The following review was first published in Russian in Kontrapunkt.
Doug Rogers, The Depths of Russia: Oil, Power, and Culture after Socialism, Cornell University Press, 2015.
It is estimated that over 6,000 products are made from petroleum. Not just obvious items like fuel but everyday things like clothing, cleansers, tools, medicines, electronics, plastics, and a long list of other hallmarks of modern society. Oil is life not just for so-called petrostates that rely on its proceeds to pack the pockets of the powerful and maintain the obsequiousness of the weak. Oil is modernity itself, and though its presence is reified for most people, petroleum’s materiality is manifest in politics, economy, foreign policy, ecology, culture, and identity. To ignore oil’s dominance, it’s very penetration into everyday life, is to further commodity fetish.
In his meditation on commodity fetishism, Marx labeled the commodity “a very queer thing abounding in metaphysical subtleties and theological niceties.” But once the commodity was understood as a reified object, as a representation, its value turned it into a “social hieroglyphic.” Peeling back the layers of its production, distribution, use, and exchange unveiled a vast network of human relations.
In a way, Doug Rogers’ The Depths of Russia: Oil, Power, and Culture after Socialism performs a similar service. He deconstructs oil—not to uncover its relations of production—but to trace the dispersion of its value in shaping the post-Soviet province of Perm. The corporation, the state, and culture are all manifestations of oil’s materiality, the value of which is produced and reproduced in a long social chain. Breaking down the various reifications is to etch closer to a totality of the region.
But the value of Rogers’ text runs much deeper. Unmasking oil allows for a revision of how crude, the corporation, and the state interlock as a form of neoliberal governance. Rogers tentatively hints in this direction but hesitates. As he rightly states, “The insights thus generated would, I think, be obscured by an effort to unite everything under the theoretical sign of the neoliberal.” This avenue is, nonetheless, worth examination.
Black gold presently serves as Russia’s life blood. Russia is currently the world’s third largest petroleum producer behind the United States and Saudi Arabia. A production agreement with just one of them can sway crude’s price on the international market. Oil, along with natural gas, is also integrated into Russian foreign policy. Through a combination of subsidized prices and control of the output and transit lines, Russia can exert its will over its neighbors, albeit with limited political profit as recent years have shown.
Moreover, petroleum has been the fountainhead of the Putin model’s success. Russia’s federal budget is pinned to the price of crude, where oil and gas amounted to 36 percent of its inflows in 2016. High oil prices in the early 2000s subsidized Putin’s Russia by feeding key boyars with high rents, regional potentates with slush revenue, and the public with fat budgets.
But like any drug, addiction to oil has limits, and Russia’s current economic sloth combined with Atlanticist sanctions testifies to this. Granted, Putin’s government has gradually weened its dependence on black gold but economic diversification in the era of globalization is no easy matter. Besides raw materials, Russia makes very little that the world wants. On the surface Russia appears as a prime candidate for the 21st century budding capitalist state: authoritarian and eager to do business. Lax labor laws, restrictions on unionization and worker resistance, slack environmental laws, and favorable corporate taxes offers much titillation to multinationals. Russia, however, also appears more trouble than it is worth. It suffers from decrepit industrial infrastructure, a too skilled and educated workforce, and too much corruption. Then there’s its international standing among other great powers as a pariah. It’s not China or the more pliant small states on Asia’s underbelly ripe and ready for international capital’s ravage.
Yet despite the centrality to present day Russia, oil’s history has yet to be written, and its place in the Imperial and Soviet empires has received only tacit attention. While there are recent and notable histories on how oil bound the Russian/Soviet empire’s periphery to the metropole, the question of oil in Russia and other post-Soviet states remains mostly the purview of the presentism of political science or journalistic chronicle. Thus, scholarly treatment of oil has yet to drill into the depths of its reification. Piercing the layers of oil as a fetishized commodity remains skin deep.
Most scholarly literature, therefore, follows petroleum’s boom and bust parabolas as metonymy for political power in Russia. A selection of respected Anglophone titles reveals much: Marshall Goldman’s Petrostate: Putin, Power, and the New Russia; Martin Sixsmith’s Putin’s Oil: The Yukos Affair and the Struggle for Russia; and Thane Gustafson’s Wheel of Fortune: The Battle for Oil and Power in Russia. Putin, battle, struggle, and power receive prime focus (Rogers, too, has power in his title, but his is a small-p power that’s more Foucauldian than a prize in palace intrigue). Putin’s power was built by crude and it will likely die by crude. Thus, diagnoses or speculations of when the Putin system will finally succumb to the “Dutch Disease” are a mainstay of the discourse. This is accompanied with dramas of elite power grabs and political battles, fallen heroes, ascendant villains, turning points, lost causes, derailed hopes, and missed opportunities in Russia’s capitalist transition. Russia and oil share a dramatic arc in which we in the audience wait patiently for the deus ex maschina to end this sordid affair. Interwoven in the anticipation is the faith that when Russia kicks its oil addiction it will also shed its authoritarian urges and march toward the bright liberal capitalist future.
Surprisingly, Rogers notes that oil’s present day importance is a rather new phenomenon. The Soviet oil complex, its commissars and laborers only occupied a middling role in the Soviet economy. Soviet oil production didn’t catch up its Cold War rival until the 1970s in large part thanks to the maturity of the Volga-Ural fields, the Yom Kippur War and the OPEC embargo. In Perm, this transformed agricultural towns like Osa, 125 km south of the regional capital, into booming oil towns. And with the disintegration of the Soviet Union, oil turned into a site of capital circulation and private capture.
Rogers’ materiality of oil in post-socialist Perm is an important revision of the standard narrative of the unmaking of Soviet life. The collapse of Soviet system of centralized planning and distribution broke the vast network of links in a long economic chain. Enterprises, and those in Perm were not alone, had to develop new networks to manage of the movement of goods. Moreover, Russia’s market transition occurred without money as the universal equivalent. At first, oil was one of many goods used for barter in Perm to the point where by the late 1990s, crude became the region’s main sovereign currency. And, ironically, oil as currency was more a mark of stability than the fluid, topsy-turvy paper ruble. Oil was “framed as concrete, reliable, local, tangible, and nongeneralizable.” Thus, in the wild days of Permian capitalism, oil was a key additive in an economic alchemy that turned oil into sugar, apples, jackets and Toyotas. Oil as a commodity only became more fetishistic. As Evgenii Sapiro, the founder of Perm’s Commodity Exchange, recalled of the oil exchange circuit in 1990s Perm, Marx’s “foundational formula money-commodity-money is unidirectional and primitive. [The Perm Financial-Productive Group] practiced a quite ordinary formula: money-crude oil-oil products-roundwood-processed timber-packaging timber-apples-money.”
Moreover, the stretching of Marx’s C-M-C into an increasingly mediated chain of exchange gave oil a regional flare. Every transfiguration of oil linked regional businessmen, their businesses, and Perm’s local administration. Oil’s profits were mostly kept and circulated in Perm rather than being sucked out by Muscovite Varangians. Such localism, Rogers keenly notes, had crucial effects on the emerging post-socialist state: oil was key in distancing Perm from the federal state and the concurrent rise of a regional power elite. Moreover, all this was done prior to oil’s privatization and vertical integration that were standard hallmarks of the 1990s and 2000s in Russia.
A key component in Perm’s increasing autonomy from the federal center were veksels, promissory notes that function as short-term currency to pay down debts or conduct business to business transactions. Interestingly, these veksels weren’t issued by banks or local government but by oil enterprises. And though they were initially intended for the Perm oil industry, veksels quickly ran the gambit of the regions exchange network. Indeed, one local newspaper estimated that a veksel went through an average of forty hand-to-hand transfers that included the oil industry, local government, farmers, schools, and various social welfare agencies. Yet while the veksel was an abstraction of debt, Rogers argues that it exhibited materiality as it passed through the Perm exchange networks. “[Veksels] continued to make debts, obligations, and social relationships far more material, visible, and concrete than the abstractions of monetary currency.” Except this currency didn’t bind the consumer to the state. Rather, all exchanges drew users back to a different guarantor: Lukoil-Perm.
The Lukoil-Perm’s societal role, however, went beyond a pivotal node in Perm’s economic and state budgetary network. The oil giant also stood at the center of local state building. As Rogers notes, Lukoil-Perm was intimately involved in the “direct governance of human social and cultural life” in post-socialist state building. This state building was neoliberal in concept and execution. Rather than simply allocating state funds to state agencies to manage social and cultural life, the Perm administration and corporations like Lukoil sponsored grant competitions to empower individuals and non-government organizations to address societal problems. The identification of local problems had a decidedly neoliberal and biopolitical edge. Grant seekers were encouraged to identify a “problem” in their locality and design a “project” to address it. “Problems” were not the structural shortcomings of Russia’s political economy. Rather they were individualized “difficulties,” “discomforts,” and “that which does not suit a person in his or her life.” Projects to address problems comprised of teams, plans, setting achievable goals, budgets, auditing and reporting. Lurking behind these grants are elements of the neoliberal state: the outsourcing of governance, budgetary streamlining and efficiency, developing stakeholders, and turning structural deficiencies into merely things that make individuals uncomfortable and incompatible to one’s individual life. Lukoil-Perm and its subsidiaries were key sponsors and funders of these grant competitions.
The practice of enterprises providing resources for social and cultural institutions does have a Soviet antecedent. In the Soviet period, factories provided in-kind services to its surrounding communities. This was especially the case in monotowns were factories provided many staples of modern life: electricity, water, and heat. Also under the banner of shefstvo or patronage, factories sponsored cultural and social events, productions, and entertainments for local communities.
Lukoil-Perm’s sponsorship resembles shefstvo but to a point. Today, corporate social and cultural sponsorship falls under “corporate social responsibility,” where corporations try to mitigate public criticism, labor exploitation, and social and environmental damage by buttering up its image in the form of “giving back.” Moreover, in the Soviet case, the factory was the state whereas now the private corporation stands in for the state. Critics often mistakenly see a shrinking social state as emblematic neoliberalism. But as Rogers’ study of Lukoil in Perm reminds us, neoliberalism is more the transfer of governance into private, typically corporate, hands. Like backing veksels, Lukoil and companies like it become the guarantors of social and cultural life. And through that guarantee, the materiality of oil manifests. Oil becomes life.
“What’s good for Lukoil is good for the region,” declared Evgenii Sapiro in 1996, then as speaker of Perm’s regional Duma. It’s doubtful Sapiro realized just how prescient his echo of Eisenhower’s quip about General Motors was. But Lukoil’s “good” for Perm isn’t just because it provides employment and tax revenue. It’s also because Lukoil is so efficient in making oil into one of Marx’s “very queer things,” that petroleum’s specter haunts even the most unsuspecting corners of Perm’s social and cultural life. But oil’s materiality will continue undetected if the story of Russian crude remains at the level of the throne. Luckily, Doug Rogers has given us an initial glimpse into just how deep into Russia oil really flows.