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. Last Updated: 07/27/2016

Changing Faces Not System

In the 1990s, it became something of a tradition for dramatic events of one kind or another to take place in August. The coup attempt in 1991, default and devaluation in 1998, the sinking of the Kursk submarine in 2000 -- all occurred in August. July, on the contrary, has always been seen as a quiet period, when journalists could confidently head off for their vacations.

I don't know what this August will bring us, but July so far has certainly not been a "slow news" month. The terrorist act at the Krylya rock festival in Tushino, which took at least 13 lives, has given rise to a whole new wave of political debate.

However, the main issue troubling the elite right now is not terrorism but the latest round of factional infighting in the upper echelons of power. That is how the arrest of Group Menatep head and major Yukos shareholder Platon Lebedev is being interpreted. Not only was Lebedev arrested, but Yukos CEO Mikhail Khodorkovsky and his right hand, Leonid Nevzlin, were called into the Prosecutor General's Office for questioning.

Over the weekend, Khodorkovsky commented on these events as follows: "This concerns neither the company's management nor its business activities. This concerns individual company shareholders."

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He hit the nail on the head. It is the interests of "individual people" that lie at the heart of the Russian political system -- and the names of most of these individuals are no big secret.

Nonetheless, the conflict between different clans has been deepening. On the one hand, there are the so-called St. Petersburg chekists, who swept to power on President Vladimir Putin's coattails, although certainly not all of them are members of the state security establishment. Then, there is the oligarch old guard -- those who climbed the greasy pole under Boris Yeltsin and acquired the Family moniker -- although far from all of them are intimately related to the former president's family.

The standoff between these groups is all too real. And there is plenty to fight over: At stake is power and control of the country's assets.

Over the weekend, court experts explained to the masses that Putin had finally decided to take on the oligarchs. The vast majority of the population, who suffered impoverishment during the course of the 1990s should be well-disposed toward such moves. In the oligarchs, they see if not those who are to blame for their woes, then at least those who got very rich off the situation.

Alas, skirmishing with the oligarchs does not mean the demise of the oligarchy is imminent, and the current clash between members of the president's entourage and the captains of big business does not mark a major change of course. On the contrary, it only confirms how little things have changed.

No structural reforms to restrict the economic power of the oligarchy have been proposed by the Kremlin, even out of populist considerations. Nationalization is not on the agenda; and not even more moderate options -- such as a windfall tax or the introduction of a natural resource tax, along the lines proposed by left-wing economist Sergei Glazyev -- are being considered. Measures of this kind would be proof positive of a real attempt to cut the oligarchy down to size, but as Khodorkovsky rightly pointed out, it is not the system that is at issue, but specific individuals.

The St. Petersburg chekists, in moving against the Family, are not remotely interested in changing the system. On the contrary, they simply want to be the dominant actors in the existing system. The chekists are seeking to use their political power to seize the "commanding heights" of the economy.

In the early 1990s, this was called "converting power into property." The dream of the St. Petersburg chekists, who missed the party the first time around, is to preside over a new carve-up.

In turn, the oligarch old guard is no stranger to politics. Khodorkovsky and other Yukos shareholders finance political parties spanning the political spectrum. A party's ideology and program is of little real importance.

Both the chekists and the Family know that the main threat they face is from each other -- and are taking out insurance accordingly.

For the man on the street, this battle of the Titans is likely to be confined to their TV screens.

That is, as long as the warring sides don't go too far and end up destroying the very system, in whose preservation they both have a vital interest.

Boris Kagarlitsky is director of the Institute of Globalization Studies.