It is important to understand that Russia literally turned itself inside out during the last decade. It is not simply a matter of learning from the West. For a time, Russian decision-makers gave more credibility to a Harvard economics professor than to all the Russian economists. Russians sought to adopt Western party politics, in spite of the fact that Russia had not been genuinely democratic in its history. Russia abandoned an empire that had taken centuries to build, including the spoils of a world war in which it lost tens of millions of Russians, expecting in return Western-style prosperity and integration into Western civilization. The list is endless. The results are not. Russia achieved, in return, less than nothing. Where in 1980 it was a poor but feared superpower, in 2000 it is substantially poorer, weaker and internationally marginalized. The question of why this happened is entirely academic at this point. We expect scholars to debate for centuries why Westernization failed and who was responsible. For us, it is sufficient to note that the latest Westernization experimentation has failed, and that this failure is in keeping with what happened in all previous Westernizing experiments. They always fail. The more extreme the embrace of the West, the more extreme the later rejection of the West, and the harsher the fate of Russian Westernizers. The issue now is to try to map the consequences of this failure. Gorbachev attempted to initiate a massive reform intended to save the Communist Party system. He and those Soviets familiar with the evolution of technology in the West, particularly those charged with this within the KGB, were painfully aware that the Soviet Union was slipping hopelessly behind. They also understood that in order to reverse the situation, the Soviet Union needed a massive influx of technology from the West. Gorbachev knew two things. First, while the Cold War raged, investment and technology transfer were unlikely. Second, unless there was major reform in Soviet institutions, no amount of capital or technology could be absorbed. Gorbachev therefore needed to end the Cold War, convince the West that fundamental reforms were underway that would prevent the resurrection of the Cold War and reform Soviet institutions so that the Soviet Union could take advantage of investment and technology. Neither Gorbachev nor the relatively sophisticated bureaucrats who gravitated to him intended to dismantle communism or the party apparatus. Certainly none of them expected to be forced to withdraw from Eastern Europe. The thought of the Soviet Union disintegrating was the farthest thing from their minds. They badly underestimated the weakness of their own system. They failed to understand that liberalization of an ossified system creates uncontrollable forces. By 1989, the situation had spun out of control, and both the party and the empire collapsed. Still, there was no revolution - a critical fact missed by most Western observers. The Soviet Union disintegrated into its constituent republics with the loss of only the highest tier of officials. The old guard retained control of the Russian government and the perestroika economy, and even held the leash of the extreme pro-Western reformers. With the old system intact, there could be no sweeping change. Without a revolution, the "new" Russia was doomed from the start. The collapse of the Soviet Union and its institutions opened the door not so much for reform as for theft. In a country that had no system of private property, no system of legal documentation for ownership, no impartial judiciary for adjudicating disputes, property was suddenly "privatized," whatever that meant. Opportunists seized control. Some were political opportunists, like Boris Yeltsin. Others were economic opportunists like Boris Berezovsky. Ultimately, the two classes of opportunists merged into one. The result was catastrophic. Westerners completely missed the situation. Most had no idea whatsoever what was going on, focusing on grand theories of liberalization based on a foundation of air. Others participated in the systematic looting of both the Russian economy and Western investment. In Russia, the distinction between liberalization and theft became difficult to define, as was the difference between liberal and thief. The opposition to all of this was an unimaginative coalition of Brezhnevites, Stalinists and fascists. An advantage of incompetent democracy is that the opposition is as ineffective as the government. Lacking his own political currency, President Yeltsin approached Russia's problems on a tactical level, appointing a series of disposable prime ministers appropriate to the crisis of the moment, as Russia sank deeper and deeper into the morass. The basic outlines of the opposition remained intact. However, over time, a new governing ideology emerged to replace the discredited liberalism. The first representative of that new ideology was Prime Minister Yevgeny Primakov, appointed to mollify the communist and nationalist opposition in the wake of the failure of Sergei Kiriyenko's economic reforms. Primakov turned against the oligarchs, backing a series of investigations and indicting two of the most prominent oligarchs for economic crimes, and he stiffened Russia's opposition to Western politico-military pressure. Primakov's political offensive was premature, and he fell victim to the powerful oligarchs and to Yeltsin's need to secure further IMF financing. Primakov's successor, Prime Minister Sergei Stepashin, was the last gasp of the Yeltsin Kremlin. The decision to sell out Russian interests in Yugoslavia just to continue juggling IMF debt drew a cry of "Enough!" from the Russian security apparatus. When future histories of Russia are written, the Russian army's dash to Pristina will mark the beginning of the new order - when nationalists in the Russian military and intelligence community seized control of the Russian foreign, and eventually domestic, agenda. The sea change was complete when Stepashin, unwilling to take appropriate steps to defend Russian territorial integrity in Dagestan, was replaced by Federal Security Service Director and KGB veteran Vladimir Putin. Prime Minister Putin was tasked with one immediate mission: to stabilize the Russian government and prevent its complete collapse. Appointed in the wake of Russian humiliation in Kosovo, Putin understood that two issues remained on the table. The first, obviously, was the economy. The second was Russian national security, or to put it more precisely, Russian patriotism. Putin understood that he could do little about the economy, primarily because the Yeltsin regime was so intimately tied to the Russian economic oligarchs. Any attempt at cleaning house would quickly bring him down. He therefore concentrated on the single area where he had a degree of control: patriotism. He launched a war in Chechnya that was designed to do two things. First, it would draw a line in the sand, showing that Russian disintegration would stop, no matter what the cost. Second, he would move Russia into a more confrontational position with the West, knowing that this strategy would increase his popularity in a country tired of being treated with contempt. He therefore created a situation in which he tried to co-opt Russian nationalism for Yeltsin's regime, building popularity and thereby evading the economic questions he could not answer. Like Gorbachev before him, Putin tried to find a solution that would stave off complete collapse without requiring fundamental changes. In doing this, he has, like Gorbachev, unleashed forces that he will not be able to control. The extraordinary popularity of the war in Chechnya led his faction to a much greater victory than expected in recent elections. But in unleashing Russian nationalism, he triggered a process that took on a life of its own. Russians are far more open to conspiracy theories than the complex economic and social explanations that might be expected. This is particularly true, because part of the explanation of events in Russia can be traced to a conspiracy: the conspiracy of Russian oligarchs working with Western banks and other institutions. The theory that Russia lacked the preparation for capitalism does not resonate nearly as well as the not completely untrue explanation that foreign elements and their Russian agents combined to weaken, rob and humiliate Russia. Throw more than a little anti-Semitism into your explanation and you have a theory that is both satisfying and, to some extent, true. Putin, by tapping into Russian nationalism, is trying to stabilize the political foundations of the regime. But in legitimizing Russian nationalism at the level of the prime minister's office, he generates not only a desire to end the disintegration of Russia, but an inevitable backlash against the West, a backlash aided by Western moralizing on Chechnya. Now, if the justification for retaining Chechnya is that it is integral to Russia and is being subverted by outsiders - with a broad hint that the outsiders are not just Georgians, but the Georgian's American masters - then a number of things follow. First, it follows that if Georgia is the root of the infection, something should be done about Georgia. Second, if Georgia is merely the puppet of Washington, then something ought to be done about Washington. Finally, if Moscow is doing something about Washington in Chechnya, then Moscow should be doing something about Washington wherever it is acting against Russian interests. That obviously includes the other areas of the former Soviet Union where Western influence is generating threats to Moscow. And it involves those inside of Russia who have sold themselves to their Western masters. In other words, we feel that Russia is primed for another round of anti-Western frenzy. It is not clear that this could have been avoided under any circumstances. But Putin's attempt to co-opt nationalism on behalf of the Yeltsin reformist government both speeds up the process and guarantees that it will boomerang on him. Gorbachev tried to save the Soviet Union with internationalism and lost the Soviet Union. Putin is trying to save the reform government of Russia with nationalism and will lose that too. The issue is whether the current constitution will be able to preside over the witch-hunt that is brewing in Russia over who sold Russia to the West. We rather doubt it. The constitution has as much legitimacy as Yeltsin: very little. Moreover, Westerners confuse the holding of elections with democracy. Russians feel completely powerless. In the countryside, outside of Moscow and St. Petersburg, they feel completely alienated from the government, which is regarded as, at best, irrelevant and at worst, harmful. The institutional question is, however, irrelevant. Putin or someone else, under this constitution or some other administrative form, will have to pay for what was done to Russia. In no other country could everything have gone to pieces as catastrophically, without a day of reckoning. The idea that the regime, which presided over this catastrophe, will continue to govern indefinitely is preposterous. Now, it is possible that Putin, with his roots in the KGB and his relations with the military, will be able to preside over the complete reorientation of the Russian state. But personalities notwithstanding, the reorientation is underway. We expect the reorientation to include a terror. Not only is this fairly traditional in Russian recoils from the West, but there is an institutional requirement in this case. Wealth and power is in the hands of the oligarchs and the Mafia. No new regime can emerge that does not liquidate these entities. Such liquidation is impossible through legal means. Russia does not have the institutions needed to arrest, try and expropriate the Mafia. Indeed, the Mafia may turn out to be an extremely dangerous opponent. Although, like all criminal groups they have the weakness of being easily split by a brutal enemy. But a brutal enemy is the only thing that will break the oligarchs and Mafia. Therefore, there will be a terror that will focus on criminals, and then, in grand Russian style, will sweep on to ensnare entire classes. Putin, the Gorbachevite, is unlikely to preside over a terror. He is more likely to engage in a series of partial, stabilizing measures. The name is unknown of the man who will use Russian nationalism and xenophobia to unite Russia and crush Westernizers of all sorts. But he is out there and he will, fairly early in the decade, make himself known. The complete failure of liberalism in Russia, its very real victimizations at the hands of Western schemers and dreamers, makes a massive house cleaning inevitable. Along with this house-cleaning, of course, will come a new foreign policy. The frontiers of Russia are irrational. Apart from pure military geography, a century of empire has created economic dependencies that were torn apart when the Soviet Union collapsed. There was a rationale to the old Soviet borders. Now, there is no doubt there is deep antipathy toward Moscow in many of the former republics, and deep nationalism supporting a desire for independence. But there are substantial, if minority, forces in these countries that want reunification. The remnants of the Russian security apparatus remain active enough in these countries that with a powerful, even ferocious, government in Moscow, resistance can be overcome, in many cases on a voluntary basis. We do not think this will happen quickly. We expect Moscow to spend most of the next generation simply trying to rebuild its empire to the borders of the former Soviet Union. The task will be difficult and in some cases bloody. Moscow will not become a superpower for several decades, if by superpower one means the ability to project forces globally. It will be hard enough to project forces into the Baltics, Caucasus, Ukraine or Central Asia. But this campaign holds out economic hope as well. Defense expenditures can kick-start an economy. Germany went from a deep depression to an expanding economy in five years between 1933 and 1938. Massive expenditures on defense had a great deal to do with it. Defense spending, like all public works projects, can increase economic activity. But defense spending, with its particular emphasis on advanced technologies, can have sustaining effects on the economy. At any rate, the Russian economy really has few other options. Therefore, increased defense spending will probably have a greater impact on Russia's economy than any other single cause. Russia's attempt to reconstruct itself will inevitably face opposition from the United States. A recreated Soviet Union, however organized, is not in the American interest. The economic interests pursued by United States in the post-Soviet power vacuum in both the Caucasus and Central Asia have shown little financial promise, but great strategic significance. The region's oil promise may not be panning out, but the desire for Western investment is serving to keep several countries in the region oriented away from both Russia and Iran. However, the United States has relatively few options in the region, particularly if the Russians were to attempt to use direct force - as they have in Chechnya. Nevertheless, American hostility to Russian aspirations, while it may be useful in generating political support in Russia, poses a problem that Russia will find difficult to deal with alone. The process of building equilibrium in the international system is of particular interest to the Russians, who will seek to build a coalition to limit American power. The central player in that coalition is China. China is, of course, somewhat more cautious in allying with Russia, simply because it sees the threat of alliance as useful in extracting concessions from the Americans. Nevertheless, we foresee a serious attempt by the Russians to work with the Chinese, an attempt that we think will be successful. China has a particular interest in securing Xinjiang from Islamic influences based in neighboring former Soviet Republics. It is therefore quite interested in seeing increased Russian presence in the region. We can see clearly that Russia is utterly de-synchronized economically from the rest of the world. It is also deeply involved in coalition-building designed to limit U.S. strategic power. But the most fascinating dimension of the next decade about Russia will be watching it wrestle with its internal demons. The pendulum is hurtling away from its love affair with the West. We expect the other swing of the pendulum fairly early in the next decade. The only question in our minds is how deep and how bloody the house-cleaning will be.