As a journalist in Russia in the 1990s, I reported on how a handful of oligarchs acted like bandits in the anarchy of the post-Soviet era. After a deal was struck in Davos, they intervened vigorously to help secure President Boris Yeltsin's re-election in 1996. This resulted in the so-called " half bank — or the rule of seven bankers — until some of the oligarchs fell out among themselves and, ultimately, with Yeltsin's successor, Vladimir Putin.
As is sometimes said, history doesn't repeat itself, but it often rhymes. Today, there are also dissonant resonances with the emergence of the American oligarchy surrounding some of the seven largest tech companies. “Today, America is evolving into an oligarchy of extreme wealth, power and influence that literally threatens our entire democracy,” Joe Biden warned in his presidential farewell address this week. Politicians, lawyers and the American people have a responsibility to confront this "tech-industrial complex," he said.
Led by Elon Musk, who spent more than $250 million to help re-elect Donald Trump, tech giants are flocking to Mar-a-Lago to trade favors with the incoming president and pay tribute to his inauguration Fund donations. What can we learn from the playbook and experience of the Russian forerunners?
Above all, as ruthless business people, oligarchs expect a return on their investment. In Russia, they benefited greatly from the notorious loan-for-stock scheme, a rigged privatization process that allowed them to control some of the country's most valuable oil and metals companies, including Yukos, at giveaway prices Neftneft, Sibneft and Norilsk Nickel.
Nothing like this will happen in the United States. But Musk's political investments have paid off astonishingly. In the days after Trump was re-elected, shares of Musk's car company Tesla soared, adding more than $300 billion to its stock market value. There are also reports that Musk could end up becoming the owner of TikTok's U.S. operations if the Chinese parent company is forced to spin off this month.
Musk’s fellow tech giants also expect looser regulations — particularly around antitrust and crypto rules — and more support for their businesses. Meta’s former liberal CEO Mark Zuckerberg made a U-turn as quickly as gymnast Simone Biles, canceling Facebook’s fact-checking and now urging Trump to protect the U.S. tech industry Protection from interference by overseas regulatory agencies.
Lacking institutional power, oligarchs attempt to influence politics by deploying mass information weapons. So, in Russia, Vladimir Gusinsky is in charge of the NTV channel and the newspaper "Sevodnya", while Boris Berezovsky is in charge of the channel ORT and the newspaper "Kommersant" 》 (Kommersant) newspaper. In the United States, Musk has turned X into his personal political platform, while Zuckerberg runs Facebook and Amazon co-founder Jeff Bezos owns the Washington Post.
Russian oligarchs even went a step further in trying to seize the government by joining it themselves. After Yeltsin was re-elected, Vladimir Potanin briefly served as First Deputy Prime Minister. Berezovsky was appointed Vice-President of the Security Council. As co-director of Trump's new Department of Government Effectiveness, Musk is not an official government employee. But Dorje is looking to recruit new people at federal agencies in Washington to come up with cost-cutting proposals. Given Musk's vast business activities, potential conflicts of interest are obvious.
Perhaps the biggest lesson to be learned from Russia’s oligarchic era, though, is that oligarchs are often bad at understanding politics. In Russia, Mikhail Khodorkovsky went too far, angered Putin, and spent the next decade in prison. Now, Putin tolerates only his own well-trained oligarchs who take orders from the Kremlin.
As a narcissist, Trump does not want to be surpassed by others. But the biggest danger facing the U.S. oligarchs may be backlash from their exciting Makga base. After clashing with Musk over immigration policy, Trump's firebrand former adviser Steve Bannon denounced the world's richest man as a "truly evil person" and vowed to kill him Pull down.
Of course, there are many differences between the United States today and Russia in the 1990s. Furthermore, stock market investors seem to believe that injecting capitalist rigor into government will boost the economy rather than destroy it. But American oligarchs may also find that, however different they may be from Russian oligarchs, the dynamics of power and politics are universal. Those who ride the political tiger and stumble will eventually suffer from it.
john.thornhill@ft.com