The Return to Command: Russian Asset Seizures and the Revival of a Stalinist Economy

Since the full-scale invasion of Ukraine in February 2022, President Putin’s Russia has presided over what amounts to a large-scale, covert nationalisation program. Both foreign and domestic assets—once owned by Western companies, oligarchs, and even regime critics—have been sequestered or expropriated. These actions symbolize a profound political and economic pivot: an accelerated return to a command economy oriented towards military strength and state control, sidelining genuine private enterprise.

Asset Seizures: Scale and Targets

Over the past three years, Russia has formally or informally seized approximately $50 billion (3.9 trillion roubles) in assets. These include:

• Foreign corporate assets: industries from brewing (Carlsberg, Danone) to energy (Uniper) were seized under decrees labeling them “strategic” or hostile. Many were subsequently repurposed for export to allied markets.

  
  

• Domestic businesses and oligarch holdings: legal mechanisms citing corruption, extremism, or strategic necessity have transferred private holdings—such as gold producer Uzhuralzoloto or the Glavprodukt food firm—to Kremlin-appointed managers.

  
  

• Elite property seizures: high-profile figures like Konstantin Strukov and Ziyavudin Magomedov have lost stakes in major companies (Uzhuralzoloto, FESCO), often on politically motivated grounds.

This wave of asset confiscation stands as one of the Kremlin’s most definitive moves away from post-Soviet private ownership, effectively dismantling any illusions of economic autonomy for Russian businesses.

Militarisation of the Economy

The seizure of private and foreign assets has not just deepened state coffers; it has fundamentally redirected economic priorities:

• Defence spending has soared. In 2024, military allocations reached 13.2 trillion roubles ($129 billion)—around one-third of the federal budget and over 7% of GDP.

  
  

• Russia is deploying a military Keynesian model. The government has subsidised state firms, raised public-sector wages, and created defence-industry jobs—bolstering loyalty through economic incentives.

  
  

• Traditional private-sector activity is collapsing. Sanctions and expropriations have forced Western firms out, while domestic small-to-medium enterprises (SMEs) shrank by nearly 42% in the years after the invasion.

The state now controls the “commanding heights” of the economy—energy, heavy industry, food and finance—leaving little space for private initiative or market competition.

A Return to Soviet-Style Command Structures

The consolidation of economic power mirrors early Soviet governance—but now justified under “fortress Russia” doctrine:

Soviet Era	Putin’s Russia (2022–)
State omnipresence in major industries	Kremlin-run control over energy, food, defense, finance
Planned economy and centralised direction	Budget-driven resource allocation, sovereign wealth fund interventions, liquidation of asset rights
Political repression over dissent	Arbitrary arrests of business leaders seen as disloyal
Planned collectivisation & nationalisation	Forced transfers of firms and expropriation of foreign assets

This transformation is not accidental: it is deliberate. Federal decrees facilitate seizures, courts rubber-stamp asset transfers within days, and the loyalty of state managers is the only criterion for retention. Meanwhile legal protections for property have become symbolic at best.

Consequences for Russia’s Future

In the short run there is an element of resilience in rebuilding a communist-style command economy. State-led mobilisation has yielded a war-sustaining economy. Rising wages, revved-up production and tight capital controls have prevented economic collapse  .

But long-term fragility looms:

• Capital flight and demotivation of entrepreneurs: loss of investor confidence and shrinking domestic enterprise hinder future recovery.

  
  

• Institutional atrophy: without private initiative or genuine competition, innovation stalls.

  
  

• Economic dependency on war: peace poses a challenge, as military Keynesian structures are unsustainable without sustained conflict and private sources of economic growth based around consumer demand have since been undermined.

  
  

• Strategic isolation: pivoting toward China and non-Western markets cannot fully offset the loss of Western trade, investment and technology.

  
  

• Fragmented reforms post-war: reversing central controls when officials depend on prior asset seizures to maintain power will be difficult.

Rebirth of a Fortress USSR

Russia is progressively reconstituting herself as a wartime command economy, the private sphere ever more circumscribed. The seizure of both foreign and domestic assets is not economic recovery—it’s political re-engineering. What began as defensive reprisals became a broader ideological project, aiming to revive a Soviet‑style economic model premised on state supremacy and martial primacy.

This experiment may offer short-term security benefits. But it also threatens the vitality of Russian society beyond the battlefield. In reconstructing a fortress economy, the Kremlin risks breeding not only dependency and inefficiency, but a political and demographic quagmire from which future transformation will be difficult—perhaps impossible.

Russia thus confronts a critical choice: remain a wartime fortress—isolated, brittle and autocratic—or dare to return to a more open, innovation-driven system. With each seized plant and frozen factory, the road to the latter grows steeper.