The next act of Russian history is about to begin: Putin and Medvedev will pop off-stage into the Moscow green room, switch costumes, and re-emerge to play each other’s roles. Putin as president, again, Medvedev as PM. It’s the apotheosis of what has become known as ‘managed democracy’, and the ultimate triumph of the show’s writer-director, Putin’s chief ideologue and grey cardinal, Vladislav Surkov, the ‘Kremlin demiurge’. Known also as the ‘puppetmaster who privatised the Russian political system’, Surkov is the real genius of the Putin era. Understand him and you understand not only contemporary Russia but a new type of power politics, a breed of authoritarianism far subtler than the 20th-century strains.

There is something cherubic in Surkov’s soft, smooth face, something demonic in his stare. He trained as a theatre director then became a PR man; now his official role is ‘vice-head of the presidential administration’, but his influence over Russian politics is unsurpassed. He is the man behind the concept of ‘sovereign democracy’, in which democratic institutions are maintained without any democratic freedoms, the man who has turned television into a kitsch Putin-worshipping propaganda machine and launched pro-Kremlin youth groups happy to compare themselves to the Hitler Youth, to beat up foreigners and opposition journalists, and burn ‘unpatriotic’ books on Red Square. But this is only half the story.

In his spare time Surkov writes essays on conceptual art and lyrics for rock groups. He’s an aficionado of gangsta rap: there’s a picture of Tupac on his desk, next to the picture of Putin. And he is the alleged author of a bestselling novel, Almost Zero. ‘Alleged’ because the novel was published (in 2009) under the pseudonym Natan Dubovitsky – Surkov’s wife is called Natalya Dubovitskaya. Officially Surkov is the author of the preface, where he denies being the author of the novel, then makes a point of contradicting himself: ‘The author of this novel is an unoriginal Hamlet-obsessed hack’; later, ‘this is the best book I have ever read.’ In interviews he has come close to admitting to being the author while always pulling back from a complete confession. Whether or not he actually wrote every word of it he has gone out of his way to associate himself with it.

The novel is a satire of contemporary Russia whose hero, Egor, is a corrupt PR man happy to serve anyone who’ll pay the rent. A former publisher of avant-garde poetry, he now buys texts from impoverished underground writers, then sells the rights to rich bureaucrats and gangsters with artistic ambitions who publish them under their own names. The world of PR and publishing as portrayed in the novel is extremely dangerous. Publishing houses have their own gangs, whose members shoot each other over the rights to Nabokov and Pushkin, and the secret services infiltrate them for their own murky ends. It’s exactly the sort of book Surkov’s youth groups burn on Red Square.

Born in provincial Russia to a single mother, Egor grows up as a bookish hipster disenchanted with the late Soviet Union’s sham ideology. In the 1980s he moves to Moscow to hang out on the fringes of the bohemian set; in the 1990s he becomes a PR guru. It’s a background that has a lot in common with Surkov’s, the details of which were barely known until an article in Novoye Vremya earlier this year set the record straight. He was born in 1964, the son of a Russian mother and a Chechen father who left when Surkov was still a young child. Former schoolmates remember him as someone who made fun of the teacher’s pets in the Komsomol, wore velvet trousers, had long hair like Pink Floyd, wrote poetry, was a hit with the girls. He was a straight-A student whose essays on literature were read aloud by teachers in the staff room: it wasn’t only in his own eyes that he was too smart to believe in the social and political set-up around him.

In the 1980s and early 1990s Russia was experimenting with different modes at a dizzying rate: Soviet stagnation led to perestroika, which led to the collapse of the Soviet Union, liberal euphoria, then economic disaster. How to believe in anything when everything around you is changing so fast? Surkov abandoned a range of university careers from metallurgy to theatre directing, put in a spell in the army, went to bohemian parties, had regular violent altercations (he was expelled from drama school for fighting). Surkov, it said (or allegedly said) in one of the US diplomatic cables released by WikiLeaks, had always thought of himself as an unrecognised genius, but it took him a while to find his metier.

He trained at a martial arts club with Mikhail Khodorkovsky, then one of Russia’s emerging young business stars. Khodorkovsky took him on as a bodyguard, saw he had more use for his brains than his muscles and promoted him to PR manager. He became known for his ability not only to think up ingenious PR campaigns but to manipulate others into getting them distributed in the major media with a mixture of charm, aggression and bribery. ‘Surkov acts like a Chekist of the 1920s and 1930s,’ Dmitry Oreshkin, a political analyst, said. ‘He can always sniff out your weak spot.’ Top jobs followed at banks and TV channels. In 1999 he was invited to join Yeltsin’s presidential administration. Looking more like a designer than a bureaucrat, he stood out from the rest. He was one of the key spin doctors behind the promotion of Putin for president in 2000. Since then, while many of his colleagues have fallen from grace, Surkov has managed to stay in the game by remaking himself to suit his masters’ needs. ‘Slava is a vessel,’ according to Boris Nemtsov, a prominent opposition politician: ‘Under Yeltsin he was a democrat, under Putin he’s an autocrat.’

At one point he began to fear that success would be his undoing: there was speculation that he had presidential ambitions, a dangerous rumour, especially in political circles, and he immediately leaked the fact of his Chechen father, which he had previously kept secret, in order to rule himself out of higher office, or so it’s said. It was his way of saying ‘I know my place.’ One of his former bosses described him as ‘a closed person, with many demons. He is never on the level with people. He needs to be either above or, if need be, below: either the boss or the slave.’

The most interesting parts of Almost Zero come when the author moves away from social satire to the inner world of his protagonist. Egor is described as a ‘vulgar Hamlet’ who can see through the superficiality of his age, but is unable to have any real feelings for anyone or anything: ‘His self was locked in a nutshell … outside were his shadows, dolls. He saw himself as almost autistic, imitating contact with the outside world, talking to others in false voices to fish out whatever he needed from the Moscow squall: books, sex, money, food, power and other useful things.’ The novel refers to Hamlet over and over again – even though Prospero might have been more apt – while the main protagonists are compared to the Players, ‘prepared to perform pastoral, tragedy or something in between’. The novelist Eduard Limonov describes Surkov himself as having ‘turned Russia into a wonderful postmodernist theatre, where he experiments with old and new political models’. There’s something in this. In contemporary Russia, unlike the old USSR or present-day North Korea, the stage is constantly changing: the country is a dictatorship in the morning, a democracy at lunch, an oligarchy by suppertime, while, backstage, oil companies are expropriated, journalists killed, billions siphoned away. Surkov is at the centre of the show, sponsoring nationalist skinheads one moment, backing human rights groups the next. It’s a strategy of power based on keeping any opposition there may be constantly confused, a ceaseless shape-shifting that is unstoppable because it’s indefinable.

This fusion of despotism and postmodernism, in which no truth is certain, is reflected in the craze among the Russian elite for neuro-linguistic programming and Eriksonian hypnosis: types of subliminal manipulation based largely on confusing your opponent, first developed in the US in the 1960s. There are countless NLP and Eriksonian training centres in Moscow, with every wannabe power-wielder shelling out thousands of dollars to learn how to be the next master manipulator. Newly translated postmodernist texts give philosophical weight to the Surkovian power model. François Lyotard, the French theoretician of postmodernism, began to be translated in Russia only towards the end of the 1990s, at exactly the time Surkov joined the government. The author of Almost Zero loves to invoke such Lyotardian concepts as the breakdown of grand cultural narratives and the fragmentation of truth: ideas that still sound quite fresh in Russia. One blogger has noted that ‘the number of references to Derrida in political discourse is growing beyond all reasonable bounds. At a recent conference the Duma deputy Ivanov quoted Derrida three times and Lacan twice.’ In an echo of socialism’s fate in the early 20th century, Russia has adopted a fashionable, supposedly liberational Western intellectual movement and transformed it into an instrument of oppression.

In Soviet times a functionary would at least nominally pretend to believe in Communism; now the head of one of Russia’s main TV channels, Vladimir Kulistikov, who used to be employed by Radio Free Europe, proudly announces that he ‘can work with any power I’m told to work with’. As long as you have shown loyalty when it counts, you are free to do anything you like after hours. Thus Moscow’s top gallery-owner advises the Kremlin on propaganda at the same time as exhibiting anti-Kremlin work in his gallery; the most fashionable film director makes a blockbuster satirising the Putin regime while joining Putin’s party; Surkov writes a novel about the corruption of the system and rock lyrics denouncing Putin’s regime – lyrics that would have had him arrested in previous times.

In Soviet Russia you would have been forced to give up any notion of artistic freedom if you wanted a slice of the pie. In today’s Russia, if you’re talented and clever, you can have both. This makes for a unique fusion of primitive feudal poses and arch, postmodern irony. A property ad displayed all over central Moscow earlier this year captured the mood perfectly. Got up in the style of a Nazi poster, it showed two Germanic-looking youths against a glorious alpine mountain over the slogan ‘Life Is Getting Better’. It would be wrong to say the ad is humorous, but it’s not quite serious either. It’s sort of both. It’s saying this is the society we live in (a dictatorship), but we’re just playing at it (we can make jokes about it), but playing in a serious way (we’re making money playing it and won’t let anyone subvert its rules). A few months ago there was a huge ‘Putin party’ at Moscow’s most glamorous club. Strippers writhed around poles chanting: ‘I want you, prime minister.’ It’s the same logic. The sucking-up to the master is completely genuine, but as we’re all liberated 21st-century people who enjoy Coen brothers films, we’ll do our sucking up with an ironic grin while acknowledging that if we were ever to cross you we would quite quickly be dead.

This is the world Surkov has created, a world of masks and poses, colourful but empty, with little at its core but power for power’s sake and the accumulation of vast wealth. The country lives by the former wannabe theatre director’s script. Surkov’s victory appears total. But it isn’t, quite. Almost Zero isn’t the only recent bestseller written by a member of the country’s political and economic elite. In January, his old friend Khodorkovsky, the jailed oil tycoon turned prominent political dissident, published a collection of his essays and interviews. Surkov and Khodorkovsky have a complicated personal history. Khodorkovsky, it’s said, never completely trusted Surkov, so when the young PR manager asked to become a full partner in his oil and banking company Khodorkovsky refused. The two fell out, and many argue that their mutual enmity was a factor in Khodorkovsky’s imprisonment. Now their two books represent the intellectual axis dividing Russia. Khodorkovsky’s essays deal mainly with his thoughts about the country’s political future. He’s become a social democrat during his time in prison, and denounces the rapacious capitalism that allowed him to make his fortune. His ideas aren’t original: what is striking is the book’s tone – calm, dignified, measured. Khodorkovsky neither attacks his jailers nor bends his knee to them, but bending his knee is what he is supposed to do.

As far as the Kremlin is concerned, the ideal scenario, the one most of the other oligarchs have followed, would be for Khodorkovsky to break, beg for mercy, sign a fake confession: the old KGB strategy. He refuses to do any of this, which has made him a rallying figure for liberals. Nobody thinks he was purer in heart than any of the other billionaires of the 1990s, but his behaviour now, in the context of Surkovian conformism, is impressive. The recent trial that sentenced him to a further six years in prison saw him accused of somehow stealing his own company’s oil. On top of that, the judge announced in his closing statement that two former ministers who had given evidence supporting Khodorkovsky had actually given evidence against him. Black was turned to white, white to black. The very absurdity was the point: the Kremlin was saying it had complete control over reality and that whatever it said, however ridiculous, was the truth.

Since the Khodorkovsky trial there have been a few unexpected whelps of protest from formerly loyal subjects. First a glamorous ballerina, not known for her political bravery, resigned from the party Surkov created when her signature was included on a public document denouncing Khodorkovsky. Then the press officer at the court where Khodorkovsky was sentenced tearfully admitted that the judge had been forced to read a closing statement prepared by the Kremlin. Most recently, Mikhail Prokhorov, most famous of the as yet unjailed oligarchs, denounced Surkov as a ‘puppetmaster’, since when Prokhorov has been stripped of his membership of the President’s Commission for Modernisation. The photograph of Khodorkovsky staring out from behind prison bars on the cover of his Collected Essays has changed its meaning. When he was arrested in 2003 it was this image that announced Putin’s pre-eminence, taming the powerful oligarchs overnight. ‘You’re only a photograph away from the cover of Forbes to a jail cell,’ the picture said, and it would have been Surkov’s business to make sure the image was distributed as widely as possible. Eight years later, Khodorkovsky is still behind bars, but the image now says something more like: ‘While I am behind bars, then all of Russia is a prison.’

In a neat instance of calling black white, the Surkov-controlled media refer to liberal supporters of Khodorkovsky as the ‘demoshiza’ (short for ‘democratic schizophrenics’), when it is the Surkovian ideology that is, in the vulgar sense, schizophrenic: it’s Khodorkovsky’s supporters who demand consistency. The ‘demoshiza’ tag also serves a useful purpose in conflating ‘democracy’ with ‘mental illness’. The word ‘democratic’ has an unhappy status in Russia: it is mainly used as an uncomplimentary synonym for ‘cheap’ and ‘low-grade’: McDonald’s has ‘democratic’ prices, the door policy at a particularly scuzzy club can be described as ‘democratic’ – i.e. they let anybody in. A few restaurants are proud of their ‘democratic’ tags: run by the children of former Soviet dissidents, they are places where the town’s liberal artists, filmmakers, journalists and other ‘demoshiza’ smoke, drink, eat and prance all night.

I found myself in one of them late one night, having finally, after a month of phone calls, begging, blackmailing and pleading, managed to get a ticket to see the theatre version of Almost Zero, the most exclusive play this deeply theatrical city has ever seen. Official tickets started at $500. Black market tickets were going for four figures. The final price? Two bottles of champagne and the opportunity for one of the theatre’s leading actresses to use my parents’ London home rent-free. It turned out that the fee wasn’t even worth a proper seat. The ushers let me in after the lights were dimmed. They gave me a cushion and told me to sit on the floor by the front row. My head spent the night knocking against the perfumed thigh of an impossibly perfect model, her brutal-looking husband seeming none too pleased. The audience was full of these types: the hard, clever men who rule the country and their stunning female satellites. You don’t usually find them at the theatre but they were there because it was the thing to do: if they ever bumped into Surkov they could tell him how much they liked his fascinating piece. The other half of the audience were the city’s artistic leaders: impresarios, directors, actors. They had a similar reason to be present: Surkov is famous for giving grants to theatres and festivals. It wouldn’t do not to have seen the play.

‘I would never go to something like that,’ a well-known journalist told me in the ‘democratic’ bar. ‘I wouldn’t want to touch anything Surkov is part of. And what about that shit Serebrennikov? Who’d have thought he’d sink to something so low? Sucking up to the Kremlin that way.’ Serebrennikov is the play’s director. He is famous for staging scandalous, subversive pieces and for always wearing sunglasses. Many think him a genius. His collaboration with Surkov is the equivalent of Brecht putting on a play by Goebbels. There are those in Moscow who will never forgive such a partnership. But Serebrennikov has found a crafty way through this most delicate situation. His staging of Almost Zero has transformed the novel. His Egor is a Faustian hero who has sold his soul to the devil but now wants it back. His shiny, empty life, with its parties, easy sex and casual humiliations, is a living hell. This Egor is emotional and wracked with self-loathing, quite the opposite of the cold hero of the novel. In passages that were added in, Serebrennikov’s actors talk straight at the audience, accusing it of being at ease in a world of nepotism, corruption and violence. The bohemians in the audience laughed uncomfortably. The hard men and their satellites stared ahead unblinking, as if these provocations had nothing to do with them. Many left at the interval. Thus the great director pulled off a feat entirely worthy of the Age of Surkov: he pleased his political masters – Surkov sponsors an arts festival that Serebrennikov runs – while preserving his liberal integrity. One foot in Surkov’s camp, the other in Khodorkovsky’s. A fine performance.

‘Life in Russia,’ the journalist told me in the democratic bar, ‘has got better but leaves a shitty aftertaste.’ We had a drink. ‘Have you noticed that Surkov never seems to get older? His face has no wrinkles.’ We had more drinks. We talked about Surkov’s obsession with Hamlet. My companion recalled an interpretation of the play suggested by a literature professor turned rock producer (a very Moscow trajectory).

‘Who’s the central figure in Hamlet?’ she asked. ‘Who’s the demiurge manipulating the whole situation?’

I said I didn’t know.

‘It’s Fortinbras, the crown prince of Norway, who takes over Denmark at the end. Horatio and the visiting players are in his employ: their mission is to tip Hamlet over the edge and foment conflict in Elsinore. Look at the play again. Hamlet’s father killed Fortinbras’s father, he has every motive for revenge. We know Hamlet’s father was a bad king, we’re told both Horatio and the players have been away for years: essentially they left to get away from Hamlet the father. Could they have been with Fortinbras in Norway? At the end of the play Horatio talks to Fortinbras like a spy delivering his end-of-mission report. Knowing young Hamlet’s unstable nature they hired the players to provoke him into a series of actions that will bring down Elsinore’s rulers. This is why everyone can see the ghost at the start. Then when only Hamlet sees him later he is hallucinating. To Muscovites it’s obvious. We’re so much closer to Shakespeare’s world here.’ On the map of civilisation, Moscow – with its cloak and dagger politics (designer cloak, diamond-studded dagger), its poisoned spies, baron-bureaucrats and exiled oligarchs who plan revolutions from abroad, its Cecil-Surkovs whispering into the ears of power, its Raleigh-Khodorkovskys imprisoned in the Tower – is somewhere near Elsinore.