sonin6_Mikhail SvetlovGetty Images_aven fridman Mikhail Svetlov/Getty Images

Sympathy for the Oligarch

The newly sanctioned oligarchs Petr Aven and Mikhail Fridman were textbook capitalists and true agents of change in the decades following the Soviet Union’s collapse. But when Vladimir Putin eschewed the free-market ideal, in favor of a heavily regulated economy dominated by state-owned monopolies, they said nothing.

CHICAGO – It may sound strange, but I feel sorry for Petr Aven and Mikhail Fridman, the billionaires behind the Russian financial conglomerate Alfa Group, who were sanctioned by the British government last year and by the United States government last week. Of course, this is nothing compared to the deep sorrow I feel for the innocent Ukrainians who have become victims of Russia’s brutal and unprovoked invasion. Nonetheless, there is something pitiable about pioneers of Russia’s post-Soviet market economy being punished over Soviet-style geopolitics.

Aven and Fridman – possibly more than any other high-profile Russian businessmen – embraced the new economic model introduced in Russia after the collapse of the Soviet planned economy. Exploiting any opportunity they could find, they made large investments – and earned big profits – in oil, telecoms, and finance. If they needed to strongarm others to maximize their returns, so be it. They were textbook capitalists, destroying the old and creating the new.

To appreciate fully what these oligarchs achieved, one must recall the deterioration and ultimate collapse of the planned economy. For years, factories churned out tanks and missiles, while grocery-store shelves grew progressively emptier, until, in 1983, the government began rationing basic foods, such as grains and butter. It also raised food prices sharply, though this failed to spur production. Shortly before the Soviet Union’s collapse in 1991, industrial production plummeted.

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