Jul 16 • 44M

Spin Dictators

Yascha Mounk and Sergei Guriev discuss the rise of a new kind of dictator and the future of Russia’s economy.

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Sergei Guriev is a Russian economist. He serves as provost and professor of economics at the Instituts d'études politiques (Sciences Po) in Paris. From 2016 to 2019, he was the chief economist at the European Bank for Reconstruction and Development. He is the co-author, with Daniel Treisman, of Spin Dictators: The Changing Face of Tyranny in the 21st Century

In this week’s conversation, Yascha Mounk and Sergei Guriev discuss why Russia’s economy failed to modernize over the last two decades; why sanctions on the Russian economy have not been as effective as hoped; and how to fight back against spin dictators (and other authoritarian leaders).

The transcript has been condensed and lightly edited for clarity.

Yascha Mounk: There's a line that people go bankrupt very slowly, and then all at once. It strikes me there's a similar phenomenon with dictatorships and the way in which they quash the freedoms of people. 

As somebody who's always been speaking out for liberal values, who is a liberal economist, who lived in Putin's Russia for a very long time before finally leaving in 2013, perhaps you can tell us what those changes were like in the first years of Putin's reign. What changed between the turn of the millennium and 2013, when you left the country?

Sergei Guriev: I fully agree with you that in many societies, this transformation is gradual. Step-by-step, the government takes away various freedoms. And it's a bit like this in Martin Niemöller's poem: “When they came for socialists, I didn't speak out, because I was not a socialist.” 

And so they go one by one: media, courts, business people, civil society. And then at some point, you discover that the freedom space has shrunk so much that this is no longer democracy. For every person, the red line is different. And you can see that the regime qualitatively changed in 2014, when it attacked Ukraine for the first time. And when Putin actually closed down all the remaining independent media and declared Meta—the American holding company of Facebook and Instagram—an extremist organization. You can think about 2020, when Putin changed the constitution, and announced that he was able to run for another two six-year terms; or 2020, when Navalny was poisoned. For me, it was several things at once. When Putin came back as a president in 2012, he started to eliminate whatever hopes emerged during Dmitry Medvedev’s presidency, with the protests in Moscow and other cities in 2011. This assault on freedoms also touched people like myself who spoke too much about the importance of political institutions for economic development. As an economist, I first and foremost spoke about economics. But in a country like Russia, economic development requires property rights protection, political competitions, checks and balances, fighting corruption, rule of law—everything which depends on politics. And so that is when I encountered my share of problems. 

I eventually discovered that Putin, investigators and interrogators wanted to take away my freedom. I was warned to leave. Common friends told me that Putin is extremely unhappy, and unless I left tomorrow, I may not be able to do it at any point later on. And so I just bought a one-way ticket and left. For me, that was the line. And we don't know what would have happened. But I guess for every single person, it may happen sooner or later—the oil tycoon Mikhail Khodorkovsky, the richest person in Russia, was arrested in 2003. The independent channel NTV was pretty much destroyed in the first couple of years of Putin's rule. 

Mounk: This is a universal question that always comes up in the context of who ends up going along with a dictator and who doesn't. Elvira Nabiullina, the governor of the Central Bank of Russia, is playing a key role in helping to prop up the regime. She is somebody who, as I understand it, worked for a set of international institutions in the 1990s and was seen as liberal economist for a long time. What determines that she is on the side of making Putin's war economy work, while many of her former friends and acquaintances have fled the country?

Guriev: I knew Elvira Nabiullina for about 15 years. She is greatly respected, including in the central bankers’ community, which is a very international—meritocratic, I should say—community around the world. Even after [the Crimea invasion of] 2014, she would be invited to major IMF and central bank meetings around the world and praised for good monetary policy. Yet she made her choice, deciding that she wants to make sure that the Russian economy is run well. 

It goes back a bit to the political philosophy of Hannah Arendt, about smart people who were not maniacs, who just didn't think about certain issues that brought them to the wrong side. For me, it was always very clear that I cannot be part of the system. She believes that by sticking around right now, she is helping ordinary Russians, because if she's replaced by somebody less capable, Russians will suffer from inflation and economic meltdown. She feels she is trying to save ordinary Russians. I disagree with that. 

Whatever Nabiullina does to increase the resource base of this regime doesn't go to Russian teachers or pensioners or students, it goes to pay for the war in Ukraine. It goes to finance killing ordinary Ukrainians. This mental step is very hard to undertake because it's very self-critical. You need to tell yourself, “My country is bad, and when I help my country, I'm actually helping kill innocent people.” Some people think by doing their small thing and improving one particular part of policy space, they are helping ordinary people. The problem is, when Russia makes more money, it's not that Russian pensioners are getting more money. It's that Russian generals and soldiers are recruited to kill Ukrainians. That's how it works. And this is what people who don't think about political economy, political institutions, and political philosophy don't understand, and make this horrible mistake.

Mounk: Many people assumed that the pretty severe sanctions that Russia is now under from the West would have a very strong impact on life in the country, that the ruble and the stock markets would crater in a lasting way, and that this would undermine Putin's war effort. 

At least so far, that does not seem to have been the case nearly as much as people expected. Is our view of the Russian economy, or the West's ability to impose significant financial sanctions, wrong?

Guriev: The sanctions do work, but some in an unexpected way. On the third day of the war—when the US and EU together imposed sanctions on the Russian Central Bank, and froze the Russian government’s stock of dollars—that was a major hit, which was followed by certain macroeconomic turbulence. However, afterwards, oil prices were so high that every day Putin earned more and more dollars, replenishing the resources he had to finance the war. And in that sense, it's not surprising that with such high oil prices, the ruble became stronger. But the ruble also became stronger because of something which was not expected. The Western allies imposed export controls on Russia, so it's much harder for Russia today to import advanced technology. That was expected. What was not expected was the private sector’s voluntary boycott and exodus. We have about 1,200 companies which exited and broke all the links with Russia. Imports from the West to Russia collapsed much more than anybody expected. And this was something which was not dictated by the governments in the west. It was done by the private sector and the reputational pressure. This unexpected shock to Russian imports actually increased the value of the ruble because if you don't have any imports to spend your dollars on, you don't need the dollars. Dollars become cheaper, and rubles become more expensive. Russian imports collapsed by about a factor of two. And this is not just luxury goods (although those are included) but stuff which is needed to produce cars, modern tanks, high-precision rockets, and to repair planes. So, interestingly, while the Russian economy is hit, the ruble is stronger than it was when the war began. But this is not something which reflects the strength or competitiveness of the Russian economy. It is a side effect of the collapse in imports which, per se, is a negative shock to the Russian economy. 

The Russian economy is not in ruins, but it's going through the worst recession in 30 years. So in previous crises—2008-2009, 2014-2016, and in 1998—the shocks were not as big as this time around. You may call it “catastrophe” or “disaster.” You may call it a very deep recession. But the truth is, the Russian economy is going through a very, very difficult time. Some industries are hit really badly. The Russian automotive industry produced less than 4,000 cars in May. Production of cars in Russia has collapsed by a factor of 30. The automotive industry is a global industry; you cannot produce cars if you don't import anything. It is the same with the aviation industry. But overall, the national economy has taken a hit, but has not been destroyed. It's not a Soviet economy, but a market economy. It has adjustment mechanisms. In that sense, the Russians are suffering. But it's not like the Soviet economy, which just fell apart in 1991. We don't expect that. On the other hand, it is also clear that sanctions will reduce Putin's ability to launch a war in, say, two years’ time. They also hit Russians’ real, inflation-adjusted incomes. So there will be an accumulation of unhappiness over the next months or years.

Mounk: What should the goal of sanctions be in relation to Russia, and what can we realistically hope that they will achieve?

Guriev: Different people evaluate sanctions in different ways, because they also assume different goals. Sanctions against Iran were intended to change Iran's behavior and bring Iran to the negotiating table. By that account, sanctions have succeeded because the deal was signed in 2015. This is usually the goal of sanctions: to bring the violating party to the bargaining table and negotiate a deal, or to deter something or to change behavior. Now, Russia is a separate case, because here sanctions no longer can deter or threaten Putin, who has since doubled down. He showed that he doesn't care about the economy. He doesn't care about the facts I just mentioned—that Russia doesn't produce cars any longer, or Russians can no longer fly to Europe; that Russians cannot buy IKEA or McDonald's. What Mr. Putin cares about is whether he can continue the war against Ukraine. And the goal of sanctions now is actually to limit his ability to kill Ukrainians, or for that matter, any other people in neighboring countries, which may be his next war. Sanctions are now trying to reduce the amount of resources he has to launch new wars or to continue this war. That's a completely different goal, and by that measure, I would say sanctions are succeeding. As I mentioned, he cannot produce modern tanks or rockets because he needs semiconductors and high-grade steel. He needs jet-powered engines for planes. All of that is produced in the West, and Chinese substitutes are not great. On top of that, the sanctions targeting his revenues are very important: he cannot announce martial law or mass mobilization, because that would be highly unpopular, so instead he’s paying the soldiers to recruit them. They’re usually from poorer parts of Russia, people for whom these amounts are an order of magnitude higher than their regular wage. He needs cash, and until we have an oil embargo in place, which kicks in only in December, he has the cash. Oil prices are high and he keeps selling oil and gas, so he has this cash to continue fighting this war. The oil embargo will be a game-changer.

Mounk: Let's change gears a little bit. You have a great new book with a colleague, Daniel Treisman, called Spin Dictators: The Changing Face of Tyranny in the 21st Century. The basic observation is that the most famous dictators we might think of in history used force and violence in a very straightforward way. But today, we have a new crop of authoritarian rulers who are a little bit more subtle, who appear to have more democratic legitimacy, who are much more conscious of how to use certain forms of public relations in order to make themselves look good. What differentiates a spin dictator, on the one hand, from the old crop of dictators (who also have their propaganda machines), and on the other hand, from populist politicians within countries that remain democratic?

Guriev: Spin dictators are dictators—that's very important. This is what differentiates them from democratic countries. In political science, as you know, democracy is a regime the rules of the game of which include electing leaders and policy policies, electing leaders and choosing policies through fair, competitive, and free elections. Spin dictatorships may have elections, but those are not free and fair. They may deny that they have censorship, but they do. Even if you have a democratic facade, this is a dictatorship. But the distinction between the new style of dictators and the old style is that the old dictators were proud to be dictators. They openly said, “We have propaganda, we have censorship, we have ideology, and we terrorize our citizens.” New dictators say, “No, we are democrats. We don't wear military uniforms, but civilian suits, like democrats. We even speak like democrats.” In our research, we show that the actual content of speech of spin dictators is identical to the content of speech of democratic leaders, and significantly different from those of old-style dictators. Spin dictators do censor, but they do it in a deniable, covert way. They co-opt media owners. They sometimes quietly threaten journalists. They harass opposition leaders, but not on political grounds. It's very common to put your political opponent in jail, but as a tax evader or a fraudster. In Turkey, they jailed a Kurdish politician on a charge of faking a medical certificate.

Even to this day, the Russian constitution actually bans censorship, even though nobody has any doubts that Russia has censorship. The Soviet Union had a big censorship ministry, with thousands of people employed to read and censor everything from newspapers to plays. And that's the difference: pretending to be democrats or proud to be dictators. But we can measure violence. We look at numbers of political killings and political prisoners, and if you want to deny that you're a dictator, and you terrorize your population, you basically have to use limited violence. Because if you kill too many people, that is observable. Current dictators are much less violent because they want to hide and deny violence while Hitler, Stalin, Mao, and Pol Pot would kill people by thousands and tens of thousands—Stalin, actually, by the hundreds of thousands.

Mounk: Let's discuss the relationship between populists in democratic regimes and spin dictators. My sense from this conversation is that authoritarian populists—who think that they alone truly represent the people and that anybody who disagrees with them is, by virtue of that fact, illegitimate—are always, to some extent, aspiring spin dictators. If they really get their way, manage to stay in power for a long time, and overcome the resistance of the institutions that they consider illegitimate, they would wind up being spin dictators. Is that fair as a one-to-one relation, or do you think that there are deeper differences between, say, Donald Trump and Silvio Berlusconi on one hand, and Viktor Orbán and Recep Erdoğan on the other?

Guriev: In general, this correlation exists. The stories of early Erdogan or Orban are essentially a populist who destroys checks and balances, citing their illegitimacy. “Why do we need checks and balances if all the good people are the same, and they are all like me? You just need one person—me. I will represent you. Why do you need parliaments or judges?” And then eventually you go through this process (which Putin has gone through as well), and you build a spin dictatorship. But in the process, you continue to pretend to be a democrat. In some cases, it doesn't work. Some populists never manage to remove democratic institutions. A lot of people would call the Greek party Syriza left-wing populists. They were in power. They lost the election, and they stepped down. On the other hand, you also have seen dictators who were not populists; Lee Kuan Yew was definitely not, and we count him as one of the pioneers of this particular regime. Nursultan Nazarbayev, Kazakhstan's leader, was definitely not a populist, and he was one of the most successful. He's no longer president and his family's kicked out of power, but he built a country and ran it for thirty years. He was also quite a successful spin dictator. So there is no one-to-one correspondence, but this trend you're describing is very salient, and many populists actually try it. 

Together with his two co-authors, my colleague at Sciences Po Moritz Schularick wrote a paper tracing the economic performance of populist leaders for the last 100 years. He looks at the evolution of institutions after populists come to power and on average, if you have a populist in government today, you should expect that rule of law will be undermined, media freedom will be suppressed, and the populist will not step down after the term expires. They will try to grab power and undermine checks and balances. So this is completely normal, but there are exceptions as well.

Mounk: So there are many ways of becoming a spin dictator: you might inherit a post-Soviet state; you might, perhaps, even come to power as a founder of a state. And being a populist, as in the case of Hungary or Turkey, is only one way towards power. 

But what about the inverse claim? Are there other examples of populists who manage to retain power, and don't turn into spin dictators, or is the goal of every populist (whether conscious or not) to turn themselves into a spin dictator, in your terminology?

Guriev: There are sometimes external constraints. I mentioned Greece, where there was an important role for external creditors who constrained what the Greek government could and could not do. Consider the democratic populists in Latin America who—whatever they wanted to do—would be kicked out because of incompetence in macroeconomic policies. I'm actually really worried that we may have populists in democratic countries like the United States, where somebody like Trump would love to do something like this. In that sense, yes: politicians always want to stay in power, and in democratic countries, populists want to destroy term limits and checks and balances. Since they start as democratic leaders, they're more likely to remain in power as spin dictators rather than fear dictators. 

And there is a reason for this: spin dictatorships are now so numerous because this model is a better fit for the modern global economy. If you're a populist leader who wants to become a dictator, it's probably a better idea to pretend to be a democrat. Why? Because whatever we say, democracy is still very popular. There are many people who don't like democracy, but nobody wants to live in Nazi Germany or Stalin's Soviet Union anymore. You may want to move from a parliamentary to presidential republic, but you don't want to live in a place with mass repression. People would rather live in a democracy, so populists who want to become dictators wish to pretend to conserve their democratic institutions.

Mounk: I agree with that. In fact, one of the reasons (and that was perhaps implicit in my earlier question) that I'm very resistant to calling somebody like Trump a fascist is that it actually can make us too complacent. If someone were running on an openly anti-democratic message—as many totalitarians in the 20th century did—I don't think that they could win power in the United States of 2022 or 2024. And I don’t think they would be reelected if people knew that that's what they were up to. One of the very smart adaptations of populism is to say, “No, I am the true democrat. In fact, I'm fighting against people who are really anti-democratic, so if you care about democracy, you need to vote for me.” Obviously, that's not something that I believe to be accurate; it's certainly not something that influences how I would vote. But it is a much more powerful way of gaining power and gaining that democratic legitimacy in the first instance. And that's why I think thinking of these movements as fascist is not only wrong as a matter of political science, I think it is wrong as a matter of understanding what power it has, and therefore how to fight against it. 

What is the end game of spin dictatorship? At the beginning, perhaps you have some real legitimacy, and so you can retain your power through these mechanisms to talk about, but at some point, there's going to be a crisis of legitimacy: a severe economic crisis or some popular protests. And at that point, it seems to me that you sort of have two choices: accede to that unpopularity and leave power, or ratchet up repression and violence. But if you do the latter, at some point, you pass the point of being a spin dictator, and become a dictator, because you're shooting at the crowd and jailing enough of the opposition politicians that nobody is fooled any longer. Is spin dictatorship a phase which eventually has to resolve into a return to more democratic institutions or a much more openly dictatorial regime, or is it possible to sustain a spin dictatorship for many years?

Guriev: We think about this as a phase which, indeed, may transition to democracy, but may also go back in history. One well known example is, of course, Venezuela, where Chávez was a charismatic spin dictator; his successor, Maduro, is a classical repressive dictator, and this is where you can see how the regime goes back in time: he destroys the economy, destroys the country, but still is in power. If somebody told me ten years ago that the economy could shrink by a factor of four or five, 20% of the population would leave, and still the regime would be in power, I would be surprised. But we have totalitarian regimes like North Korea, Syria, and Venezuela that are quite persistent. But spin dictators are just better suited for today's reality. 

They are much better in terms of, for example, attracting foreign direct investment. If you're getting a call from North Korea, maybe your board of directors will not be very happy, right? But if you get a call from pre-war Russia, many investors would say, “Well, they do have elections. They do have some opposition.” (Especially before poisoning Navalny). “They do have independent media. This is not a perfect democracy, but it's not North Korea.” This is what helps those regimes to have more resources, be more competitive, and survive longer. But eventually they do face the problem that you mentioned: in order to grow economically they need an educated class. Today's economy depends on people with tertiary education, the creative class, people who know what's going on in the world, so they can import technology and develop their own technology. These are also the people who understand that you are not a democrat, and so the more people like this are around, the more difficult it is to silence them through selective repression. As you rightly said, you may have to repress so many that it gets out of control, and you go back in time. 

We started with Russia. This is just what happened to Russia. You can say that this transformation was completed in 2022, when Putin went to war probably hoping that he would be able to preserve the spin model; he would have a short victorious war, like he had in 2014. He would still allow for independent media. There would be no outright censorship of Facebook. But he saw that it didn't work, and he had to close down the independent media and introduce wartime censorship. A conversation like we are having now in Russia will be punishable by up to 15 years in jail, and some people are on their way to 15 years in jail as we speak, unfortunately. Does this mean that this transformation is inevitable? The answer is no. There are mainly spin dictatorships that transition to democracies—one example near Russia would be Armenia, in 2018. A spin dictator wanted to stay in power. He lost, and the opposition leader, just through mass protests, came to power. Armenia is now a democracy.

Mounk: I think this sets up my last question nicely, which is, what does your concept of spin dictatorship teach us about how to resist aspiring spin dictators, and how to resist actual spin dictators? If the tools of power that they use are different, what does that mean for the kinds of tools that the opposition has available to them, and for how to best make use of them?

Guriev: The first answer to this question is to be watchful, to be careful, and to understand that these are dictatorships, not democracies. So whatever they say about themselves, whatever suits they wear, however often they travel to Davos, you know that these are not democracies, because they are not running free and fair elections. They control the media. They spin the narrative like spin doctors in democracies, and their political opponents do not face the same chances when election time comes. Another thing is these regimes are very likely to export their own corruption and to interfere in their neighbors’ affairs via Western political institutions as well. These regimes are, by nature, likely to be corrupt and likely to export corruption. And so the Western countries should think about fighting their enablers at home. If corruption is not uncovered, their enablers help change Western policies in those dictators’ favor. If corruption is uncovered, the spin dictators come back home and say, “Look! The West is also corrupt. There is nothing better than our model. We may be imperfect democracy, but the West is a corrupt democracy as well.” Whenever there is a narrative which helps them, that is something that should focus the minds of the West. I know you're writing your books a lot about putting the Western house in order—this is good for the West. But it's also good for pushing back the narrative of spin dictators. If you have inequality, discrimination, problems at home, that's good for spin dictators' narrative in their countries. And so putting your own house in order actually helps to win that war. Another frontline that we discuss in the book is international organizations. These guys care about trying to capture international organizations. We recently saw the role of Erdoğan in NATO and Orbán in the European Union. A couple of years ago, we saw an attempt by China to capture Interpol. All of this must be really, really carefully thought of, because these regimes pretend to be democracies, and so they try to abuse the tools of the democratic, liberal rule-based global order. We need to remember that it is in their interest to hijack the institutions the West has built. 

One thing I would mention is, the West should not fully isolate those regimes, because they are in trouble. Within the regimes you have a growing educated class and civil society. These citizens should be supported, provided information, and educated—that is eventually the root of the spin dictators’ own decline. And in that sense, engagement with the civil society of those countries, whenever possible, is a great idea.

[See also: Moisés Naím on The Revenge of Power]

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Podcast production by John T. Williams and Brendan Ruberry. Podcast cover image by Joe O’Shea.

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