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What may keep Putin up at night

Russia's economic future looks bleaker after the invasion. Just ask its oligarchs.

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Oh, to be a fly on the wall next month at the annual "summit" of Russia's richest capitalists and Vladimir Putin. Will the oligarchs tell the modern-day czar, "Bravo on invading Georgia!" Or might they whisper, "Watch out what you do to our economy." The latter would be smarter.

Soviet leaders during the cold war never had to deal with pesky capitalists when they rolled tanks into other countries. In today's Russia, Mr. Putin may sit on gushers of oil money and he has co-opted the business class to his authoritarian rule, but he must still live with Adam Smith's invisible hand.

Markets do react to unpleasant facts, such as other peoples' fear and resentment of Russian bullying. And since the invasion, markets have sent a clear signal of Nyet. Many investors – both foreign and domestic – are fleeing Russia. Its currency reserves and stock market have plunged in recent weeks. And that's on top of the West's warning that relations with Russia will not be "business as usual."

The West's victory in the cold war was as much about saving free markets as it was defending democracy. While Putin, a former KGB agent, has rolled back Boris Yeltsin's post-Soviet democracy, he'll have a harder time in a globalized world using his political judo to control Russia's markets and its rising dependency on the West.


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