Seth Walsh
Iconoclast
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The 1990s Russian oligarch era was probably the purest form of post-state scorched earth capitalism ever seen.
Not “building companies.”
Not “long-term shareholder value.”
Not even normal corruption.
This was:
And nobody embodied the era better than Boris Berezovsky.
The Soviet Union had collapsed.
The state was desperate for cash.
Institutions barely functioned.
So the government effectively said:
Metals.
Mining.
Telecoms.
Then the “auctions” were structured so insiders themselves won the assets.
This became the infamous “Loans for Shares” scheme.
The result:
A tiny network of politically connected bankers acquired gigantic industrial assets at absurd discounts.
Not because they built anything.
Because they controlled:
It was capitalism as state decomposition.
Then he realized something profound:
In a collapsing state, informational leverage matters more than operational competence.
He moved into:
The trade was simple:
Protect the regime.
Receive strategic assets.
Eventually tied to Roman Abramovich and Berezovsky.
The company was acquired during the privatization wave for roughly ~$100m. Later it sold for billions.
That spread alone explains the entire era.
The objective was not:
Acquire strategic hard assets before institutional reality catches up.
That is scorched earth capitalism.
You buy civilization during a temporary pricing error.
He gained influence over ORT, Russia’s main television channel.
Meaning:
The oligarch model was basically:
State weakness → media influence → political leverage → asset acquisition → capital flight.
That is the psychologically disturbing part.
The highest returns came from:
The winners recognized that:
Less theatrical.
Less ideological.
More structurally dangerous.
Berezovsky was chaos capitalism.
Abramovich was optimized extraction capitalism.
Quiet.
Low visibility.
Operationally adaptive.
Relationship-managed.
When the Putin era arrived, many first-wave oligarchs lost power.
Berezovsky eventually fled Russia.
Khodorkovsky went to prison.
Others died, disappeared, or lost influence.
Abramovich survived much longer because he understood the next evolutionary rule:
In authoritarian capitalism, proximity to power matters more than ownership itself.
During systemic transitions, ownership changes hands violently and asymmetrically.
Not gradually.
Not fairly.
And usually not through “competition.”
The biggest fortunes often emerge when:
Not entrepreneurship.
Civilizational arbitrage.
Not “building companies.”
Not “long-term shareholder value.”
Not even normal corruption.
This was:
- collapsing empire
- state assets being auctioned off for fractions of their value
- political capture
- media manipulation
- debt-for-equity extraction
- oil fields, metals and TV stations being treated like loot crates
And nobody embodied the era better than Boris Berezovsky.
The Core Mechanic: “Loans for Shares”
Russia in the mid-90s was broke.The Soviet Union had collapsed.
The state was desperate for cash.
Institutions barely functioned.
So the government effectively said:
Oil.
Metals.
Mining.
Telecoms.
Then the “auctions” were structured so insiders themselves won the assets.
This became the infamous “Loans for Shares” scheme.
The result:
A tiny network of politically connected bankers acquired gigantic industrial assets at absurd discounts.
Not because they built anything.
Because they controlled:
- liquidity
- media
- political access
- auction structure
- information asymmetry
It was capitalism as state decomposition.
Berezovsky’s Prime Era
Boris Berezovsky started as a mathematician and car dealer.Then he realized something profound:
In a collapsing state, informational leverage matters more than operational competence.
He moved into:
- banking
- media
- political influence
- oil privatization
- Kremlin relationships
The trade was simple:
Protect the regime.
Receive strategic assets.
Sibneft: The Extraction Engine
The most famous case was Sibneft.Eventually tied to Roman Abramovich and Berezovsky.
The company was acquired during the privatization wave for roughly ~$100m. Later it sold for billions.
That spread alone explains the entire era.
The objective was not:
- improve operations
- optimize production
- innovate technology
Acquire strategic hard assets before institutional reality catches up.
That is scorched earth capitalism.
You buy civilization during a temporary pricing error.
The Real Asset Was Never Oil
The real asset was:- political immunity
- media control
- access
- coercive leverage
He gained influence over ORT, Russia’s main television channel.
Meaning:
- narratives
- elections
- political legitimacy
- public perception
The oligarch model was basically:
State weakness → media influence → political leverage → asset acquisition → capital flight.
The Most Brutal Part
Almost none of this required operational excellence.That is the psychologically disturbing part.
The highest returns came from:
- positioning
- timing
- access
- legal ambiguity
- political embeddedness
The winners recognized that:
- institutional transition creates mispriced ownership
- collapsing systems create forced sellers
- political desperation creates privatization
- liquidity crises create generational transfers of wealth
The Abramovich Dynamic
Roman Abramovich represented the colder second phase.Less theatrical.
Less ideological.
More structurally dangerous.
Berezovsky was chaos capitalism.
Abramovich was optimized extraction capitalism.
Quiet.
Low visibility.
Operationally adaptive.
Relationship-managed.
When the Putin era arrived, many first-wave oligarchs lost power.
Berezovsky eventually fled Russia.
Khodorkovsky went to prison.
Others died, disappeared, or lost influence.
Abramovich survived much longer because he understood the next evolutionary rule:
In authoritarian capitalism, proximity to power matters more than ownership itself.
The Hidden Lesson
The 1990s Russian oligarch era reveals something most public discourse suppresses:During systemic transitions, ownership changes hands violently and asymmetrically.
Not gradually.
Not fairly.
And usually not through “competition.”
The biggest fortunes often emerge when:
- institutions break
- states panic
- assets become politically mispriced
- liquidity vanishes
- insiders gain first access to restructuring
Not entrepreneurship.
Civilizational arbitrage.
