From Putin to Musk: the making of a modern-day oligarch
Today’s super-rich govern countries, set agendas — and thrive in times of turmoil. Simon Kuper on how oligarchs diversified
Anyone who thinks of oligarchs as a strictly post-Soviet phenomenon should reflect that the original definition comes from Aristotle, writing nearly 2,400 years ago: “Wherever men rule by reason of their wealth, whether they be few or many, that is an oligarchy.”
Oligarchs are an eternal type that is now proliferating worldwide, west as well as east. Many of them run countries. Yet oligarchs are strangely understudied, says David Lingelbach, who with Valentina Rodríguez Guerra has written a new book, The Oligarchs’ Grip, which reworks Aristotle’s definition. An oligarch, say the authors, is “someone who secures and reproduces wealth or power, then transforms one into the other”. So: what makes an oligarch — especially today?
First, oligarchs are not simply tycoons. The latter are rich business people who may not have any political power. Lingelbach told me that Elon Musk went from tycoon to oligarch when he bought Twitter last year. The social media company, now renamed X, shapes opinion on events from Ukraine to Israel — often by platforming falsehoods. Today, adds Lingelbach, “Musk is one of the five or 10 most consequential oligarchs in our world.”
The book distinguishes various types of oligarchs. “Business oligarchs” like Musk turn wealth into political power, while “political oligarchs” go the other way. A classic example of the latter, says the book, is Vladimir Putin, “a billionaire with nuclear weapons”. Oligarch presidents have decision-making power, oligarch influencers such as Rupert Murdoch, Charles Koch and George Soros set agendas, while platform owners such as Musk, Mark Zuckerberg and Google’s Larry Page have rewired the information streams that flow into our brains.
The Oligarchs’ Grip might have been titled How to Be an Oligarch. Above all, the book argues, oligarchs are opportunists. They seize their big chance, which often arises — unnoticed by ordinary people — during times of turmoil. “For oligarchs,” write the authors, “history is made in the back room.”
Oligarchs have “friends with benefits”, meaning that they use and then discard temporary partners — as both Putin and Roman Abramovich did with fellow oligarch Boris Berezovsky, later found hanged at his home in Ascot, England. An oligarch’s reign is often brief, and he (they are almost all men) is generally surrounded by bodyguards. Oligarchs who get rich in dangerous places usually move to safer ones, notably London.
Most of today’s leading oligarchs emerged during a time of turmoil that’s now conventionally thought of as a placid interlude: the 1990s. That decade’s sell-off of former Soviet state assets was “probably the single largest transfer of assets in human history”, wrote Chrystia Freeland, now Canada’s finance minister, in her book Plutocrats. Seven oligarchs secured control over half of Russia’s economy. That is when the word “oligarch” entered Russian common usage, derived not directly from Aristotle but from the American author Jack London’s Soviet-approved political novel The Iron Heel.
Russia’s “sale of the century” coincided with oligarch-friendly shifts elsewhere: globalisation, the arrival of the internet and the rise of private TV, monetised by Murdoch and Silvio Berlusconi, a rare oligarch from social-democratic western Europe. Berlusconi’s election as Italian prime minister in 1994 demonstrated a popular admiration for oligarchs — something foreseen, with trepidation, 200 years earlier by the American founding father John Adams, whose biggest fear for the US was not a tyrannical king but an oligarchy. (He wrote to Thomas Jefferson in 1787, responding to the newly written US Constitution: “You are afraid of the one — I of the few . . . You are Apprehensive of Monarchy; I, of Aristocracy.) The business and politics sections of the news began to merge.
This century, fortunes grew bigger than ever previously imagined. Countries far beyond Russia also handed state assets and functions to rich people, which is how Musk ended up operating both American space transport and the Starlink internet satellites that became essential to Ukraine’s war effort. The Oligarchs’ Grip says that in the 1940s, the Chinese oligarch TV Soong “was believed to be the richest person in the world with a net worth of $600 million in today’s dollars”. Musk’s net worth now is about $207bn. In 2021, the director of the UN’s World Food Programme said that 2 per cent of his wealth would “save 42mn people on the brink of starvation”.
The number of oligarchs who are heads of state or government has jumped from three in 1988 to more than 20 today, calculate Lingelbach and Rodríguez Guerra. Examples include South Africa’s president Cyril Ramaphosa, Nigeria’s Bola Tinubu, El Salvador’s Nayib Bukele (though financially he may qualify only as a “minigarch”) and the freshly elected 35-year-old Ecuadorean president Daniel Noboa. Oligarch politicians often cast themselves as people’s champions against elites. Both Noboa and Bukele are oligarch heirs; Latin American oligarchies are more family-based than European ones, Rodríguez Guerra told me.
Clearly there are differences between post-Soviet oligarchs and their American counterparts, in particular. In 1990s Russia, the route to instant wealth was using government patrons to get an inside track on privatisations. Because of these origins, Russian oligarchs never quite owned their fortunes. They only looked after the money, until the moment when their patrons in government asked for it.
Many post-Soviet oligarchs built a life between Moscow and homes around the west, using the creative tension between Russia and its western adversaries. But as their colleague Mikhail Khodorkovsky’s 10 years in jail reminded them, they were never safe.
It’s similar in China, where the regime occasionally jails or disappears oligarchs. Jack Ma, founder of the ecommerce conglomerate Alibaba, was last year found to be living in Tokyo and teaching at various universities outside China. In short, autocracies do a better job than democracies or failed states at reining in oligarchs. The flipside is that the autocratic leader often becomes the country’s chief oligarch. His ability to seize rivals’ assets is itself considered an awe-inspiring display of political power. Saudi crown prince Mohammed bin Salman achieved this when he sequestered the kingdom’s richest power brokers in Riyadh’s Ritz-Carlton in 2017.
American tech barons, by contrast, generally built their platforms before their government even grasped what they were up to. But once rich, they faced the same life-long burden as their post-Soviet brethren: what Jeffrey Winters, another scholar of oligarchs, calls “wealth defence”.
Every oligarch is always working out where the next threat to his money (or life) will come from. American tech billionaires live in fear of Washington or Brussels breaking up their near-monopolies. Whereas ex-Soviet oligarchs seek favours from government, western oligarchs want governments to leave them alone.
Silicon Valley’s barons may sincerely think that their libertarianism is good for the world. As Jack London wrote: “The great driving force of the oligarchs is the belief that they are doing right.” But this can lead them to intervene in democracy. Jonathan Taplin writes in his new book The End of Reality: “In order to maintain their rule, Big Tech needs political gridlock.” Its ideal is a polarised Congress that can’t agree on any regulations. Big Tech’s next battle may be to prevent effective regulation of artificial intelligence.
In a democracy, oligarchs often select political candidates through donations. Just as Russian oligarchs got Boris Yeltsin re-elected in 1996, Peter Thiel backed Donald Trump in 2016. Oligarchs can also shape opinion by funding media, think-tanks and universities (Charles Koch’s preferred method) and through platforms such as Facebook. Albert Einstein observed: “An oligarchy of private capital cannot be effectively checked even by a democratically organised political society because under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information.”
Musk urged followers to vote Republican in last year’s US midterm elections. Now a consistently rightwing voice, who has called Democrats “the party of division & hate”, he will presumably back Trump for president next year.
Trump was for decades a local New York City oligarch heir who in 2015 made the jump to national oligarch. Both he and his father Fred had habitually donated to New York and New Jersey politicians so as to smooth real estate deals. Trump had also always been the ultimate opportunistic user of temporary allies. When he ran for president, he acted the part of oligarch on TV. He also spent perhaps $66mn of his own money on his presidential campaign.
Once he became president, his family attempted another oligarchic ploy: converting power into money. The Trumps monetised the presidency. Jared Kushner, Trump’s son-in-law, after spending years as presidential point-man for the Middle East, took a $2bn investment in his private-equity fund from Saudi Arabia’s sovereign wealth fund.
Trump’s role in the storming of the US Capitol on January 6 2021 also comes from an ancient oligarchic playbook. Historically, oligarchs tended to build private armies. In the late Roman republic, writes Winters in his 2011 book Oligarchy, oligarchs often hired discharged soldiers from the Roman army. Then Julius Caesar — who had been backed by the oligarch Crassus — crossed the Rubicon river in 49BC, destroyed the republic with his mercenaries and made himself dictator.
The ensuing Roman empire grew strong enough to dissolve mercenary armies. This is typical: a functional state achieves a monopoly of violence. Putin became popular among many Russians for ending the 1990s era of lawless killings by oligarchs’ hired thugs. Similarly, the US state has so far retained its monopoly of violence, jailing many of the perpetrators of January 6.
Yet Trump continues to contest that monopoly. His attacks on judges, prosecutors, witnesses and rival politicians have provoked death threats against his targets from his supporters. He wrote that Mark Milley, former chairman of the Joint Chiefs of Staff, had committed a “treasonous act” in reassuring a Chinese general at the end of Trump’s presidency about American stability, adding: “In times gone by, the punishment would have been DEATH!” Given the omnipresence of guns in the US, Trump seems interested in mobilising an informal on-call private army.
How do oligarchs fall? Through revolutions (usually communist ones) and big (not small) wars. The Austrian historian Walter Scheidel wrote: “For war to level disparities in income and wealth, it needed to penetrate society as a whole, to mobilise people and resources on a scale that was often only feasible in modern nation-states. This explains why the two world wars were among the greatest levellers in history.” Now the Ukraine war is shaking the oligarch universe.
The Oligarchs’ Grip describes Putin’s invasion of Ukraine as a typically oligarchic attempt to seize an opportunity — like his invasion of Crimea in 2014. Along the same lines, former chess champion Garry Kasparov describes Putin not as a chess player but “a poker player” who is always playing weak hands. “But in poker, even a weak hand can win if you raise the stakes and [your] opponent keeps folding.”
Putin has also followed the oligarch strategy of cultivating and then dropping temporary allies: Wagner group founder Yevgeny Prigozhin, Germany and France, and now North Korea. Lingelbach says: “I would mark the demise of Putin from the day he stops trying these kinds of things.”
Two of the Ukraine war’s leading actors, Prigozhin and Musk, were or are oligarchs of unreliable loyalty — as oligarchs typically are. Prigozhin was the kind of warlord oligarch whom the Romans would have recognised. Musk, though not a battlefield warlord, does control a new form of military material: his Starlink satellites provide battlefield broadband. Last year he famously intervened in the war by refusing to extend Starlink’s coverage so as to let Ukraine make a surprise attack on the Russian fleet. According to The New Yorker magazine, Musk told Pentagon officials he had discussed the war with Putin (something Musk denies). Whether they talked or not, private deals between oligarchs can now change the world.
The war may bring down many Russian oligarchs. Suddenly, they find themselves caught between Putin and the west. Mikhail Fridman is a case in point. Hit by western sanctions, he has asked London’s High Court to let him pay the £30,000 monthly running costs of his mansion in north London, plus a driver’s salary. (Fridman considers public transport too risky.) Hoping to escape sanctions, he has solicited testimonies of support from Russian opposition figures, including one anti-war activist who is in prison. It doesn’t seem to have worked. Fridman moved from London to Israel, but returned to Moscow after Hamas’s attacks of October 7. Returning oligarchs who are Jewish and/or Ukrainian might not find nationalist wartime Russia entirely congenial.
Other Russian oligarchs, like the country’s richest man Andrey Melnichenko, have decamped to Dubai, already a haven at various times for former Angolan oligarch Isabel Dos Santos, Pakistan’s Asif Ali Zardari and Thailand’s Thaksin Shinawatra. Turkey is another budding oligarch haven, says Sergei Guriev, a Russian economist at Sciences Po in Paris who wrote an epochal early paper on oligarchs in 2005, then fled Russia in 2013. “These are places where you don’t need a visa, countries that play the neutral game, and the quality of life is high for rich people.”
David Gigauri, a banker who dealt with oligarchs, says oligarchic service providers are now relocating to Dubai too — presumably at the cost of London’s high-end economy. But, Gigauri adds, Russian billionaires who move to Dubai may be stepping down from oligarch to powerless retired rich person. Many of them only knew how to make money in post-communist Russia, says Guriev.
Those who stayed in or returned to Russia may also now be ex-oligarchs, in that they have lost the independence that is essential to oligarchdom. Putin no longer tolerates autonomous actors, as became apparent when Prigozhin, after marching on Moscow in June, died in a not very mysterious plane crash. Roman Abramovich, who had a personal relationship with Putin for many years until the war broke out, suffered suspected poisoning while attending Russian-Ukrainian peace talks in March 2022. Guriev says: “The oligarchs are suffering materially and psychologically, and in the case of Abramovich, possibly physically. If you ask them, ‘Are you afraid for your own lives?’, they will say — even in private conversations — ‘No.’ But I’m sure they are.”
Now the oligarchs are being replaced by a coterie of Putin’s “appointed billionaires”: his dependent cronies Igor Sechin, Arkady and Boris Rotenberg, and the slightly more autonomous Vladimir Potanin. After Russian minigarch Oleg Tinkov criticised Russia’s war, it was Potanin who bought a stake in his devalued bank. Potanin also bought Rosbank from Société Générale, after the French bank exited Russia. So there is still ample Russian wealth to redistribute, but no longer much power.
Ukrainian oligarchs — some of them old frenemies of their Russian peers — are being decimated too. Many lost assets in war zones. After the Ukrainian state mobilised for war, it obtained a monopoly of violence, dissolving the private armies that the country’s oligarchs used to run. And in 2021, the country passed a de-oligarchisation law forcing them to disclose their assets and stop funding political parties.
Igor Kolomoisky, the oligarch whose channel screened the anti-oligarch TV comedy that pushed Volodymyr Zelenskyy into politics and then funded his presidential campaign, was arrested on suspicion of fraud and money-laundering, which he denies. Zelenskyy has turned against his creator as Putin did against Berezovsky. He had to: western countries will fund Ukraine’s reconstruction and let Ukraine into the EU only if they believe that oligarchs won’t pocket the proceeds.
But Ukrainian policymakers who confront oligarchs know the risks. The former central bank chief Valeria Gontareva, who oversaw the nationalisation of Kolomoisky’s PrivatBank after $5.5bn went missing from its balance sheet, then fled to London, where a collision with a mystery car in Knightsbridge in 2019 put her in a wheelchair. Weeks later, a Molotov cocktail burnt down her house outside Kyiv.
For different reasons, in the US, Lina Khan, chair of the Federal Trade Commission, has had little success reducing the market dominance of big tech platforms. When the FTC sued Amazon last month, markets seemed to shrug it off.
The EU’s stiff anti-monopoly laws might achieve more. However, it’s generally easier for oligarchs to defend their wealth than their power. In a globalised world, they can always find havens where the rule of law for rich people still applies. And, say Lingelbach and Rodríguez Guerra, oligarchs tend to thrive in times of transition and uncertainty like today’s. In that sense, viewed amorally for a moment, they are role models for the rest of us.
Simon Kuper is an FT columnist and feature writer based in Paris
Montage photographs: Alamy, AP, Bloomberg, Getty Images, Instar Images, London News Pictures
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