Putin came to office in 2000. Russia was at its nadir: an economy in ruins; a political system with no authority; fourteen per cent unemployment. His timing was uncanny. Energy prices rose. G.D.P. growth shot up to as high as nine per cent. Unemployment dropped by more than half. A financial sector developed, which brought greater investment and productivity. By 2008, average citizens—far from all Russians, but tens of millions of them––were living better than they had lived at any time in the nation’s history. Russian billionaires, like the sheikhs of yesteryear, bought up the prime real estate of Mayfair, Fifth Avenue, and the Côte d’Azur. And with that new wealth and welcome stability came enormous popularity for Vladimir Putin. His compact with the Russian people, however, was stark: Stay out of politics and thrive. Interfere, presume, overstep, and you will meet a harsh fate.

But now, as the economy sputters, the compact has become much more severe. Inflation is high. Foreign investment, the stock market, and the ruble have declined––and this is all before the pain of Western sanctions and the costs of the Ukrainian adventure have fully registered. Capital flight has reached as much as seventy billion dollars this year. Growth is now at about one per cent and, according to Guriev, “heading toward zero.” Corruption, cronyism, re-nationalization, and opacity are enemies of progress, advisers like Guriev have long insisted, but Putin has not wanted to hear it. He has come to insist on public pledges of loyalty; a figure like Guriev can no longer remain an adviser to the regime.

The occupation of Crimea, the maneuvers in eastern Ukraine––it is all part of a short-term, and highly successful, political diversion to maintain Putin’s domestic rating. It is also a road to nowhere. Never mind the interests of the Ukrainian people, who have suffered one kleptomaniacal leader after another. Putin will hardly rescue them. The tentative cooling-off agreement that Russia and Ukraine struck late last week might curtail further violence, and yet on the same day Putin chose to emphasize his right to send troops into the country and used the centuries-old, highly nationalist term Novorossiya––New Russia––to describe southeastern Ukraine.

Putin’s current tactics for social control are cunning and effective. His popularity rating––a vexed statistic in an authoritarian country––is at eighty per cent. “For less sophisticated people, he relies on brainwashing,” Guriev said. “For more sophisticated but less honest people, he needs to bribe them. For honest, sophisticated people, he uses repression.” The President doesn’t much care if he has pushed an independent mind like Guriev out of the country. He knows that his real cronies––the men from the K.G.B., from his judo club, from Ozero, his dacha co-op near St. Petersburg––have nowhere to go. They will either suffer the Western sanctions, which could cut into their billions, or make the highly dangerous move of plotting against their patron.

Sergei Guriev, The New Yorker, April 20