Did the move to the free market unleash Russia’s demons?

Back in 2009 on an unseasonably warm autumn evening in Moscow, I was walking to dinner with a banker friend, a former British army officer with whom I’d bonded over a shared interest in history. At the time, we were both advising a large Russian bank which had recently listed its stock in London, and were irritated beyond measure to see its share price tanking, despite a booming Russian economy and it having no exposure to the American sub-prime mortgage market.

As we crossed Mayakovsky Square, I blurted out almost without thinking; ‘You know the last time we had a financial crisis like this one, it ended up in a war.’ Germany, we agreed, no longer posed a threat. But here we were in the capital of a former imperial power that had been humiliated and partially dismembered, experienced financial collapse, mass unemployment and hyperinflation, and was now in the hands of a dynamic new leader who was centralising power around himself.