Why is Putin so confident these days?

Why is Russian President Vladimir Putin so confident these days? So confident, in fact, that he seems to have an advantage over the American president, Joe Biden? And what makes Putin — who is both autocrat and oligarch — a different kind of adversary than, say, China’s Xi Jinping? What makes Putin a more unpredictable opponent?

I was one of the early Westerners to work with Putin in the 1990s and have been studying oligarchs like him for more than a quarter century. We see autocrats everywhere these days, but oligarchs matter more. Oligarchs master money — and power. Autocrats only master power. That difference gives oligarchs like Putin a big leg up in the uncertain world in which we live.

Oligarchs utilize their business wealth to gain power or vice versa. They are grouped into types based on their origin story (business or politics) and power type (formal or informal). Aristotle thought of oligarchs as those wealthy few who, in some societies, govern us. Putin defined them as those who receive excess profits due to their government connections.

But oligarchs can also be defined by who they are not. They are not just powerful, as Xi is. They are not just very wealthy, as America’s Elon Musk or Jeff Bezos are.

Oligarchs are not necessarily autocrats, authoritarians, strongmen, dictators or tyrants, although some of them are. Aside from Putin, former President Donald Trump and Italy’s Silvio Berlusconi are good examples of autocratic oligarchs in my view. But it’s also quite possible to be a non-autocratic, “good” oligarch, such as America’s first President George Washington and Cosimo de’ Medici in Renaissance Florence were.

Oligarchs are also not the same thing as moguls or tycoons. John Rockefeller in America and Sakichi Toyoda in Japan weren’t oligarchs.

And oligarchs are not kleptocrats. They don’t steal to gain their wealth. Former President of Afghanistan Hamid Karzai isn’t an oligarch.

No, what makes oligarchs distinctive is their mastery of two domains — business wealth and power — and their ability to transform one into the other.

Today, by my count, 14 oligarchs serve as heads of state or government. That’s a good way to start to measure their impact. This number has been growing steadily from the 1960s, when an average of 1.8 oligarchs occupied these positions in any given year.

Some rule over substantial economies, like South Africa’s Cyril Ramaphosa. Others, like Sebastian Piñera from Chile, return to office more than once. A few succeed in working across multiple political systems, as Hong Kong’s Tung Chee-Hwa has done. Some are long-established, like Azerbaijan’s Ilyan Aliyev. Others are new to the scene, such as Guillermo Lasso from Ecuador. A few, like Lebanon’s Rafic Hariri and Thailand’s Thaksin Shinawatra, were able to establish family dynasties. Or become the beneficiary of family connections, as Isabel dos Santos from Angola did. Some remain relatively unknown outside their home countries, like Luis Abinadar from the Dominican Republic. Others, like the United Arab Emirate’s Mohammad bin Rashid al Makhtoum, are probably too well known for their own taste.

Some of these examples are business oligarchs. They started in business, then moved to power — Shinawatra, Lasso, and Hariri. Others are political oligarchs. They started in politics, then moved to business — Al-Makhtoum, Ramaphosa, and Aliyev.

Most of these are examples of formal oligarchs. They held high office. Harder to measure, although increasingly well-documented, are informal oligarchs. The informality comes from the power they exercise. Sometimes this can be measured. For example, financial contributions are tracked in some countries, at least sometimes. Charles Koch in America, Luis Carlos Sarmiento in Colombia and Mohammed bin Laden in Saudi Arabia are examples of informal oligarchs whose financial contributions have had a significant, documented political influence.

Sometimes, though, informal oligarchs exercise power through more subtle influence. Mikhail Fridman in Russia used this influence and that of his partners to shape legal and regulatory enforcement in ways that benefitted his business empire. All without being captured by the government or angering it. And often without most of us knowing.

Because, you see, flying under the radar is one of oligarchs’ five strategies. They try to stay out of the public eye if possible. A second is having “friends with benefits,” professional partners with whom they repeatedly couple and uncouple.

And, most importantly, oligarchs think like entrepreneurs. They are opportunistic. Like entrepreneurs, oligarchs work in a world of extreme uncertainty. And, like entrepreneurs, they have strategies for exploiting that uncertainty. Three additional strategies in particular.

They begin by assessing the means at their disposal. Who they are. What they know. Whom they know.

Next, they determine what they can afford to lose. Money, time, opportunities lost. And they keep these losses as low as possible.

Finally, oligarchs lean into surprise. They welcome the unforeseen opportunities that surprise brings.

The oligarch’s playbook has served them well. And, as uncertainty continues to increase, oligarchs are well-positioned to gain both wealth and power.

Don’t let autocrats blind you to how intertwined wealth and power remain. Oligarchs matter — a lot. In an uncertain world, they pack more of a punch than autocrats do. To paraphrase James Carville, it’s the oligarchs, stupid!

David Lingelbach is an associate professor of entrepreneurship at The University of Baltimore. He has co-authored “Entrepreneurship in Africa: Context and Perspectives” and edited the forthcoming “De Gruyter Handbook of Entrepreneurial Finance.” Formerly president of Bank of America in Russia, he has been awarded Fulbrights to Myanmar and Colombia and nominated twice for an Andrew Carnegie Fellowship.