Russia’s military Keynesianism

Russian President Vladimir Putin and Defence Minister Sergey Shoigu meet soldiers during a visit at a military training centre of the Western Military District for mobilised reservists, outside the town of Ryazan on October 20, 2022 [Mikhail Klimentyev/Sputnik via AFP]

The Kremlin’s strategy to redistribute wealth through the war effort may boost its legitimacy.
Vladimir Putin, the president of Russia, declared a “partial” mobilization in Russia in late September as he pushed through the annexation of four seized districts in southeast Ukraine following phony referendums. The draft, as many have noted, violated an unwritten social agreement between Russian President Vladimir Putin and the populace, which called for political indifference in exchange for the provision of stable living conditions and, if not high, at least passable living standards.
The draft is now widely anticipated to change everything. To block the Ukrainian counteroffensive, poorly trained soldiers were deployed to the front lines as cannon fodder, and soon their bodies will start to return to their homes, infuriating the populace. This might cause dissatisfaction among the populace, which would call for additional repression, along with the economic effects of the sanctions.
Pure force would not be enough to keep the Kremlin in power for very long. Putin might be tempted to employ a tactical nuclear bomb or some other highly escalatory alternative to achieve military success, which would likely deprive him of his unreliable allies throughout the world. The Russian elite would either remove him out of fear for their own lives or bury the entire planet with him.
The issue with this way of thinking is that Putin does not simply have the option of increased repression and it is not the only foundation of his dictatorship. It’s critical to consider the political economy aspect of recent changes in order to comprehend the alternate course he could follow.
Putin emphasized that the recruited Russian soldiers will receive the same pay as the contract Russian soldiers, who have served as the mainstay of the Russian forces in Ukraine thus far, while announcing the “partial” mobilisation. Accordingly, depending on military rank, bonuses, insurance, and a generous welfare package, they should be paid at least $3,000 per month. The median wage in Russia is roughly five to six times higher than this. It would require the diversion of billions of dollars from the Russian state budget just to draft 300,000 soldiers, let alone more than one million, which some media sources have suggested may be the true target.
In the initial weeks following the start of mobilization, there were allegations of disarray in the payment arrangements. To emphasize that the high pay for mobilized soldiers and support for their families is a key component of his policy, Putin ordered that all issues with military wages be settled at a meeting of the Russian Security Council on October 19.
In the recently acquired regions of southeast Ukraine, money is also being spent on rebuilding critically damaged Ukrainian cities like Mariupol. Workers from all over Russia are currently sought for for the reconstruction project and offered double what they would earn at home. Even a construction worker who is not qualified makes more than $1,000 a month.
More than 30,000 Russian employees are currently employed in the rehabilitation of the occupied Ukrainian areas, and the government intends to boost that number to 50,000–60,000, according to Marat Khusnullin, the deputy prime minister of Russia.
The rehabilitation of the recently acquired Ukrainian territories is anticipated to receive at least $6 billion from the Russian budget during the following three years. It remains to be seen how much of it will avoid falling victim to Russian crony capitalism.
Additionally, a significant amount of money is going towards the military-industrial complex. The number of workers and earnings have increased along with the sharp rise in demand for weapons and ammunition. The expansion of the military-industrial complex at least somewhat offsets the reduction in output in the sanctions-affected and dependent on Western components businesses. In other industries, workers who were called up to the military were replaced by new hires, reducing unemployment.
Overall, the state’s “national defense” spending has already climbed by 43% from last year to this year, totaling $74 billion. Moscow now intends to spend almost $80 billion in place of a decrease that was scheduled for 2023. Additionally, it is anticipated that “national security and law enforcement” costs will rise by 46% to $70 billion the following year.
A military Keynesianism is emerging in Russia as a result of all these circumstances. Millions of Russians who are either fighting in Ukraine, working in the military or construction business, suppressing dissent at home and in the occupied regions, or who are family members have become the war’s primary beneficiaries.
This includes the development of a positive feedback loop that wasn’t truly there before. When the Russian ruling class initiated the war to protect its own interests, it only received ceremonial and apathetic support from the populace.
A large portion of Russian society, which now has a material stake in the struggle, is developing a new base for more active and conscious support as a result of the redistribution of state wealth through the military effort.
Even before February 24, it was obvious that a full-scale invasion and occupation of a significant portion of Ukrainian land would call for some significant changes to the Russian socio-political order. I stated the following shortly after the invasion began: “[t]he Russian state would need to use less financially conservative and more Keynesian economic policies to buy the loyalty of Russians and subjugated nations. […] This would require a more coherent imperialist-conservative project linking the interests of the Russian elites to the interests of the underclasses and other nations, as opposed to the empty rhetoric of “de-Nazification,” which has obviously been insufficient to inspire enthusiasm for the war within Russian society.
The majority of Russians have willingly accepted the mobilization, thanks in part to the Kremlin’s tactic of using force and bribery to influence a sizeable portion of the populace. The Kremlin’s concern over protests from more opposition-minded citizens of the big cities and its estimation that the financial incentives it provides would be more valuable to the residents of more impoverished peripheral regions are both possible explanations for the disproportionate number of people drawn from the poorer regions of Russia.


by: Miss Cherry May Timbol – Independent Reporter
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