The 1998 Russian Financial Crisis is presented as a devastating reversal for ordinary Russians amid the conspicuous enrichment of the oligarchs. The book does not supply a technical account of the crash; instead, it registers its social force through the savings it erased, the people who did not protest, and the opulent world they watched from the margins. Its surrounding narrative traces the unequal economic and political order that had taken shape during Boris Yeltsin’s reforms and second term.

Background: Shock Therapy and Privatization

The crisis follows an abrupt attempt to create a market economy in a country that had never had anything remotely like one. Aware of his limited economic knowledge, Boris Yeltsin appointed Yegor Gaidar, a young economist descended from the Communist nomenklatura and a fervent believer in liberalism. Yeltsin and Gaidar sought to move quickly, hoping to push reform through before reactionary forces could block it. They called the program shock therapy.

Price liberalization produced inflation of 2,600 percent. On September 1, 1992, every Russian citizen over one year old was sent a voucher valued at ten thousand rubles, intended to give each person a share in national wealth and encourage investment in businesses and private property. By the time the vouchers arrived, inflation had made them nearly worthless: at most, they could buy a bottle of vodka. Many recipients sold them to buyers offering roughly the value of a bottle and a half. The episode supplies an earlier measure of how formal economic participation could translate, for ordinary people, into little more than a quickly spent token.

From Vouchers to Oligarchic Wealth

Among the buyers who accumulated these vouchers were Boris Berezovsky, Vladimir Gusinsky, and Mikhail Khodorkovsky, whom the book uses as representative figures for the oligarchs. The transition from an economy in which private business had been forbidden to one suddenly operating without established rules, laws, a banking system, or taxation gave energetic entrepreneurs room to build enormous fortunes. The narrative describes them as having been told, almost overnight, that they could pursue the business they had been barred from practicing.

A further transfer of economic power came through the loans-for-shares scheme. The oligarchs’ banks lent money to a cash-strapped state, with shares in major natural-resource companies pledged as collateral. If the state failed to repay the loans within a year, the lenders could take the shares. Because the deadline fell after the presidential election, the arrangement also gave the oligarchs a direct stake in who remained in power. They feared that Gennady Zyuganov, the Communist candidate, might repudiate the agreement. At the 1995 Davos World Economic Forum, the attention Zyuganov received from journalists and political advisers alarmed Berezovsky. He then called six other powerful oligarchs, proposing that they set aside their conflicts and use their combined financial and media power to secure Yeltsin’s reelection.

The Crash and Its Unequal Burden

The book places the 1998 crash within the second Yeltsin term, which it dates from 1996 to 2000. Foreign businessmen, journalists, and adventurers later remembered those years as exhilarating: Moscow seemed to offer nights of extravagance and a center-stage role in the world. That experience belonged chiefly to those able to afford it. The crisis erased the meager savings of people who had already lost them once in the decade, yet they did not take to the streets. The account shows them stunned and still, seated in shabby coffee shops before televisions that displayed the rich-city world from which they were excluded.

The contrast is rendered through precise images of consumption. On television, a young woman could casually use a gold card to pay for sushi costing what a teacher earned in a year; wealthy young men traveled with entourages of bodyguards and flew privately to Courchevel, where they filled Jacuzzis with Veuve Clicquot. While these scenes made elite abundance visible, the crisis’s victims remained largely unseen and politically quiet. The juxtaposition makes the crash more than a financial setback in the narrative: it exposes the distance between the people absorbing repeated losses and those whose wealth was expanding.

Political Consequences and Significance

The loans-for-shares bargain illustrates how economic resources became political leverage. Khodorkovsky, for example, paid $168 million for Yukos, an oil company bringing in three billion dollars a year. The fortunes built around raw materials, the account argues, generated little public wealth and disappeared into opaque offshore networks, including those in Liechtenstein and the Cayman Islands. The crash thus unfolds against a social order in which the gains of privatization were concentrated while ordinary households remained vulnerable to the next shock.

As Yeltsin’s second term approached its end, the oligarchs again looked for a successor who would cooperate with them. Berezovsky proposed Vladimir Putin, then a little-known former intelligence officer who had quietly headed the Federal Security Service for the previous year. The account presents this search as a continuation of the oligarchs’ effort to protect their interests, not as a consequence of the 1998 crash alone. In the event’s broader significance, the crisis marks the human cost of a market transformation whose most visible rewards belonged to a small circle, while its repeated losses settled on people with little means to resist.