By Gilbert Doctorow, Substack, 10/25/26

To the best of my knowledge, you will not find anywhere else the discussion about money and politics in Russia that I am about to present below. This is not because the subject is marginal or exotic: on the contrary it should be central to any explanation of how Russians vote and why President Putin and his party United Russia maintain control of the Duma and of Russian political elites today. However, de facto Russian Studies have ceased to exist in the United States for well over a decade and for that reason the subject at hand has gone unnoticed, unexamined.

I take for my marker on the last generalization, my close and regular observations of one of the two founding centers of Russian studies at U.S. universities dating from 1949, Columbia University’s Harriman Institute. When I was last on campus as a Visiting Fellow of the Harriman in 2010-2011 the scope of Russian studies had been reduced to discussion of the crimes of Vladimir Putin & Co. against human rights in Russia and assorted freakish but at the time fashionable subjects like how LGBT are treated in Russia today. More recently, even that very skewed definition of Russian studies has been thrown overboard, and the Harriman Institute has implemented the fashionable concept of ‘decolonizing Russian studies’, meaning that Russia itself disappeared from the syllabus and what is studies is the Borderlands of the former Russian Empire: Central Asia, the Caucasus and, first and foremost, Ukraine. Indeed, the Harriman Institute might be better named “The Center for Ukrainian Studies.” The good Governor Harriman, patron of the Institute, must be turning over in his grave.

From my regular correspondence with Professor Francis Boyle (deceased) of the University of Illinois, and holder of both law degrees and a history PhD in Russian from Harvard, I heard his disgust over the way the Davis Center (formerly the Russian Research Center) had similarly degenerated into a totally useless platform for Ukrainian propagandists and anti-Russian studies, even though a properly named Ukrainian Center has existed on campus since the 1970s when I was a witness to its creation.

With that introduction out of the way, let us move on to the substance of this essay: money, investments and how the upper middle classes of Russia, the bulwark of any government have been properly bought off by United Russia and remain on the sidelines of any political tensions there may be over the conduct of the Ukraine War, the state of the economy and other issues that otherwise could attract their attention and activism.

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The common figure given for Russians with money to invest is 6% of the general population. The bottom 94% of the population is living from hand to mouth. It can and is bought off by Power with good subsidies for their home mortgage loans, especially as regards young families, with ever rising pensions for the elderly that are paid on time, with improving civilian infrastructure including roads, schools, hospitals and polyclinics. All of these measures are properly executed by the governing United Russia party. Add to that the ultra-generous sign-up payments for those volunteering to serve in the Special Military Operation. Depending on where you live, that can be approximately 35,000 euros equivalent in roubles, which is typically greater than 3 years of salary that your ordinary bloke would have been making before the war. Death benefits and life pensions for the critically wounded are similarly generous.

All of the foregoing, of course, has little bearing on the top 6% of the population, whose minds are elsewhere, on investments to build upon their acquired capital.

As we know, the prime interest rate set by Elvira Nabiulina at the Central Bank has spiked and remains today far above the official inflation rate of 7%. A year or so ago, the prime was at 21%. Today it is at 14%. As I have indicated repeatedly on these pages, such interest rates have devastated small entrepreneurs, because effectively they are deprived of working capital at rates that their business margins can support. Meanwhile, major corporations, especially those active in the military production and other privileged spheres in this dirigiste economy, receive highly subsidized bank loans and can operate normally.

One may assume that the small entrepreneurs are a minor contingent in the upper 6% and that the vast majority in the 6% of the Russian population are beneficiaries of the high prime rate because it supports very high rates of interest on their time deposits in banks (currently hovering at 12.5%) and on money market mutual funds (currently 13 – 16%).

To be sure, in its attempts to raise money to fill the budget deficit of a ‘guns and butter’ way of running the war, the Russian Treasury has introduced a progressive tax on bank interest, dividends and capital gains from share ownership and mutual funds investments. The tax is mostly at the 13% to 15% level and can be avoided entirely by investing in privately managed mutual funds that are held for at least 3 years before being cashed out.

These laws on investments and taxes, just like the prime rate that allows such generous profits to investors in what are essentially risk-free assets like money market mutual funds, are all the work of the United Russia party.

I rest my case there: the potentially agitated Russian elites in that top 6% of the population in a wartime that has lasted nearly 5 years have been bought off very cleverly. Their sons and daughters face no draft that would put them in harm’s way. And their cash hoard is allowed to rise handsomely day by day.