In the end, the sclerotic Soviet economy wasn't able to satisfy citizens' demands. Mikhail Gorbachev had hoped to transform the Soviet Union into a modern socialist state "with a human face." Instead, he hastened its collapse, in large part by violating the post-war social contract amidst the chaos of glasnost and perestroika.

Boris Yeltsin, Russia's first democratically elected post-Soviet leader, further eroded the underpinnings of the social contract tied to Soviet nationalism. Primarily concerned with his own quest to assert control, he swung wildly between pro-democracy demagoguery and authoritarian belligerence. His victory over parliament in 1993 established a presidency of far-reaching power but little popular support. Yeltsin tried to capitalize on the development of a new Russian imperialism, but the first disastrous war in Chechnya and humiliating peace treaty of 1996 showed it wouldn't work.

The corrupt and hastily executed privatization of Soviet infrastructure that Yeltsin oversaw ironically provided the state with one way to rebuild. Crony capitalism created a new class of billionaire "oligarchs" and young "new Russians," all deeply indebted to the Russian state. But on the other side of the economic and cultural gap, the older generation limped on, humiliated and impoverished. As the country experienced its freest years in history -- varying political opinions became as easy to find as cheap imported goods, pornography and booze -- many Russians were horrified by the sense of chaos, moral decline, and international humiliation. That horror paved the way for authoritarianism to return.

Enter Yeltsin's hand-picked successor, Vladimir Putin. Much is made of the fact that he was a KGB officer, but he absorbed far more Soviet nationalism than communism. "I was a pure and utterly successful product of Soviet patriotic education," he told an interviewer in early 2000. Putin's nationalism is not the cartoonish chauvinism of European or Russian nativists; it is Soviet at heart, focused on the state's role as the main vehicle of modernism and guarantor of stability.

During his brief stint as prime minister in the fall of 1999, Putin renewed the war in Chechnya, calling it necessary to preserve Russia's sovereignty and protect its citizens against terrorists. After he became president less than a year later, his statist nationalism and emphasis on law and order undermined the legitimacy of those anyone who spoke out against his increasingly authoritarian practices, especially journalists and democracy activists.

Putin found the way to a new social contract in the country's oil fields, which helped satisfy rising global energy demand. On the one hand, the country's oligarchs were put on notice: they could play ball with the new boss and continue to reap extraordinary profits, or they would be destroyed. Not surprisingly, the energy sector has produced the clearest winners and losers in Russia's pay-to-play business world. Sibneft owner and Putin pal Roman Abramovich has thrived, while Yukos owner Mikhail Khodorkovsky -- once the richest Russian -- was singled out over tax evasion charges. Energy revenue has also allowed Putin to revive some Soviet-style paternalism by encouraging greater domestic production of consumer goods and providing larger subsidies for those Russians left behind by the boom.