Russian power bloc and therefore also disputes about the country’s future course. The continuing peripheral role of the Russian economy in the world market is a source of frustration not only for parts of the state apparatus but also for significant sections of the bourgeoisie. Significant factions of Russian capitalists have an independent economic basis for accumulation due to their international influence, particularly in the energy sector and, to some extent, the arms industry and related fields. For this reason, they have maintained—or previously held—a strong interest in unobstructed access to the world market.

In his very informative, recently published work, Felix Jaitner sheds light on the conflicts within the ruling bloc over Russia’s future direction. He shows how relevant forces in Russia (domestically oriented capital factions, national conservative forces, parts of the state bureaucracy, the nationalist Left like the Communist Party of the Russian Federation) are all in favor of an economic policy that should be increasingly dedicated to the reindustrialization of the country, with the aim of countering Russia’s peripheralization. This path has only been partially pursued so far, as significant segments of the economic elite—primarily the representatives of the extractive sector—favored a Western orientation and open integration into the world market. Advancing state-led reindustrialization would have required import-substitution measures, which could have jeopardized economic ties with the West. However, it was precisely upon these relationships that the extractive sector (mainly the oil and gas industry) relied.

Yet, the war and subsequent sanctions have opened new opportunities for those advocating a reindustrialization strategy, increasingly including representatives of the extractive sector who seek to reduce their technological dependence on the West. This should not, however, be interpreted as a shift away from extractivism. Rather, the Russian state seeks a convergence between the extractive and productive sectors by strengthening the country’s industrial base.

In this context, James K. Galbraith aptly labelled the Western punitive measures “The Gift of Sanctions.”²⁸ In discussing the implications of such a strategy, Galbraith correctly describes how a reindustrialization effort “would have required imposing tariffs, quotas, limitations on foreign ownership, even expulsions of successful and honest enterprises working on Russian soil. Internal opposition would have been strong….The condemnation from the West would have been extremely, and justifiably, harsh.”²⁹ Consequently, if the sanctions had not been enacted, it is hard to envision how the current opportunities for Russian capital, aimed at strengthening its competitiveness, could have emerged. The Russian state had not prioritized the calls for reindustrialization, but rather gave them a more limited focus. It was only with the imposition of Western sanctions that a clear shift occurred. Therefore, when assessing the significant costs of the war in relation to the invasion, we should evaluate them against the potential losses that could arise from the deepening of ongoing peripheralization. This approach is more appropriate than comparing them to the situation prior to the onset of the large-scale war.³⁰

it is precisely in the core logic of this system of political capitalism that, according to Ishchenko, the reason for the invasion of Ukraine is to be found

The pursuit of state protection against stronger foreign competition to build a robust domestic industry is far from unique. Many industrialized nations, including the United Kingdom, the United States, Germany, France, Sweden, the Netherlands, Switzerland, Japan, South Korea, and the “Asian Tigers,” developed through interventionist trade and industrial policies that promoted and protected their own industries. Only after achieving global competitiveness did they embrace free trade (we now see a reversal of this in current US economic policy).³¹ Proponents of Russia’s reindustrialization strategy seek to align with this historical path.

Could it be argued, in light of Ishchenko’s perspective, that this process contributes to an increase in “insider rent” opportunities? Yes and no: while “insider rents” might arise as a side effect of a broad modernization initiative, the central goal lies in fortifying Russia’s own accumulation base to counteract its peripheralization. In other words, the current reindustrialization effort is not aimed at reinforcing a stagnant, rent-dependent system but rather at revitalizing a semiperipheral capitalist country that has struggled to break free from its structural regression.

Without a radical departure from the previous path, the proponents of reindustrialization fear a further peripheralization of the country, which would consolidate its primary role as an exporter of raw materials. They call for a strengthening of manufacturing sectors and link this strategy with a foreign policy orientation towards the post-Soviet region and Asia. The founding of the Eurasian Union should therefore be seen in the light of economic modernization strategies rather than as a source of “insider rents,” as Ishchenko argues. The four founding states originally envisaged, namely Belarus, Kazakhstan, Russia, and Ukraine, are the most industrially and financially developed and diversified countries in the region.³² As the largest market in the post-Soviet space (after Russia) and an essential part of the so-called “Russian world,” Ukraine’s participation in the Eurasian Union was of the utmost importance for its viability. Russian economic relations with the Donbass region, the center of Ukrainian industrial production in the east of the country, where Ukraine’s high value-added industries are also located, were particularly close.³³

Jaitner draws attention to another important point: the increasing advance of “green capitalism” is putting Russia’s fossil fuel-focused economy under pressure. As a result, massive declines in fossil fuel imports are to be expected and “Russia is at risk of further economic decline over the next 30 to 40 years should it fail to diversify its economy.”³⁴ The increased need to reorient the economy as a result of the ecological crisis also paves the way for the acceptance of state strategies to support reindustrialization though in this case, under the auspices of “green extractivism.”

Even though the proponents of reindustrialization benefit from sanctions, it does not follow that the reindustrializing bloc as a whole had been wanting the war from the beginning, or that the war was initiated with a clearly articulated aim of modernizing the domestic economy. It is evident that security policy considerations have played a more direct role in the decision to invade Ukraine than immediate economic interests. Nevertheless, the actions of the Russian state focus on the long-term strengthening of Russian capital, as it seeks to bolster its economic foundation. Since this strengthening through reindustrialization must occur in opposition to the immediate interests of the extractive sector, it necessitates a break with the West, which has indeed materialized due to the escalation of the conflict since 2022. For advocates of the reindustrialization strategy, this shift can be seen as a “chance discovery,” to borrow a phrase from Alain Lipietz.³⁵ In other words, while the immediate economic interests of the Russian ruling class may not align with supporting war, the underlying pressure of losing significance has been influential. Increasingly, they have come to realize that enhancing their economic—and consequently political—position cannot be accomplished through continued cooperation with the West, leading them to sever ties.

Years of economic stagnation in Russia, along with escalating geopolitical tensions with the West prior to the large-scale invasion, have significantly shaped Russia’s internal development. These stagnating and conflict-laden trends are not isolated to Russia but are observable on a global scale, closely tied to the broader crisis in the capitalist world system that has endured since 2008. This ongoing “Long Depression” described by Michael Roberts has led to increasingly unfavorable conditions for capital accumulation, prompting more active state intervention. In an interview with Felix Jaitner, the head of Russian operations for an international oil company emphasized that an end to the sanctions “could remove the urgency”—referring to the urgent need for active state support for Russian capital.³⁶ The objective is clear: through a confrontational foreign policy strategy, the long-term competitiveness of domestic capital is expected to improve.

Whether they succeed in strengthening the accumulation base of Russian capital is another question, and doubts are warranted: although Russia is diversifying its economic relationships, the existing patterns of (semi)peripheral integration into the world market largely persist. This is particularly evident in its relationship with China, its most important trading partner, where Russia exports raw materials and imports complex commodities in return.³⁷

Conclusion

How should these results be assessed in the context of Ishchenko’s analysis? The class interest of those who wish to advance the reindustrialization process is not based on the possibility of skimming off “insider rents,” but follows dynamics that are quite “classically” capitalist: building competitive businesses through investment with the aim of chasing above-average profits in domestic and international markets. The desire to break out of their (semi)peripheral position largely explains the interest of major Russian capital factions in the war. This understanding does not contradict Ishchenko’s analysis of political capitalism in post-Soviet countries and its incompatibility with the Western variety of “liberal” capitalism. The system of “insider rents” is certainly more widespread in post-Soviet countries than in the West, but to conclude that the main interest of the Russian bourgeoisie in the war in Ukraine lies in the goal of expanding the system of rent skimming is too one-sided.

Thus, the efforts to modernize Russia through reindustrialization and, consequently, the strengthening of domestic capital are not adequately captured by the theory of political capitalism. Yet they are undoubtedly central to Russia’s trajectory. The lens of political capitalism allows us to see only certain fragments of the dynamics of post-Soviet capitalism—fragments that, although still relevant today, were more prominent during the chaotic and gang-dominated era of the 1990s. However, since the period of stabilization under Putin in the early 2000s, these fragments have become less important than they were at that time.³⁸ Current developments in Russia are increasingly characterized by the struggle against its own peripheralization, and this peripheralization does not arise from the depletion of sources for “insider rents,” but rather from the subordinated position of Russian capital in the global competition.

The “resurgence” of the Russian elite is what needs to be examined more closely, and the analytical framework of political capitalism offers only limited insights into this. A more detailed investigation into the interests of various capital factions could significantly enhance our understanding of the dynamics and differences within post-Soviet capitalism, thereby expanding our explanatory frameworks. It is therefore important to read Jaitner and Ishchenko’s analyses in such a way that they complement each other in order to obtain a conclusive answer to the question of what economic interests lie behind the invasion of Ukraine.

Despite these differences in analysis, focused on a key chapter of the book, Ishchenko’s work as a whole is convincing in its thorough examination of the post-Soviet space with a focus on Ukraine and Russia. He also delivers a passionate commitment to universalism, which, notwithstanding differences, recognizes general conditions for a good and self-determined life for all people, which can only be realized through revolutionary change. His research is not only received in academic circles (often closed to the outside world) but also has a strong presence in radical political contexts. His work can therefore be seen as both a forward-looking plea for the Soviet people and a kind of interventionist thinking, a thinking that provides an impetus for the political practice that would move in that direction.

Capitalism, post-Soviet, Russia, Ukraine

Arman Spéth

Arman Spéth is a Zurich-based PhD candidate researching the development of capitalism in Kazakhstan. He contributes to various leftist journals and was part of the editorial team of the Swiss journal Widerspruch: Beiträge zu Sozialistischer Politik.

Post-Soviet Peripheralization and the Ukraine War

A Review of Volodymyr Ishchenko's Towards the Abyss

Arman Spéth

What Is Progress?

Post-Soviet Vicious Cycle

Incompatible Modes of Accumulation

From Peripheralization to Reindustrialization: The Shifting Dynamics of Russian Capitalism

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