I’ve been travelling in the heartlands of Russia for 30 years, witnessing everything from the euphoric wishfulness at the fall of communism to prosperity and, more recently, political despair. Yet going there for the first time since the annexation of Crimea, I was still shocked by what I saw.

I encountered a country braced not for some frozen conflict, nor for proxy war, but for the real thing: all-out war against the west. Never have my friends been more loving – but this time it was the concern of people who were unsure when and how we would meet again.

It is true that this state of mind has been brought about by the Kremlin’s unremitting media campaign of the past year. But I quickly came to understand that most of them share their government’s dim view of the west, with its “hollow concepts” of democracy and freedom.

Since the regime is fixated on the idea of getting its empire back, a major conflict really does seem possible. Russian aircraft and submarines are playing war games around the coasts of Europe. But a plane crossing into Baltic air space could trigger Nato retaliation with conventional arms, which could in turn could spark a pre-emptive nuclear strike by Russia – a strategic response born of a fear of weakness in the face of superior American military power.

While Nato struggles to persuade its members to spend 2% of GDP on defence, this year Russia is more than doubling its defence spending, to 4.2% of GDP, while slashing all other budgets, including health and social services. Saturday’s VE Day parade in Moscow was more than a celebration of victory: it was a display of military might.

Meanwhile, Russia’s economic crisis will deepen this year. Salaries of government officials have been frozen. Private sector pay is down almost 10%. Massive job cuts are forecast. Putin announced that he would take a salary cut of 10% this year; but since estimates of his true, shadowy wealth range between $70bn and $200bn, it is unlikely he’ll feel the pinch. Despite the crisis, support for him has transmuted into something close to idolatry.

This year Russia is more than doubling is defence spending, while slashing all other budgets

How have we drifted into this absurd and dangerous situation? At the end of the cold war the Russians imagined that they would be becoming part of an expanded Europe. Instead, through a combination of triumphalism and ignorance we have played to Russia’s ancient fears of exclusion and victimhood.

The conventional view in the west is that the blame lies with Putin and his kleptocratic regime. According to this narrative, the regime went into attack mode after the oil price collapsed. It distracted attention from its own failure to diversify the economy by lashing out against an external enemy, and launching a brilliant propaganda campaign.

This version of events, while not untrue, lets the west off the hook far too easily. When the Soviet regime ended, free-market thinking was in the ascendancy in the west. People in positions of authority really did swallow the idea that we were living through “the end of history”: that in a unipolar world foreign policy was going to be exclusively about a battle for markets.

In America and Britain, government support for research on old Soviet bloc countries was slashed. The State Department and Foreign Office disbanded research units that kept politicians informed. Embassies focused on opening up commercial opportunities. Meanwhile, the press, facing its own economic crisis, also cut back on foreign correspondents. The west simply stopped thinking seriously, and in depth, about Russia and its neighbours.

And yet when it came to defence we did not behave as though we were facing the end of history. Rather than disbanding our cold war defence arrangement, Nato, we reinvented it as an alliance that could be construed only as being arrayed against Russia. We kept expanding it ever eastward, closer to Russia’s borders. In response, Russia turned aggressive – first in Georgia, then in Crimea and Ukraine – at this intrusion into its sphere of influence.

The west dismissed this, saying the concept of spheres of influence belonged to a bygone age. But geography is unchanging, as are the sensibilities created by it. US policy on Cuba in the post-Soviet era has, until now, been founded on precisely this principle. Cuba had long-since ceased to pose a military threat to the US. But it was deemed outrageous that any nation so close to US borders should cleave to a “hostile” ideological allegiance.

The end of the cold war has not changed history either. History continues to inform identity, as it always has. Take Ukraine: Kiev really is the birthplace of the Russian nation. This matters, just as it still matters that America’s founding fathers came from Britain.

Russia’s sense of its identity, poised on the edge of Europe in a borderless landmass, has always been pathologically insecure. Identities are tangled, allegiances split. Take Donbas, for example, at the heart of the conflict area. This is the homeland of the Don Cossacks, whose cavalry regiments famously served Russia’s tsars for generations. During the Soviet period, the Cossacks were greatly persecuted for their Tsarist allegiances. But the region was also the birthplace of that icon of Soviet labour, Alexei Stakhanov, who mined 227 tonnes of coal in a single shift. Stakhanov was the poster boy for a heroic generation of Soviet labour, all based in Donbas. In this region of conflicted allegiances, it is hardly surprising that the Kremlin has been fighting its propaganda war with particular intensity here.

The decision by western leaders to boycott Russia’s 70th anniversary victory parade on Saturday might have seemed like common sense in the light of events on Ukraine’s border. But it failed to recognise how emotive a concept fascism still is for Russians. Westerners have for years been giggling at ’Allo ’Allo and John Cleese’s goosestep, but fascism is no laughing matter in this country. Russians ask me how in Lithuania marches can be permitted that honour Nazi collaborators who murdered 200,000 Jews. How, they ask, can the west welcome into the EU and Nato “ethnocracies” such as Estonia and Latvia that radically discriminate against their Russian subjects.

There is another Russia beyond Putin | Timothy Garton Ash Read more

The 62% popular support which Vladimir Putin enjoys according to the Levada Centre reflects not only that ancient geographical sense of insecurity Russians feel; not just the unshakeable love Russians feel for their country. It represents wounded pride at the west’s apparent determination to treat Russia as the enemy. Continued western sanctions will only fuel his popularity. Because Putin is a merely a symptom of the present crisis. There is more to Russia than Putin, a great deal more.

At Saturday’s parade in Moscow the defence minister, Sergei Shoigu, made the sign of the cross as he passed under the Kremlin’s Saviour Gate. This unexpected gesture set the Russian blogosphere alight. The fact that Shoigu himself is Buddhist was beside the point. Standing there at the head of his troops, the minister of war was reviving an old tradition, doing what Russian generals used to do before going into battle. He was also, as Russian bloggers pointed out, making a gesture that drew a distinct line between their culture and a west that has “banned God from the public sphere”.

We must start taking Russia seriously again, once more including it in our culture rather than freezing it out yet again. Karl Marx warned us that history repeats itself, the first time as tragedy, the second time as farce. But there’s nothing funny about this current predicament. We should remember the lesson of the first world war, and pay attention before it is too late.