Michael Hudson analyses Putin's arrest of oligarch Khodorkovsky, Russia's richest man: "The question now being asked is whether the oligarchs will sell off ownership of Russia's natural resources to the West as they bail out of Russia, or whether the nation will rescue itself from the insider privatizations by recapturing the revenue and wealth taken by the oligarchs. In the West one hears mainly of reversing and renationalizing the giveaways of the 1990s. But in Russia itself Sergei Glaziev, Dmitri Lvov and other economists are proposing a rent-tax to recapture the oil and gas, land and mineral rent for the economy."

"Mr. Putin governs in much the say that Franklin Roosevelt did. Roosevelt was famous for appointing cabinet members and aides with sharply divergent views... Roosevelt simply wanted to hear both sides of the major issues. He wanted his advisors to "duke it out." And they did."

"But Putin also has another set of advisors. One rising light has been Sergei Glaziev, an early market reformer already before 1990 but opposed to Yeltsin's coup d'?tat in 1993 and the "shock therapy" of "grabitization" that followed. He subsequently saw that a least distorted way for Russia to recover was by a tax on economic rent, that is, the value of land and natural resources that exists independently of labor and capital investment. The aim is to untax industry and labor, and make Russia's natural resources monopolies finance the government. But these are precisely the assets that Yeltsin's kleptocrats were the first to grab. So this intellectual policy fight has now been raging for a decade."

"On December 23, Putin gave a speech to Russia's Chamber of Commerce without mentioning Yukos but clearly referring to it. He reassured his audience that he didn't intend to reverse privatizations, but reminded them that everyone had a chance to follow the law in the 1990s, and it wasn't fair to let those who played by the rules end up losing out to dishonest grabbers. Inasmuch as nearly all the privatizations involved fraud under the anarchic conditions that Yeltsin's neoliberals created, applying lawful standards would seem to imply a reversal of at least the most blatant privatizations, or a demand for enormous fines and paybacks. The implicit threat of this speech was that if any other oligarchs got out of line, their fate would be that of Mr. Khodorkovsky and other Yukos stockholders."

"Mr. Khodorkovsky's fraudulent activities were so blatant that it is amazing that the Western press has been so lax in reporting them. In fact, the fury with which Bush Administration officials and even the normally liberal media have criticized Russia's government for the Yukos arrest reflects the degree to which they backed the kleptocrats from the outset, recognizing that in the end these individuals would cash out their gains by selling Russia's natural resources at prices still so low as to be nearly giveaway prices. The U.S. fear is that now the financial takeover of Russia may be interrupted, and that Western investors may have got all they are going to get."

"The point of this is not to attack Khodorkovsky. It is to make clear that virtually everything he did was directed, supervised and monitored by the very people who are now attacking him... So there is no point in extrapolating from the fall of Khodorkovsky a great animus against 'oligarchs' or 'privatisation'. That isn't what this is about. This is about a man who knows where all the money has gone; who knows who have been the beneficiaries of the greatest money-laundering scheme in the history of the world. If such a man decides to go into politics he is a danger."

"Mr. Khodorkovsky's arrest is not the start of a campaign to 'get the rich' ... We are witnessing the final death agony of the kleptocracy that was Boris Yeltsin's Russia... When you buy state assets in such a dubious backroom deal and at such a steep discount to market, chances are your property rights will never be truly secure. You will always be regarded by the population as a crook and by the government as more of a custodian of state assets than an owner... his arrest certainly looks like a case of selective justice ... but this is still better than no application of justice at all. During the Yeltsin era, well-connected businessmen could routinely embezzle millions from the state treasury or even organize the murder of rivals--all without the prosecutors making a squeak. The result was relentless economic decline and the collapse of the ruble in 1998."

"Putin has not yet moved. An amnesty to Yeltsin's Family and other privatizers would doom Russia to deteriorate into one of the most polarized and impoverished nations in the world. On the other hand, to reverse the privatizations would mean a fight with the United States which had sponsored the "reformers" and their rip-offs from the outset, going back to Yeltsin's military attack on the Duma in 1993 and subsequent seven years of rule by dictatorial decree."

"That is always the important question to ask: "Why just now? Why right at this time?" The explanation almost always is that political action is taken to protect against some imminent danger. To start with, Mr. Khodorkovsky violated Mr. Putin's insistence that the oligarchs stay out of politics. They were about to buy up the Duma and use their power to destroy the powers of the presidency, that is, of Mr. Putin himself. This is the strategy of neoliberalism. It is a two-stage process. The first stage is to make use of centralized state power to promote insider dealings and give a patina of legitimacy to the theft of public resources. Most of the great fortunes have been obtained in this way, including the aristocratic holdings stemming from the Norman Invasion of England in 1066.

"The second stage involves closing ranks to prevent anyone else from doing this, once the prizes have been handed out. A campaign is mounted against government power to reduce and even eliminate the state's ability to exert a countervailing force on the propertied oligarchy. The narrow oligarchy becomes society's new centralized planners, replacing the state. Russia is now in this stage, and the oligarchs are trying to mobilize popular support against the government--while Putin for his part is turning populist to mobilize support against the oligarchy."

"The oligarchs were starting to cash out, selling their holdings for dollars, sterling, real estate, British soccer teams and so forth. Their move to the West would have insulated them from future fiscal and criminal prosecution from within Russia... Legally [a tax on rent] could have done so. But politically, taxing economic rent has become the b?te noir of neoliberal globalism. It is what property owners and rentiers fear most of all, as land, subsoil resources and natural monopolies far exceed industrial capital in magnitude. What appears in the statistics at first glance as "profit" turns out upon examination to be Ricardian or "economic" rent."

"What finally enraged Mr. Putin was a willfully arrogant act by Mr. Khodorkovsky and his Yukos insiders.. an extraordinary $3 billion dividend distribution, an increase of 400 percent over the previous year. Rather than using this money to modernize their oil extraction or invest in the industry, they were simply stripping the company's assets before letting it go."

"[Other oligarchs] quickly fell into line [after Khodorkovsky's arrest]. Everyone feared they would be next if they protested. Almost nobody stood up for Mr. Khodorkovsky--except for Prime Minister Mikhail Kasyanov, who seems about to be pushed out of Pres. Putin's administration... Most Western media, along with the Bush administration, adopted the neoliberal line that the oligarchs had stolen their property fair and square, and that to begin enforcing laws at this late date would destabilize Russia's stock market."

"[Putin] needs to come up with a coherent, focused policy to juxtapose to the neoliberalism that Yeltsin forced on Russia after his 1993 coup. I think he now realizes that the Washington-backed destruction of Russian industry and nurturing of an oligarchic class was the final stage of the Cold War. From this perspective his objective is how to rebuild Russia into a world power once again."

"The rent tax [is the first step]. Putin is coming to realize is that it is not necessary for the state to own Russia's natural resources outright. Despite the fact that it has sold them off, the government has the power to tax their rental income."

"During the 1990s I made four trips to Russia with Prof. Tideman, who had initiated the letter. We met many dedicated people at various levels of government and academia who worked to promote the idea of a rent tax. But on balance we found the major problem to lie in the fact that most of the government people we met wanted to get rich off Russia. Yeltsin's supporters were out purely for themselves. The main way they wanted to get rich was to gain control of land or some other rent-yielding resource. They were the last people to put in place a system designed to counter this kind of free-loading."

"[Sacked Prime Minister] Kasyanov had been acting on behalf of the oligarchs to block moves to tax resource rent ever since he was installed by Yeltsin's Family. Two weeks ago he distributed a glossy report denouncing Glaziev's proposal to tax resource rent. The Western press picked it up, imagining that it was an attack by Putin's government on Glaziev -- not realizing that in fact it was an attempt by the oligarchs to keep their money free of taxation. What the Western press did not realize was that Putin saw this as an attack on the policy that he himself was moving toward as he broke free of oligarchic control. Rather than seeing this as a step toward Russian democracy and self-determination, the press sees this as an authoritarian power grab by the silovaki. There simply is no understanding of the idea of land and resource rent as the fiscal basis for Russia."

Michael Hudson analyses Putin's arrest of oligarch Khodorkovsky, Russia's richest man: "The question now being asked is whether the oligarchs will sell off ownership of Russia's natural resources to the West as they bail out of Russia, or whether the nation will rescue itself from the insider privatizations by recapturing the revenue and wealth taken by the oligarchs. In the West one hears mainly of reversing and renationalizing the giveaways of the 1990s. But in Russia itself Sergei Glaziev, Dmitri Lvov and other economists are proposing a rent-tax to recapture the oil and gas, land and mineral rent for the economy."

"Mr. Putin governs in much the say that Franklin Roosevelt did. Roosevelt was famous for appointing cabinet members and aides with sharply divergent views... Roosevelt simply wanted to hear both sides of the major issues. He wanted his advisors to "duke it out." And they did."

"But Putin also has another set of advisors. One rising light has been Sergei Glaziev, an early market reformer already before 1990 but opposed to Yeltsin's coup d'?tat in 1993 and the "shock therapy" of "grabitization" that followed. He subsequently saw that a least distorted way for Russia to recover was by a tax on economic rent, that is, the value of land and natural resources that exists independently of labor and capital investment. The aim is to untax industry and labor, and make Russia's natural resources monopolies finance the government. But these are precisely the assets that Yeltsin's kleptocrats were the first to grab. So this intellectual policy fight has now been raging for a decade."

"On December 23, Putin gave a speech to Russia's Chamber of Commerce without mentioning Yukos but clearly referring to it. He reassured his audience that he didn't intend to reverse privatizations, but reminded them that everyone had a chance to follow the law in the 1990s, and it wasn't fair to let those who played by the rules end up losing out to dishonest grabbers. Inasmuch as nearly all the privatizations involved fraud under the anarchic conditions that Yeltsin's neoliberals created, applying lawful standards would seem to imply a reversal of at least the most blatant privatizations, or a demand for enormous fines and paybacks. The implicit threat of this speech was that if any other oligarchs got out of line, their fate would be that of Mr. Khodorkovsky and other Yukos stockholders."

"Mr. Khodorkovsky's fraudulent activities were so blatant that it is amazing that the Western press has been so lax in reporting them. In fact, the fury with which Bush Administration officials and even the normally liberal media have criticized Russia's government for the Yukos arrest reflects the degree to which they backed the kleptocrats from the outset, recognizing that in the end these individuals would cash out their gains by selling Russia's natural resources at prices still so low as to be nearly giveaway prices. The U.S. fear is that now the financial takeover of Russia may be interrupted, and that Western investors may have got all they are going to get."

"The point of this is not to attack Khodorkovsky. It is to make clear that virtually everything he did was directed, supervised and monitored by the very people who are now attacking him... So there is no point in extrapolating from the fall of Khodorkovsky a great animus against 'oligarchs' or 'privatisation'. That isn't what this is about. This is about a man who knows where all the money has gone; who knows who have been the beneficiaries of the greatest money-laundering scheme in the history of the world. If such a man decides to go into politics he is a danger."

"Mr. Khodorkovsky's arrest is not the start of a campaign to 'get the rich' ... We are witnessing the final death agony of the kleptocracy that was Boris Yeltsin's Russia... When you buy state assets in such a dubious backroom deal and at such a steep discount to market, chances are your property rights will never be truly secure. You will always be regarded by the population as a crook and by the government as more of a custodian of state assets than an owner... his arrest certainly looks like a case of selective justice ... but this is still better than no application of justice at all. During the Yeltsin era, well-connected businessmen could routinely embezzle millions from the state treasury or even organize the murder of rivals--all without the prosecutors making a squeak. The result was relentless economic decline and the collapse of the ruble in 1998."

"Putin has not yet moved. An amnesty to Yeltsin's Family and other privatizers would doom Russia to deteriorate into one of the most polarized and impoverished nations in the world. On the other hand, to reverse the privatizations would mean a fight with the United States which had sponsored the "reformers" and their rip-offs from the outset, going back to Yeltsin's military attack on the Duma in 1993 and subsequent seven years of rule by dictatorial decree."

"That is always the important question to ask: "Why just now? Why right at this time?" The explanation almost always is that political action is taken to protect against some imminent danger. To start with, Mr. Khodorkovsky violated Mr. Putin's insistence that the oligarchs stay out of politics. They were about to buy up the Duma and use their power to destroy the powers of the presidency, that is, of Mr. Putin himself. This is the strategy of neoliberalism. It is a two-stage process. The first stage is to make use of centralized state power to promote insider dealings and give a patina of legitimacy to the theft of public resources. Most of the great fortunes have been obtained in this way, including the aristocratic holdings stemming from the Norman Invasion of England in 1066.

"The second stage involves closing ranks to prevent anyone else from doing this, once the prizes have been handed out. A campaign is mounted against government power to reduce and even eliminate the state's ability to exert a countervailing force on the propertied oligarchy. The narrow oligarchy becomes society's new centralized planners, replacing the state. Russia is now in this stage, and the oligarchs are trying to mobilize popular support against the government--while Putin for his part is turning populist to mobilize support against the oligarchy."

"The oligarchs were starting to cash out, selling their holdings for dollars, sterling, real estate, British soccer teams and so forth. Their move to the West would have insulated them from future fiscal and criminal prosecution from within Russia... Legally [a tax on rent] could have done so. But politically, taxing economic rent has become the b?te noir of neoliberal globalism. It is what property owners and rentiers fear most of all, as land, subsoil resources and natural monopolies far exceed industrial capital in magnitude. What appears in the statistics at first glance as "profit" turns out upon examination to be Ricardian or "economic" rent."

"What finally enraged Mr. Putin was a willfully arrogant act by Mr. Khodorkovsky and his Yukos insiders.. an extraordinary $3 billion dividend distribution, an increase of 400 percent over the previous year. Rather than using this money to modernize their oil extraction or invest in the industry, they were simply stripping the company's assets before letting it go."

"[Other oligarchs] quickly fell into line [after Khodorkovsky's arrest]. Everyone feared they would be next if they protested. Almost nobody stood up for Mr. Khodorkovsky--except for Prime Minister Mikhail Kasyanov, who seems about to be pushed out of Pres. Putin's administration... Most Western media, along with the Bush administration, adopted the neoliberal line that the oligarchs had stolen their property fair and square, and that to begin enforcing laws at this late date would destabilize Russia's stock market."

"[Putin] needs to come up with a coherent, focused policy to juxtapose to the neoliberalism that Yeltsin forced on Russia after his 1993 coup. I think he now realizes that the Washington-backed destruction of Russian industry and nurturing of an oligarchic class was the final stage of the Cold War. From this perspective his objective is how to rebuild Russia into a world power once again."

"The rent tax [is the first step]. Putin is coming to realize is that it is not necessary for the state to own Russia's natural resources outright. Despite the fact that it has sold them off, the government has the power to tax their rental income."

"During the 1990s I made four trips to Russia with Prof. Tideman, who had initiated the letter. We met many dedicated people at various levels of government and academia who worked to promote the idea of a rent tax. But on balance we found the major problem to lie in the fact that most of the government people we met wanted to get rich off Russia. Yeltsin's supporters were out purely for themselves. The main way they wanted to get rich was to gain control of land or some other rent-yielding resource. They were the last people to put in place a system designed to counter this kind of free-loading."

"[Sacked Prime Minister] Kasyanov had been acting on behalf of the oligarchs to block moves to tax resource rent ever since he was installed by Yeltsin's Family. Two weeks ago he distributed a glossy report denouncing Glaziev's proposal to tax resource rent. The Western press picked it up, imagining that it was an attack by Putin's government on Glaziev -- not realizing that in fact it was an attempt by the oligarchs to keep their money free of taxation. What the Western press did not realize was that Putin saw this as an attack on the policy that he himself was moving toward as he broke free of oligarchic control. Rather than seeing this as a step toward Russian democracy and self-determination, the press sees this as an authoritarian power grab by the silovaki. There simply is no understanding of the idea of land and resource rent as the fiscal basis for Russia."