Wheel of Fortune: The Battle for Oil and Power in Russia.

• Author: Dahl, Carol

Wheel of Fortune: The Battle for Oil and Power in Russia by THANE GUSTAFSON. (Belknap Press of Harvard University Press, 2012) 662 pages, ISBN 978-0-674-06647-2, Amazon Price Hardcover $30.79, Kindle Edition $26.49.

When contemplating the transition of the Russian oil industry from communism to capitalism, I can't help think about Churchill's comment in a wartime speech about Russia being a "a riddle wrapped in a mystery inside an enigma." Dr. Gustafson's lifetime study of the Soviet/Russian economy, personal acquaintance with many of the main actors, and well researched account of this transition for the oil and gas industry has made these changes less enigmatic for me.

This book takes up the oil and gas story, where Gustafson (1989) leaves off. In this earlier book, Soviet energy policy is chronicled from the 1970's through the late 1980s from a bit broader lens with some discussion of coal and nuclear power. It discussed the oil crisis in the late 1970s, Breshnev's resource intensive response to stem the stagnation, and gas abundance providing some respite. Gustafson suggests that problems in the oil market as well as in the wider economy that contributed to the demise of the USSR can be attributed to both systemic causes as well as mistakes in leadership.

This newer volume continues this theme and focuses more exclusively on oil and gas and chronicles their changes with the collapse of the USSR and the resurrection of Russia. Given the role of the government in markets, the political changes are always a backdrop both before and after the collapse of the USSR. Although the book's point of view is more from that of a political scientist there is an acknowledgement of economic ideas as well. As an economist I also appreciated the insights on how the political changes impacted the economic operation of the oil and gas industry.

The introduction lays out many of the themes that reoccur throughout the book. Why oil and gas matter to Russia, why their roles and evolution differed, how they form a core within the economy, and their role in Russia's reintegration into the international economy. Gustafson reminds us that Russia is not really a petrostate but rather an advanced but inefficient industrial and technological power with a well developed political system staffed by well-educated professionals. Oil is not a curse but it has shorn up an economy in turmoil with the economic disruption, abrupt reentry into the world economy while still...